Usually, most business owners focus on the importance of attracting new customers, but pay less attention to customer loyalty and referrals. However, some studies have showed that referred customers are both more profitable and loyal than normal customers. Therefore, optimizing your conversion through referrals is an interesting way to increase your business.
This is the 7th (and last) post in the series that shows you the importance of conversion rate optimization through all the marketing funnel and provide different ideas and examples to improve your website:
- Motivation – Optimizing Your Visitor’s Journey
- Acquisition – Optimizing Your Website for Customer Acquisition
- Activation (I) – How to create a great first experience in Your website
- Activation (II) – How to Improve the CheckOut Experience
- Retention – How to Retain Your Customers
- Revenue – How to Increase the Revenues on Your Website
- Referrals – How to Improve Your Customers Loyalty and Referrals
If you want to get referrals, your customers must believe in you and your products or services. Nowadays, we are in a competitive marketplace where customers find it easy to switch among suppliers. If you want to build a loyal clientele, keeping the customer satisfied isn’t always enough. The fact that your customers are satisfied doesn’t stop them from taking their business to a competitor who offers them something extra.
As we’ve already described in the previous posts, and following the user-centric methodology of David Skok, you should always analyse the main concerns of reasons why your customers change to other supplier.
Have you ever analyzed why do your customers leave you?
Nielsen, in How Loyal are Your Customers?, describes a performed global study outlining the reasons why consumers switch brands, service providers, or retailers, identifying the loyalty program attributes that potentially have the most staying power.
The graphic published in said article speaks by itself:
This analysis serves to identify the main concerns that motivate your customers to change to other provider, as well as the main motivations to become your client. As you can observe, if you thought that the most important thing is to focus on just improving the features of your services, well, this is just the 8% reason on the Global Average chart.
A study conducted by the Goethe University Frankfurt of Pennsylvania on referral programs and customer value found that referred customers were both more profitable and loyal than normal customers. Referred customers had a higher contribution margin and a higher retention rate and were more valuable in both the short and long run.
If referrals are one of the most powerful tools in marketing, let’s be sure that your website is full of referrals that will persuade them to convert.
Note, however, that the approach to take may be different depending on your business type. Is your service or product something that can be referred at any time, as for example a retail store? Or do you offer a service that is only needed at certain times, as for example a divorce lawyer?
In the former, it’s possible to use discounts, direct messaging, and regular follow ups to get people to refer you to their family and friends, but for the latter, that would be awkward, forced, and ineffective.
In both cases, visitors to your website should find enough referrals to persuade them to convert and, even your already-customers should find easy ways to refer your product or service to others.
Persuasion – Dr. Robert B. Cialdini’s 6 principles of influcene
To measure the capacity of persuasion of your website, the most known marketing approach is to analyze the 6 principles of influence of Dr. Robert B. Cialdini of his must-read book: “Influence: The Psychology of Persuasion”
There are plenty of articles with examples of how to improve the conversion rate based on these six principles. See for example: Samuel Hum: Robert Cialidini’s Principles of Persuasion, Jeremy Smith: How to Apply Cialdini’s six principles of influence to your website, How to Use Cialdini’s 6 principles of persuasion to boost conversions of Mark Schenker, and How to use the 6 principles of persuasion to create landing pages that convert of Sean Ellis, among others.
Based on the above information, let’s see which are these six principles (also known as the six weapons of influence), and some examples of how your website can be improved according to them.
People generally feel indebted to those who do something for them or give them a gift.
When you offer something first for free, if it’s helpful, people feel a real sense of indebtedness towards you. This indebtedness has a significant effect: your subsequent requests would make them much more likely to return the favor. The feeling of indebt generates a feeling of loyalty to you.
There are several ways you can utilize the reciprocity principle to generate the feeling of loyalty to your visitors. The basic idea is to offer something for free first. So, analyse and study what you can offer for free to your visitors that can be valuable for them. For example: insightful blog articles, free ebooks, webminars, podcasts, free resources, or free trials.
Then, create some A/B tests to see which offer converts better or gets more referrals.
Example: let’s consider you sell a SaaS
Suggested Test : Create an A/B Page Experiment of your Resources Page. Try one version asking directly to join as subscriber in the same page, and another one without asking the same but later one with a pop-up.
