Today’s dealers consistently rank customer retention as their top priority, yet they still spend the majority of their marketing budget acquiring new customers. Customers want ease and efficiency during the buying and servicing processes now more than ever. With the access they have to endless amou nts of information, they are always looking for the best deal. Customers expect quick and receptive communication, competitive pricing and stellar customer service at a minimum. Loyalty programs boost overall revenue by 5 to 10 percent, with members of these programs spending between 5 to 20 percent more than non-members. The case for reward programs is clear-cut, and it’s important to choose the right loyalty program for your dealership and your customers.

Loyalty Members vs. Non-Members

1. Review your Budget and Goals

Dealerships today spend most of their marketing budget on acquiring new customers (conquest business) despite the fact that attracting a new customer can cost 6-7 times more than keeping an existing one (Kissmetrics)*. Taking action by identifying marketing costs that are unused and effectively produce less than stellar results or are duplicate services is a good place to start. Furthermore, if you have multiple suppliers that offer the same services, you may be missing out on valuable discounts. After you reevaluate your supplier and partnership list, you can make decisions based on ROI.

2. Create an Actionable Plan

Create a team of knowledgeable and engaged employees who will lead the program and take on specific “action items” to ensure your program’s success through daily implementation. Discussing and developing the efforts below will help you cover some common loyalty program pitfalls.

1. Understand your ideal customer, their needs, behaviors and what will motivate their interaction and spend.

2. Define the loyalty reward structure and how the reward will be delivered.

3. Create a communication calendar that highlights the path for each type of customer and what type of communication they prefer: email, text, phone.

4. Generate the loyalty program marketing content and images.

5. Detail the loyalty program marketing promotion channel calendar that will detail how often will you promote the program, and through which channels.

6. Create an internal workflow to show which employee is responsible for each task and the timeframe in which it must happen and the “how.”

7. Finally, begin your loyalty program by aiming (and tracking) for modest, yet scalable increases in customer retention, frequency and lift.

3. Select Motivating Loyalty Rewards

According to a DME Automotive study, 79% of customers expressed interest in joining an automotive loyalty program! Awesome! Customers want loyalty programs… just not meaningless loyalty programs.

It’s not enough to create an obscure point-based program that hardly makes sense to your team, let alone your customers. Your loyalty program should be easy to understand and provide immediate gratification.

Service customers often believe that the “mom and pop” shop is cheaper and offers a more affordable service option. When you think about the thousands of dollars you forfeit each day you will see that allocating a small amount of funds back to the customer could translate into a top-generating revenue center for your dealership. Creating a program with rewards that truly motivate customers to return and gives them something to associate positively with the dealership is a worthy investment.

Once you find a motivating reward, be sure that you can accurately and easily DELIVER what you are promising and promoting. There is nothing worse than falling short of a valuable customer’s expectations. Have a clear fulfillment and delivery method for your loyalty rewards. You’ll save yourself, your team AND your customers a lot of headaches.

4. Develop Relative Touch Points

Creating a cohesive end-to-end customer communication plan to ally with your loyalty program is crucial. Each customer has different needs and the communication they receive should be based on those needs and sent at the right time. Your customers are busy. Offer peace of mind through relevant and engaging service reminders. You will be placing your dealership front and center. Then, go a step further and use your vast customer data to send birthday rewards, seasonal check-up offers or create a smartphone application where your customer can create a profile to track their service rewards, updates and schedule future visits.

Developing a customer loyalty program for your service department that drives real customer retention and turns your average customer into a brand advocate is no easy task and there is certainly no trick to it. However, it can be simplified if you leave it to the professionals. Utilizing the Incentivefox platform allows you to remain in control of your business and put the focus back on your customer while breathing new life into additional revenue streams. The Incentivefox Service Rewards Platform includes scheduled, targeted promotional campaigns, an experienced client success manager, integrations with your existing dealership systems, marketing automation, reward fulfillment, program tracking, quality customer communication and engagement, custom messaging and much more. Click here to learn more.

According to Dale Carnegie only 11% of salespeople ask for referrals. We all know how valuable referrals are but when it comes time to ask for a referral or dig back into the CRM for old customers, we sweat. Let’s explore the 4 reasons why 89% of salespeople fail to ask for referrals and how to change them.

1. Lack of Commitment

   1. ISSUE - Referrals are a passive process vs. a proactive process. We are delighted when we get them, but we do not invest too much energy into them as salespeople since they rarely pan out and we seldom see them as a real business practice.

   2. FIX - Make a weekly, monthly and quarterly goal for referrals with actionable steps to take each week. These steps can be as simple as reaching out to 3 previous customers each week or to a local charity or organization to show them how committed you are to community development and referrals.

2. Fear of Rejection

   1. ISSUE - No one wants to be turned down and asking for a referral runs the risk of rejection. Salespeople often feel they’re overstepping the relationship by asking for a referral but going in with that mentality only adds to the issue.

