Even though we live in a highly digitized world, word of mouth is still a powerful tool for companies.

There is no asset more powerful than a happy customer who tells their friends and family about your product. According to Hubspot, word-of-mouth referrals make up 20-50% of most purchasing decisions.

A majority of customers are willing to provide referrals, but few actually do. Where is the disconnect?

Your company needs to provide an incentive for your customers.

Here’s how to create a referral program that will take your business to the next level in 4 simple steps.

Find your purpose

Before you really dive into the specifics of planning a referral program and attempting to create a viral campaign, make sure you’re targeting the right product.

It is easy at times to get so caught up on the business end of things that you forget to analyze your work from a customer’s perspective.

Along those same lines, ensure that your product is doing well organically. There is no amount of marketing techniques or growth hacking that will replace the simple idea that if your product isn’t worth buying, it won’t be bought.

There are a number of ways you can improve your organic marketing process that should be pursued before spending money on a paid plan.

Make sure you’re publishing high quality content and utilizing visual marketing. “If the content you’re sharing is not prioritizing how it looks, it doesn’t matter how great the info you’re sharing is. No one is looking at it!” says Answer 1.

Once you make sure your content is on point, it’s time to figure out your goals. What do you want for your business?

Are you trying to reach a new demographic? Do you want more customers like your current base? How much are you willing to spend on a referral campaign?

Once you have identified your purpose and set your goals for the program, it’s time to begin.

Pick your tools

Now that you have dedicated enough time to analyzing your organic strategy and figuring out your priorities, you’re ready to select your tools.

There are tons of referral software programs that help with everything from data analytics to planning and implementing campaigns.

Referral Rock has a comprehensive list to get you started. Really understanding your needs will help you find the perfect program. You also need to consider budget, the possibilities of offering initiatives, and how to scale those initiatives correctly.

Make sure to find a program that lets you set parameters and customize everything, and then take your hands off the project. Featured automation is especially helpful for small businesses that might not have the software or people to devote to running the program.

Spread the word

So, you have a purpose and a referral system in place. Time to get the word out!

The best place to start is with your targeted audience. Send out a newsletter detailing exactly what they need to complete a referral with a preview of their reward. The reward can be a gift card, a discount on services, or early access to a new product.

A great group to target is your most involved audience members. People who actively engage with your social media posts, willingly give you reviews on sites like Consumer Affairs, and are loyal customers are the best candidates for a referral program.

A staggering 92% of people trust recommendations from friends and family over any other type of advertising, reports Nielsen. Utilizing this trust from loyal customers is an easy win for marketing.

That being said, make sure you aren’t spamming your customers with constant asks. Nothing will turn off a potential brand advocate faster than too many emails asking for their time.

Experiment and scale

Now that you’ve narrowed your focus, found the right software, and targeted your audience, it’s time to experiment.

If you aren’t tracking your progress, your efforts are already wasted. Why go to all that work only to guess at the results?

Check out Referral Candy’s analysis of the highly successful Starbucks referral program. Good looking visuals, simple instructions, and clear benefits for both referrer and referee were the keys to the campaign’s success.

Track the click-through rates of your emails with different graphics and wording, and see what your audience is responding to.

The more you run these programs and take the time to truly invest into making them the best they can be, the more value you’ll bring to your customers. In turn, they’ll bring that value back to you.

Develop a strong referral system

Developing a strong referral system is an easy way to invest in the long term success of your business. By getting your customers to share with their friends, you gain loyalty, credibility, and, of course, new customers.

Make your business better than ever with a successful customer referral program.