Commitment & Consistency
Cialdini says that we have a deep desire to be consistent. For this reason, once we’ve committed to something, we’re then more inclined to go through with it. If you can get your customer to commit to something small (e.g. wearing an awareness ribbon, signing a petition, etc.), then he or she will be more likely to commit to bigger actions (e.g. giving you time or money) later one.
For instance, you’d probably be more likely to buy a software service if you had shown interest in receiving the beta trial for free the first time. And of course, joining to the free-trial period of any service is big step towards conversion.
Thinking on referrals, a good idea is to make your visitor participate with a process that will encourage others to participate.
Example: let’s consider the grocery store
Suggested Test : Create an A/B Landing Page Experiment where you create a contest. Try one version proposing a voting contest betwen recipes made with any product.
In this test, your visitors have to send their recipe with a picture and all recipes are published. Then, they have to invite their friends to vote the best recipe. Finally, the winners will receive a gift. Voting competitions are effective because contestants often involve their peers in the voting process and as result broadens the net of visitors to the site.
When we see (many) others using a product or service, that confirms to us that it’s good. The idea is that people will do what other people around them are doing. This is why it’s so important to include a testimonials section (or cases studies) and be sure that any post in your blog can be referred in social networks.
Example: let’s consider the previous grocery shop
Suggested Test : Create an A/B Page Experiment of the Recipes page and be sure that it’s easy to share it with your friends.
Example: on your software SaaS service
Suggested Test: Create an A/B Landing Page Experiment and test the inclusion of reviews an other social proofs.
According to Cialdini, people tend to obey authority figures (even if those figures of authority are objectionable) and ask others to commit objectionable act. It’s simply the essential nature of the human animal! Cialdini also covers these three factors that trigger the authority principle:
- Titles – Dr., Prof., Ph.D., President, Chairman, Founder, CEO, Industry experts
- Clothes – Uniforms, Suits, religious outfits (worn by pastors, monks, nuns, priests)
- Trappings – Accessories that go along with certain positions/roles (e.g. police badges, religious robes, rosaries, expensive suits, nice cars, etc.)
Example: on your business web
Suggested Test : Create an A/B Landing Page Experiment and test wether just CEO titles are more popular than Ph.D.
People are more likely to buy if they like the person selling them. Cialdini lists 5 factors that powers the principle of Liking:
- Physical attractiveness – Good looks suggest other favorable traits, i.e. honesty, humor, trustworthiness.
- Similarity – We like people similar to us in terms of interests, opinions, personality, background, etc.
- Compliments – We love to receive praises, and tend to like those who give it.
- Contact and Cooperation – We feel a sense of commonality when working with others to fulfill a common goal.
- Conditioning and Association – We like looking at models, and thus become more favorable towards the cars behind them.
How to use the principle of liking on your website:
• Use images of friendly people who belong to the same demographics as your site visitors.
• Use conversional copy that speaks your visitors’ language.
• Relate to your visitor so they feel like they’re with people just like them.
Example: on the grocery shop
Suggested Test : Create an A/B Page Experiment of the About Us Page, with different alternatives of images and test which one your visitors like the most.
One of our clients that owns a family business that sells oranges that are collected directly from the trees the day they are ordered, discovered that an image with his children collecting the oranges was the preferred one.
We are always drawn to things that are exclusive and hard to come by, because we assume that these things are usually better than those that are easily available. We link availability to quality.
Keeping this in mind, sense of urgency can be created by offering:
- Limited-number – the product or service is in short supply and won’t be available once it runs out.
- Limited-time – the product or service is only available during that time period.
- One-of-a-kind Specials – sometimes utilize one or both of the above techniques. Also from one-off events (e.g. collaborations, anniversaries).
- Utilising Competitions – some kind of products or services can be sell through auctions or bids and people want things more because other people also want them.
Example: on any business
Suggested Test : Create an A/B Landing Page Experiment and test whether including urgency elements helps obtaining more referrals.
I hope that you’ve find the above examples useful to test in your website. Since referrals is one of the most powerful tool to get more customers, be sure that your website follows the Cialdini’s principles of persuasion to get more referrals.
Featured Image by chrisada.