   2. FIX - According to Dale Carnegie, 91% of customers are willing to refer, yet only 23% do. This gap exists due to the failure to simply ask and follow up with your customers. When we begin to accept and understand that customers are happy to refer our services if they’ve had a positive experience, it allows salespeople to let go of the fear that they are “bothering” them.

3. Thinking Great Service is Enough

   1. ISSUE - Most salespeople are under the illusion that “If I offer my best service and go above and beyond, I’ll get referrals.” Which would be lovely but we live in a world where our customers are busier than ever with their own lives, so our service oftentimes isn't enough.

   2. FIX -  Consistent communication and customer “upkeep” will have you in the forefront of your customer’s mind the next time their neighbor asks them “How do you like that new car?  I’m thinking about getting a new one…but I’m not sure where.” Furthermore, knowing and understanding your customer’s preferred contact methods will help you stay off their don not call list. Would they prefer a text, email or phone call? Maybe a big chunk of your audience follows your Facebook page? Make a commitment to email or post at least 2 times a month and tag a few friends or loyal customers in each post.

4. There is No Systematic Approach

   1. ISSUE - Asking for a referral can often feel like a shot in the dark. We’ve all been in a place where someone referred a friend and never received their reward. Unfortunately, this leads to a very angry customer, often more upset than if their product was damaged. That alone can make the process seem daunting, overwhelming and not worth it.

   2. FIX - When there’s an expected procedure in place that streamlines the process, this ensures both the referred customer and referrer are managed properly, it allows the salesperson to feel confident in their ability to ask for referrals and fulfills the promotion promises. Additionally, you never lose focus on giving their referral a best in class experience. According to Wharton School of Business, only 30% of companies have a formalized referral program, despite the fact that referral business experienced 86% more revenue growth over a two-year period. A homegrown referral program can be enough, but it’s a big commitment for a dealership's marketing and IT team to manage without help. Incentivefox’s Referral Rewards Solution allows dealerships to bring their often out-of-date referral programs into the digital era and formalize a process that is easy-to-use!

Are you ready to improve your sales strategy and turn 2018 into a referral generating machine, check out our blog and follow me on twitter for best practices, hints, and tips on driving more referrals and customer loyalty in 2018!

RELATED: Help: Confused/Weak Referrals

CHICAGO, Aug. 22, 2017 (GLOBE NEWSWIRE) -- Incentivefox, which offers a revolutionary offer-and-reward platform where dealerships can easily collect referrals, re-engage with their customer base and improve employee retention, has announced the full U.S. release of their Dealership Automated Referral Rewards Solution. Dealerships today are missing out on as much as 80% of new business that loyal customer referrals can generate due to:

1. Lack of sales team initiative to ask for referrals.
2. No time to create an actionable plan to approach and promote to their customer base.
3. No way to easily collect and track referrals from customers in today’s digital age.
4. Lack of an incentivizing offer to motivate customers to refer their friends and family.

According to Nielsen, referred customers are 4x more likely to purchase than any other leads but with the ever-growing focus on SEO, PPC, social media and other digital marketing efforts, referrals have been put on the back burner. The out-dated methods for promoting and capturing referrals in most dealerships have hindered referral optimization…until now.  Incentivefox’s Automated Referral Rewards Program is the solution to driving more quality leads to every dealer’s showroom.

As a leading provider of incentive-driven solutions, the Incentivefox team collectively brings more than 35 years of automotive and incentive industry experience. Their comprehensive and easy to use referral solution helps dealerships collect more referrals by nurturing their current audiences' word of mouth and then streamlining the entire referral and rewarding process for customers and employees alike. As well as supercharging each dealer's program with complete on-brand customization and quantifiable reporting and analytics through their lead-to-sale matching technology.

“Our focus is to generate quality leads by leveraging their already loyal customer base. Even the most loyal customers need an enticing reminder to refer,” said Rick Partyka, President of Incentivefox. “The big thing that we want dealers to know is that not only is this solution going to save them a lot of time and headaches, it’s going to foster more frequent, engaging and powerful interactions with their customer base, while simultaneously turning their customers into another revenue generating sales channel.”

The Incentivefox platform is backed by a powerful incentive that entices and motivates customers to continually engage. A dealer branded Reward Card that is reloadable and can be used across any and all of the dealer’s incentive offers from test drives to employee rewards and goodwill.

Johnny Martinez1, a Larry H. Miller GM, was able to streamline his referral process and create a community of loyal brand champions. “We had high expectations at Larry H. Miller and Incentivefox has helped us achieve all of them. Based on our experience with the team and product, I would recommend Incentivefox to all dealerships who are looking for a way to drive more quality showroom traffic and improve their current customer/employee retention and relationships.”

Auto dealers can learn more about Incentivefox by visiting www.incentivefox.com where they can find more success stories and download free eBooks with referral hints and tips.

1 Transferred Larry H. Miller locations and is currently implementing the referral rewards solution at his new store.

About Incentivefox
Incentivefox (www.incentivefox.com), offer/incentive, engagement and solution platform provider. Boosting referrals, retention and revenue by creating and delivering enticing offers and experiences to your customers, partners and employees. Founded in 2014, Incentivefox solutions are used by dealerships, OEMS and small businesses all over the country.

