I have an easy question for you...
Would you be more likely to buy a product if it had dozens of positive reviews from total strangers or a handful of positive reviews from close friends and acquaintances?
Most people will agree, a recommendation from a close friend holds greater weight than one from a total stranger. However, both recommendations are a great starting point for referral marketing.
Referral marketing harnesses the power of the bias consumers show towards products and services that have been personally vetted.
This article will look at how you can use basic referral marketing and programs in your coworking space.
Identify your most loyal members
An effective referral program starts with the right people.
You’re more likely to see results when you ask the right people for referrals.
So who are the right people?
Your most loyal members, of course.
Your most loyal members are the people who will be most eager and willing to vouch for your business.
Make it simple
In our hectic world, people are drawn to simplicity.
For example, you're more likely to sign up for a service or newsletter if it only takes one action like entering your email and clicking ‘enter’ once.
If you require multiple steps from people, you are more likely to lose them throughout the process.
That’s why a good referral program must be straightforward and as simple as possible. This means the target of the referral program should be presented with the minimum steps possible to follow through with the program.
One common and highly effective method to incentivize members to refer your space is to offer a reward.
The reward can be big or small. It can range from a month of free membership to offering additional services for free, such as hours of conference room time.
Make it mutually rewarding
To add another layer of incentive you can make the referral program mutually rewarding.
Think of Uber's early reward program.
Uber cleverly asked their early users to refer a friend and incentivized them with ride credits. For example, refer a friend. If they accept, you get $20 in ride credits. This is the formula for a basic referral program. But it didn’t stop there.
Uber cleverly anticipated that - despite the personal reference - potential users may be reluctant to test this unheard of “ride-sharing” service.
To counteract that uncertainty, Uber had to make it as low-risk as possible for potential users. And they did that by offering potential users ride credits as well when they've accepted a referral.
Akin to offering a free trial or a money-back guarantee, people are more likely to try something if they have little to lose in terms of money or time. This tendency is especially pronounced when people are trying novel products and services.
And it worked considering that Uber has since expanded into 50 countries and is now a household name.
A similar reward program can be developed in a coworking space. Incentivizing current users with rewards for referring friends, but also luring in potential new members with freebies if and when they accept the referral.
Promote your referral program
Once you’ve decided who you will be targeting and what exactly your referral program will offer as a reward, you can start spreading the word.
This can be accomplished via two important channels.
First, you can email the selected members directly. This is probably the most efficient and direct method.
The main advantage of an email campaign is the success rate can be precisely measured.
For example, by tracking open rate, click-through rate, click to open rate, and other common email marketing metrics. This quantitative feedback gives you valuable insights into how attractive your offering is.
Another option would be to post the referral program on the community news feed of your digital coworking management platform, like Spacial. Members who log onto the platform daily will be able to see the post on the community news feed.
Moreover, posting on the community news feed will also allow you to gather a type of qualitative feedback, as your members can ‘like’ or reply with comments about the original post.
Ask for feedback
Measuring the success of your referral programs is just as important as the program itself.
As mentioned above, if you promote your referral program by email you can track certain metrics to determine the objective success of the campaign.
Likewise, if you post on the digital community feed you can gather qualitative feedback.
One last way to gather feedback is the old fashioned way: Just asking for it. You can do this casually and face-to-face. You’d be surprised how much valuable feedback you can gather simply by asking people how they feel.
Thank your members
A good old fashioned “thank you” never goes out of style.
When members follow through on the reward program it’s important to thank them for helping you out.
Your goal is to simply make them feel appreciated and valued. That feeling can go a long way towards strengthening member relationships.