I previously wrote an article with 30 Referral Stats to Blow Your Mind. Now I'm back with 17 more! Why, you may ask?

Because only 30% of companies have a formalized referral program, despite the fact that those that did experienced 86% more revenue growth over a two-year period. With the ever-growing focus on SEO, PPC, social media and other digital marketing efforts, referrals have been put on the back burner. The out-dated methods for promoting and capturing referrals in most dealerships have hindered referral optimization…until now.

“The purpose of a business is to create a customer who creates customers." - Shiv Singh - Visa Senior Vice President Innovation & Strategic Partnerships

Dealerships can start driving more revenue when they take some time to really refocus on their referral marketing strategies. Here are some facts that will get you ready to start re-working on your referral strategy today!

1. Referrals have a 25% higher lifetime value (LTV). - DMA and Forrester
    
2.  Referral marketing channels are helpful for facilitating at least four of Dr. Robert Cialdini’s six “weapons of influence” from his seminal marketing book “Influence: The Psychology of Persuasion,” including reciprocation, social proof, liking, and authority. This makes referral marketing a powerfully influential way to promote your business.
    
3. Referrals have a 20% higher average order value (AOV) each year. - DMA and Forrester
    
4. Referrals between four and five times more likely to refer additional new customers.  - DMA and Forrester
    
5. Customers are on-the-go. 80% of Incentivefox referral leads are submitted through the dealer's mobile app.  - Incentivefox Referral Rewards Program
    
6. 82% of Americans seek recommendations from friends and family when considering a purchase. - Nielsen
    
7. 88% of Americans say they would like some sort of incentive for sharing a product. That number jumps to 95% among 18-to-34-year-olds. - Harris Poll
    
8. Employee referrals rock too - Referral programs can save organizations $3,000 or more per hire.
    
9. The survey goes on to reveal that 77% of Americans identify money as their reward of choice. - Harris Poll
    
10. New hires sourced via referral programs produce 25 percent more profit for their companies than new hires sourced via other means.
     
11. Word of mouth drives $6 trillion of annual consumer spending. - CMO
     
12.  83% of consumers are willing to refer after a positive experience but only 29% do. Why? No clear and simple process for submitting referrals.  - Nielsen
     
13. 84% of B2B decision makers start the buying process with a referral. - Heinz Marketing
     
14. Referrals are 18% less likely to churn - DMA and Forrester
     
15. Referrals have a 15 point–higher average net promoter score (NPS) -  DMA and Forrester
     
16. Of companies surveyed with referral programs, 75% say referrals are their lowest-cost method of acquiring new customers. That number jumps to 82% among those who are using a SaaS-based referral marketing system like Incentivefox. - Web Profits Survey
     
17. Of the same survey, 78% of respondents with an established referral program say that customers acquired through the program are more loyal than other customers - Web Profits Survey

What did you think? Are you surprised by any of these stats? If you're unsure where to start on building your own referral program you can download free eBooks with referral hints, tips, and best practices and to start you off right... and here are the top 4 most important aspects of a successful referral program:

1. Easy-to-understand rules 
2. Appropriate benefits and rewards for both the referrer and the referee
3. Simple sign-up/submit methods
4. Fast reward payout

"In many businesses today, referrals are viewed as an organic byproduct of the company successfully doing its job. If you exceed customer expectations, it’s natural to assume they’ll return the favor by singing your praises to their networks. If you blow them away with world-class customer service, you can expect a flood of social-media goodwill.

But here’s the problem with those assumptions.... while referrals do happen organically, they’re never a given -- even from your most loyal and satisfied customers. A Texas Tech University study found that while 83% of customers say they’re willing to provide referrals after a positive brand experience, only 29% actually do. That chasm exists for many reasons, but it’s often exacerbated by a failure to properly prioritize and manage a referral program." 

Here are 5 Do's and Don'ts of a GREAT referral rewards program!

1. DON'T EXPECT YOUR SALESPEOPLE TO ASK

I know this seems ridiculous but we live in the 80/20 world. Where 20% will do what you ask and maybe more and the rest will get by with doing as little as possible. So, what can you do to combat this?

1. DO - Give your salespeople the tools that make asking less awkward like an enticing incentive that they'll want to tell their customers about. Someone's friend, relative or family member could use the extra cash and benefit from this opportunity. 
2. DO - Give them tools like promotional material or an app that makes sharing information about the program easy and fun. 
3. DO - Create an automated email campaign that asks your customers for referrals directly.

2. DON'T EXPECT YOUR CUSTOMERS TO GIVE YOU REFERRALS

This is always a hard pill to swallow. We do great work, we give great service, shouldn't referrals just be rolling in? unfortunately, no. Our customers are busy people. They've got kids and bills and work to deal with. They aren't always thinking about how great your dealership is. But what can you do to remind them?

1. DO - Entice them to refer with an incentive offer that shows you appreciate their referrals.
2. DO - Give customers the tools to make referring easy and quick for them, such as a submission page. 
3. DO - Follow up with a thank you and reminder for them to keep referring!

3. DON'T "SET IT & FORGET IT"

Referral programs are not a switch that a marketer and company can just turn on and watch the magic happen. Referral programs are similar to a garden, the more we take care of them the more they grow and then they flourish. It must be started from management and lead down to the whole team for a referral program to be a true success.

1. DO - Mention your referral program every week at your sales meeting
2. DO - Remember to tell your office, service and other team members about the program and their chance to earn.
3. DO - Hold your team accountable for driving in referral business.
4. DO - Incorporate referral marketing into all of your sales and marketing aspects. Email signatures, direct mail, TV commercials, and billboards. 
5. DO - Monitor your program, which reward amounts garner the most response? Who are my top referring customers? Who's my top salesperson? You should be able to track all of these valuable analytics within your referral program. 

4. DON'T FORGET TO REWARD!

Seems simple right? But how many times can you recall a customer calling up about a friend they referred 3 months ago and they never got their reward? YIKES! 

1. DO - Put a plan in place to thank your customer for their referral within 10 days of closing a deal.
2. DO - Follow up with customers to ensure they received their reward
3. DO - Track your sales safely to ensure a referral really did take place. You never want to shell out money unwarranted, keeping an organized list of customers and their referrals will help you combat that. 

5. DON'T TREAT REFERRALS LIKE "ANY OLE' CUSTOMER"

Referred customers are 4x more likely to purchase and have a 16x higher lifetime value than a fresh up. Treating a referral like any old web lead can diminish your chances of not only this sale but future revenue!

1. DO - Follow up with a referral lead ASAP
2. DO - Remind them that their friend referred him
3. DO - Inform your management that you've received a referral and follow it from start to finish. 

Do any of these Do's and Don't surprise you? Are you already implementing some of these today? And how many referrals is that helping your store generate?

Myth 1:
Referral Marketing Programs are less cost effective than other marketing channels.

FALSE! 92% of people trust recommendations from friends over any other form of advertising and a referred customer is 4x more likely to purchase. Referral Marketing allows you to generate high quality leads for your store that already look like your ideal customer! With your own referral marketing program you can leverage and optimize on the trust of your already loyal customers, employees, friends and family! And it not only makes for an easier sell and close, according to marketshare, Word of Mouth has been shown to improve marketing effectiveness by up to 54%.

Myth 2:
Happy Customers Will ALWAYS refer your product or services as long as you're doing a good job.

Unfortunately FALSE... a Texas Tech study found that 83% of happy customers said they would be more than happy to refer, yet only 29% actually end up referring! Why? Because they forget. We are all busy people with 3 million things to do in our own lives and a company’s referral program can slip out of mind unless frequently promoted, a motivating offer and easy to use tools! The tools to make referring a breeze are so crucial, if your customer heads to your site to refer a friend but doesn’t understand how, they will abandon ship faster than you can say SHIP!

Myth 3:
Affiliate Programs are the same as referral programs.

False, referral programs are focused on generating new leads through your customers, employees, friends and family while simultaneously growing stronger relationships with them, these people love your services, products and employees and they’re happy to share with their friends because they know their friend will be well taken care of and happy with the end product or service.

Affiliate programs on the other hand have a strong self interest factor and these affiliates are often motivated by the financial gain and are often referring and sharing with people they are not closely related to or have strong ties to.

Myth 4:
Incentivizing for referrals does not work.
TRUTH:
Incentivizing works, how do we know this? Just to look Paypal, Airbnb or uber to see how they explain their tremendous growth rates. This is not an exclusive bonus for e-commerce stores or hip trendy new services and products. Dealerships can digitize and optimize their referral programs in a similar fashion, and while the frequency of shares/referrals for a dealership may not be as high, but considering referred customers have a 51% Service Usage, Fresh-Ups have just 29% service usage. (NADA). And since the lifetime value of a new referral customer is 16% higher than your average customer (Wharton School of Business) the effort to put together a program and incentivize for a referral makes perfect sense. More than 50% of people are likely to give a referral if offered a direct incentive, social recognition or access to an exclusive loyalty program. –  Software Advice

Myth 5: Referral Programs are EXPENSIVE to develop and implement.
This is a technically a half truth…. yes, if you’re trying to create and run your own in-house referral program similar to Airbnb or Uber then you could be looking to hire 2+ engineers and spending about $20,000+ to create it! But that’s why referral platforms exist today.  A referral platform should allow you to market your referral program, track and optimize it. Discover brand advocates and track employees who are utilizing the program to the fullest. 

What do you guys think? Did you already know these truths or did something surprise you?!
 

Monday’s are tough but here’s a few motivational quotes to get you going this Monday!

1. “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.” – Dale Carnegie
    
2. "Imagination is everything. It is the preview of life’s coming attractions." – Albert Einstein
    
3. “Don’t raise your voice; improve your argument.” – Desmond Tutu
    
4. "You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied." ~ Jerry Fritz 
    
5. “Education is the most powerful weapon which you can use to change the world.” — Nelson Mandela
    
6. “Failure is simply the opportunity to begin again, this time more intelligently.” — Henry Ford
    
7. “I attribute my success to this: I never gave or took any excuse.” –Florence Nightingale
    
8. "One customer, well taken care of, could be more valuable than $10,000 worth of advertising.”  – Jim Rohn  
    
9. "Always forgive your enemies. Nothing annoys them more." – Oscar Wilde
    
10. "Yesterday’s home runs don’t win today’s games." – Babe Ruth
     
11. “I find that the harder I work, the more luck I seem to have.” —Thomas Jefferson
     
12. "Being on par in terms of price and quality only gets you into the game. Service wins the game." ~ Tony Allesandra 
           
13. “I have not failed. I’ve just found 10,000 ways that won’t work.” – Thomas A. Edison
     
14. “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.” – Martin Luther King Junior
     
15. “It is never too late to be what you might have been.” – George Eliot
     
16. “Your website isn’t the center of your universe. Your Facebook page isn’t the center of your universe. Your mobile app isn’t the center of your universe. The customer is the center of your universe.” – Bruce Ernst
     
17. “It is our choices, that show what we truly are, far more than our abilities.” – J. K Rowling
     
18. “Life is about making an impact, not making an income.” –Kevin Kruse
     
19. “Live out your beliefs and you can turn the world around.” — Henry David Thoreau
     
20. “Opportunities don’t happen, you create them.” —Chris Grosser
     
21. “Perfection is not attainable, but if we chase perfection we can catch excellence.” — Vince Lombardi
     
22. “Strive not to be a success, but rather to be of value.” –Albert Einstein
     
23. “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg
     
24. “The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.” – Vince Lombardi
     
25. “The mind is everything. What you think you become.” –Buddha
     
26. “You are never too old to set another goal or to dream a new dream.” — C. S. Lewis
    
        
27. "Your most unhappy customers are your greatest source of learning." - Bill Gates  
28. “You have to learn the rules of the game. And then you have to play better than anyone else.” – Albert Einstein
     
29. "Hire character. Train skill." – Peter Schutz
     
30. "Success is the sum of small efforts, repeated day in and day out." – Robert Collier
     
31. "The best time to plant a tree was 20 years ago. The second best time is now.”  –Chinese Proverb
     
32. "To some the glass is 1/2 full. To others its 1/2 empty. The opportunist takes it, drinks it & doesn’t engage in the argument.”
     
33. "Whether you think you can or you think you can’t, you’re right.” Henry Ford     
34. "Customer Satisfaction Is Worthless Customer Loyalty Is Priceless." - Jeffrey Gitomer  
     
35. “Opportunity is missed by most people because it is dressed in overalls and looks like work” – Thomas Edison

Happy Monday all, let’s kill it this week :D!

I recently added this into a forum post comment and realized that some more people might be wondering about this. Where is the best place to ask for a referral? It used to be simple, after they purchase - ask for a referral or maybe give them a call a few weeks later and ask. Definitely YES, those two options are prime time referral asking opportunities but now that we live in a digital era, there are A LOT more opportunities to connect and engage with your customer. Meaning there are a lot more opportunities to ask for a referral. 

I like to refer to all the best places to "ask for a referral" as touch points and I will preface this with my STRONG, STRONG opinion that a referral program is great, it's awesome, but without an offer of some kind.... some of these ideas can just fall flat... why? People are busy. The offer is the stickiness that you need to go above the competition and stay at the top of your customer's mind. PS: People prefer MOOLAH, according to a recent survey," 77% of Americans identify money as their reward of choice."

I know some dealers are hesitant/wary about the effective on ROI when combined with the reward amount but it's such an inaccurate/outdated way of thinking about it.  I love showing stats and blowing dealer's minds about ROI on referrals. Just look at PayPal: "By directly paying people to sign up and then paying them more to refer friends, we achieved extraordinary growth. This strategy cost us $20 per customer, but it also led to 7% daily growth, which meant that our base nearly doubled every 10 days." - Peter Thiel - Co-founder. And not only is it cost effective, it improves your overall branding and marketing efforts, according to MarketShare, "Word-of-mouth has been shown to improve marketing effectiveness by up to 54%."

My biggest tip to gain the most traction in the following scenarios is that you ensure your referral offer/request gets to your customers QUICKLY and it is EASY for them to refer. Below are a few top touch points for a dealership/salesperson, GM or really any employee to ask for a referral.

Top Touch Points:
The most common and effective touch is point is immediately after purchase, but as we all know, our salespeople are usually a little too stoked about closing the deal to handle this.. so here are some other just as effective and awesome places to ask for a referral or promote your referral program:

1. In-Store Marketing - while they wait for F&I create some flyers that highlight the referral program + $OFFER, your customer is at their most elated point right now, they just bought a car but now they're stuck waiting. They also know they've just spent a pretty penny and the option to help a friend and earn is extremely appealing at this point. We've had some customers submit 4+ referral leads while they've waited for F&I!
    
2. F&I - your F&I manager is an ideal candidate to quickly explain the benefits of your referral program AKA earning money, while they are also discussing added benefits of new features AKA customer's spending money. a nice ying and yang for the customer to think about.
    
3. Automated Emails - if you have a follow up email to thank your customer for their purchase - add a referral button or banner that leads to a form to submit referrals. It's easy and efficient.  Your salesperson should also be following up with an email or call (mentioned below) but if they forget or won't, these automated emails and inclusive offers will ensure it gets to your customer!
    
4. Salesperson Follow up - 1-2 weeks after purchase. A simple check in to see how the car is doing can lead to a LOT of useful information, like if anything is wrong and the salesperson can help remedy this -- Major brownie points and once resolved, it's the perfect time to ask.
    
5. REVIEWS! If you get a good review, comment back and give them a link to a landing page/form where they can submit referrals!  The lack of action on positive reviews sometimes saddens me, they are a GOLD MINE for referrals... and even the bad one's offer up so much learning experience --- a goodwill offer can help a ton here too.
    
6. Social Media - It's where you have a lot of loyal fans (as long as you didn't pay for them J ) You can post about referral offers a TON here, it's something that actually won’t get old because you're offering up a reward. You can also tag your most loyal customers and invite them to join. Gamifying this is also really cool, whoever submits the most referrals this month gets 3 free oil changes. (it doesn't always have to be money offers, it's just what the people prefer.)
    
7. Your Website - PLEASE!!! do not stuff it into one of your million and billions of tabs and sub tabs. Nobody really looks in those. Make it a nice attractive button that highlights the offer amount "$100 Referral Credit" $100 Reward Credit". Something to catch their eye. 

What do you think? Is one of these spots surprising to you or currently ineffective and not receiving enough traction? Do you have an easy way for your customers to submit referrals? Do you have a motivating incentive in place? Do you have a lot of success in another place, let us know!

We all know referrals are great but do you truly know how powerful a customer or employee referral is for your store? How many sales one customer can generate for you? How many customers would refer for an incentive offer/reward? How many more customers would become brand advocates if you had a referral program in place?

And if you are aware of just even one of those, are you honestly leveraging the power of word of mouth marketing and your happy customers to help sell you more cars or are you too busy putting all of your eggs in your digital basket, full of SEO, social media, retargeting, electronic displays, PPC, and more?

Your website isn’t the center of your universe. Your Facebook page isn’t the center of your universe. Your mobile app isn’t the center of your universe. The customer is the center of your universe.  – Bruce Ernst

Here are 30 referral stats that will make you want to start your own referral program today:

1. People are 4 times more likely to buy when referred by a friend – Nielsen
    
2. The lifetime value of a new referral customer is 16% higher than your average customer. –  Wharton School of Business
    
3. More than 50% of people are likely to give a referral if offered a direct incentive, social recognition or access to an exclusive loyalty program. –  Software Advice
    
4. Millennials ranked word-of-mouth as the #1 influencer in their purchasing decisions about clothes, packaged goods, big-ticket items (like travel and electronics), and financial products. Baby Boomers also ranked word-of-mouth as being most influential in their purchasing decisions about big-ticket items and financial products. - Radius Global
    
5. The Average Gross for a Dealership Referrals = $1,298, Fresh Ups = $817. - NADA
    
6. "Referral Marketing is the dark horse of marketing, a dark horse is a candidate or competitor about whom little is known but who unexpectedly wins or succeeds." - GIGAOM
    
7. Referrals have a 51% Service Usage, Fresh-Ups have just 29% service usage. - NADA
    
8. Word-of-mouth has been shown to improve marketing effectiveness by up to 54%. –  
   MarketShare
    
9. 77% of consumers are more likely to buy a new product when learning about it from friends or family. – Nielsen
    
10. "Word-of-mouth can prompt a consumer to consider a brand or product in a way that incremental advertising spending simply cannot." - McKinsey
     
11. 81% of U.S. online consumers’ purchase decisions are influenced by their friends’ social media posts versus 78% who are influenced by the posts of the brands they follow on social media. – Market Force
     
12. 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision. – Ogilvy/Google/TNS
     
13. “And the trend toward word-of-mouth has been accelerating. According to Nielsen, the number of consumers who trust purchase recommendations from friends and family and online consumer opinions has grown rapidly since 2009, surpassing the number of those who trust TV and print media, which has plummeted.” - Boston Consulting Group
     
14. “WOM two times more effective than radio advertisements, four times more than personal selling, seven times more than print advertisements.” – Katz and Lazarsfeld
     
15. Referrals are 4x more valuable than a web lead. - Ken Krogue, President and co-founder of InsideSales.com
     
16. 1 offline word of mouth impression drives sales at least 5x more than 1 paid, and much more (as much as 100 times more) for higher-consideration categories. - WOMMA
     
17. 83% of consumers are willing to refer after a positive experience... but only 29% actually do. - Texas Tech

18. Referrals have a 96% CSI, Compared to 73% for Fresh-Ups. - NADA

19. 72% of marketers still do not recognize and leverage the value of customer referrals. - Loyalty360
     
20. 65% of consumers say that receiving rewards impacts their frequency of purchase. - Social Annex
     
21. 69% of consumers say that they’re more likely to try a brand if it gives rewards. - Social Annex
     
22. Customers acquired through referrals spend 200% more than the average customer.
     
23. Word of Mouth is STILL the most influential factor in driving purchases. - Nielsen
     
24. Costco's referral program led to sales of 398,875 new and used vehicles in 2014. - Automotive News
     
25. Referrals have a 61% Closing Rate; Fresh-ups have a 23% Closing Rate. - NADA
     
26. On social media, 58% of consumers share their positive experiences with a company, and ask family, colleagues, and friends for their opinions about brands. - SDL
     
27. When specific case studies were analyzed, researchers found a 10% increase in word-of-mouth (off and online) translated into a sales lifts between 0.2 – 1.5%. - MarketShare/ Keller Fay Group
     
28. 84% of consumers reported always or sometimes taking action based on personal recommendations. 70% said they did the same of online consumer opinions. [Nielsen]
     
29. The Word of Mouth Marketing Association reports that every day in the United States, there are approximately 2.4 billion brand-related conversations. People frequently talk about the products and services they enjoy, and the companies who offer them.
     

30. "As consumers overwhelmed by product choices tune out the ever-growing barrage of traditional marketing, word of mouth cuts through the noise quickly and effectively." - McKinsey

Worth Noting.

1. Facebook: “People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.” – Mark Zuckerberg, CEO
    
2. Zappos: “We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing. Historically, our number-one growth driver has been from repeat customers and word-of-mouth.” –  Tony Hsieh, CEO
    
3. PayPal: "By directly paying people to sign up and then paying them more to refer friends, we achieved extraordinary growth. This strategy cost us $20 per customer, but it also led to 7% daily growth, which meant that our base nearly doubled every 10 days." - Peter Thiel - Co-founder

Pretty compelling stuff huh?

1. Create a Wow Offer:

Why? Because being realistic is crucial when you are developing your referral program. Your customers are busy with lives of their own and unfortunately you are not the first thing they think about when they wake up nor before they go to sleep... unless they’re currently dealing with a nail lodged into their tire (hi there). Make your brand and store memorable with an offer that STICKS. A sticky/enticing offer lays the ground work for memory recall. Promote an attractive reward for referrals and the next time they overhear a co-worker or friend discussing that they "are in the market for a vehicle", your customer will do the work for you. The goal of a referral program is to turn your customers into your most powerful sales channel and simultaneously create a fun and gamified way to re-engage and retain with these customers.   

Don't think you need a motivating reward?

• 88% of Americans say they would like some sort of incentive (money, product or service, loyalty points, early access, swag) for sharing a product via social media or email. That number jumps to 95% among 18-to-34-year-olds.
• What’s the reward of choice? 77% of Americans say they prefer money.

Now that you’ve got your offer you need to make sure that it’s reaching your customers where they frequent. Think of the places you have the most engagement and traction with your customer base and start promoting there. Did you know that, in the 30-60 days after your customer has purchased their vehicle, they are going to show off their new vehicle to up to as many as 150 friends and family members? That is 150 potential leads you could have coming through your door, all thanks to 1 customer. How many salespeople do you have pulling in 150 potential leads in 60 days? Here are some more great touch points for promoting your referral program:

1. Service Waiting Area 
2. Your Website
3. Social Media Channels 
4. Email Campaigns
5. Review Sites 
6. Other Local Businesses
7. Schools 
8. Local Sport Groups
9. Mobile App

Pro-tip: A one sided offer is great but a double sided offer is twice as good, it can significantly raise your referral leads submissions. A double sided offer allows your brand advocate to feel confident that their friend or family member is receiving a great deal and the care they deserve. What’s a good starting point? Give a $25 test drive to your friend or family and we’ll send you $100 if they purchase! 
 

2. Make it Quick & Easy: 

So now that you’ve enticed your customers to refer with an attractive offer, how do you want them to send you these referrals? Which avenues are open for referral submission to your customers, how do they know about them and how are you going to track these submission methods? There are a ton of ways that your customer can submit their referrals information.. such as:

1. Call their Sales Rep
2. Call the Store
3. Email
4. Walk them in
5. Fill out a form
6. Have their referee mention their name.

You want to ensure your customer has to do as little as possible to submit their referral but you also need to create a unified method of referral submission for your own tracking purposes. A lack of direction on “how to refer" combined with too many “avenues” for referrals can easily deter even your most loyal customers from sending referrals. If they have to look around your website for 5+ seconds, they’re going to abort mission… why? because they’re busy and nobody enjoys being confused on the interweb.

A great way to capture referral leads efficiently is by creating a referral form, you’ll need to embed this form on a landing page (mobile friendly landing page that is!). This landing page should simply and quickly highlight:

1. Your Offer.
2. How Your Program Works.
3. Any tools for referring or other related offers and reminders. 
4. The submission form with required fields.

This landing page and form should be promoted and linked through all of the touch points mentioned in step one. Don’t forget to have a strong mobile focus. We’re busier than ever now and constantly on the go, (smartphone in tow) you’ll want to ensure your customers can refer from anywhere. Embedding this form into your smartphone app will allow your customer to do just that. 

Imagine, one of your customers, Sarah, is a waitress and she’s talking to a customer who mentions they are in the market for a new vehicle, Sarah had a great experience buying her car with you & knows that your store has an attractive incentive offer, so she definitely wants to refer him. The issue is that, she isn’t going to remember their name and information when she gets off work in 8 hours and sits down at her computer. Thankfully since your referral form is embedded in your mobile app, Sarah can send her customer’s information in 3 clicks right from her restaurant. 

Giving your customers easy to use “tools" like a landing page and mobile app with a referral form to make referring simple, efficient and engaging will make all the difference in our digital age. 
 

3. Track Your Leads:

Awesome, your customers are now sending you referrals because your offer rocks and it’s easy to refer but what are you doing with those leads once you receive them? If a referral lead is 4x more valuable than a web lead and 36x more valuable than a cold call, you want to ensure it’s being handled with the utmost care, in a timely manner. Making decisions on these types of questions ahead of time will ensure no leads can slip through the cracks:

1. Are you splitting these leads evenly between salespeople?
2. How are you informing a specific salesperson of the new lead? 
3. How should the salesperson follow up? email/call? what does the referee want?
4. How do you know the salespeople are following up?
5. How are these leads being tracked, are they being pushed into your CRM for optimization and comparison tracking?

It’s also important to note that the follow through should not be an internal only effort, this referral submission allows you to engage with your brand advocate (referrer) to:

1. Thank them for their referral. 
2. Promote more offers like downloading your smartphone app.

and to your new lead (the referee) to let them know that:

1. Their friend Bob Joe referred them.
2. A salesperson will be in touch shortly.
3. Give them contact information if they want to be proactive. 

Pro-tip: Once you are confident in your tracking methods and abilities, you can begin to review this data and optimize. Which salespeople are bringing in the most referral leads, who's closing the most? Which customers are sending you the highest quality referrals? These previously untrackable but extremely valuable data items can now be optimized on.

4. Reward Efficiently:

How many calls have you received from “Max”, an upset customer who’s been waiting 5 weeks for their referral check or reward? They referred Sue, and Sue bought a new vehicle 4 weeks ago!! Max has waited and waited for the promised reward but never received it. 

How did that happen though? Human error most likely...

1. Salesperson forgot to attach the internal referral form
2. Salesperson was excited about the sale - they forgot to mention the referral.
3. The referred customer didn’t know they needed to mention the referral…. which why should they? it’s not their job to remind your salesperson or your store of how they ended up there! 

This is the most excruciating mistake a dealership can make when they decide to run their own referral program because it can deter a customer completely. It’s also the point where a referral program can become a bit tumultuous for a dealership. Without a tracking platform, there will always be manual effort on the dealership’s end and unfortunately manual effort can and does involve mistakes and errors but it’s most definitely manageable! You’ll want to follow the below procedure:

1. Review your referral form submission.
2. Ensure the referral was submitted before the sale took place.
   1. This can be confirmed by reviewing the DMS data and matching it back to your referral lead form report.
3. Add stock and deal number information to your referral form submission sheet for your own records. 
4. Send out the Reward. 
5. Let the customer know their reward is on its way!
   1. The sooner the customer receives their reward, the sooner they feel appreciated and the sooner they’ll be willing to send you more referrals, because they know you hold up your side of the deal.
   2. This successful referral allows you to re-engage with your brand advocate (referrer) to:
      1. Thank them for their referral again.
      2. Give them the good news, their reward is on the way. 
      3. Promote more offers.
      4. Remind them to keep referring and earning.
   3. BONUS: you can also engage with your new customer (referee):
      1. Invite them to your referral program for their chance to refer and earn
      2. Promote more offers like downloading your smartphone app.

Pro-tip: Automate all of your engagement communication so that you don’t have to worry about if your salesperson or even you remembered to thank your brand advocates. 

5. Be Referable.

This seems so obvious that it’s silly that i’ve put it on this list, right? But it is important that you are first and foremost, worth referring. You can offer the most enticing reward and make referring easy than eating pie but if your product, employees, and process are less than satisfactory, nobody is going to put their friends and family members through a painful experience to earn a quick couple bucks. And if they would… they probably don’t have many friends left. I really love the idea of focusing on you culture and letting that show itself in improvements in general moral, attitudes and motivation which lead to more employee engagement & retention ... which THEN lead to - improved customer service experiences in all aspects of your store. Quality customer service and great employees are what your customers are ultimately referring, more than your brand and even your product in some cases. 

What do you guys think? Are you referable? And if you are, are you optimizing on referrals through a structured referral program or is your referral program still stuck in the stone age?

Curious to learn more about how to sell more vehicles through referrals? Email me at ktepper@incentivefox.com!