Why Your Customers Don’t Share Your Products

Introduction

Word of mouth marketing, it’s the holy grail. You don’t have to spend money on advertising, your customers are doing it for you. You have a product or service so good that your customers are excited to share it with their friends.

This leads to a $0 CAC (Customer Acquisition Cost) which we all dream about. It leads to viral growth where you have 2 customers and they tell 4 friends. Those 4 friends tell 8 friends and it continues to grow like that until you run out of people!

It’s the only form of marketing that is still organic and “free” in nature. While other advertising channels are getting harder and harder, word of mouth marketing is becoming increasingly important and almost required to avoid dying from the cost of acquiring a customer through ads.

We all know why we want or need word of mouth marketing, but how does it actually happen?

That’s a good question.

We will dive into a bit of the science on why and how customer referrals happen and give you some actionable items you can do to help your business develop customer referrals or what we at Kwik call “Customer Driven Sales,” where your customers are doing the advertising for you. If you have thousands of customers, that means you will have thousands of people trying to sell your products for you, which is far more effective than just one person trying to do it.

Before we start, we just want to preface this by saying our team has helped generate over $6B in revenue through our Customer Driven Sales framework we have created, including over $1.6B in revenue in our founder’s previous e-commerce company that he sold for multiple nine figures just a few years ago.

Everything you’re going to read is validated by our 30 years of experience and billions of dollars in revenue generated.

What Makes a Customer Refer?

First off, you need to understand the concept of pull and push when it comes to referrals. These are the two ways that we see referrals happening. The pull is where the prospective customer is asking your customer about their experience. This could be a friend asking their friends for recommendations in a space they know they’re experts at. Push referrals are where your customer is excited to recommend your brand to others because it’s that great.

Push referrals happen when someone truly loves your brand and product and thinks everyone will love it. Pull referrals are more subtle and typically occur when people trust an individual in a specific category and want their input on items.

So, what makes someone actually tell their friend about your product, why would they do it? We have found 7 factors or reasons why someone would refer a product to their friend.

1. Personal Satisfaction: The customer had a good experience with your brand and when someone asks them about their experience, they share that they had a good one, building trust with the friend. This is typically a pull type of referral where they only share when asked.
2. Social Status: If you have a premium product or something that gives social status to your customers, they will be excited to show it off and post about your brand so that their friends know they have the latest and greatest, creating a strong push referral.
3. Insane Value: If the value of your product far exceeds the price and people feel like they’re getting an amazing deal, they will push this referral and recommendation to all their friends so their friends can get the same deal and value that they did.
4. Problem Solving: If your product solves a big problem for someone, they’re likely to share that solution with their friends who are also having that same problem. This is a good push referral.
5. Rewards and Incentives: If you give away enough in a referral, you can really incentivize people to share with their friends because of what they’re getting in return.
6. The Wow Factor: Think of how you heard about ChatGPT or even Tesla. It was your friends or influencers telling you about how cool and amazing this breakthrough was. This wow factor is something that people love; they love to be the ones to introduce their friends to it as well. This creates a push referral.
7. Trust in the Brand: This is crucial to all referrals, no matter what other reason you have to refer your brand, they need to trust your brand. You need to make sure they trust you to deliver on what you say and that you’re going to be around for the long run.

There are the 7 reasons we have found why people refer to their friends; you only need 1 of those reasons and reason 7, Trust in the brand. Trust always has to be present, otherwise, people won’t be willing to risk their reputation on a referral or showing someone something that they know won’t deliver, no matter what the reason is.

So now we know why people refer, let’s look at reasons why people are not referring your brand.

1. Negative Experiences: This is obvious, but if you deliver a negative experience, people won’t tell their friends about you, and if they do, it will be telling them not to use your brand. Which we really don’t want to happen. This typically happens in a pull referral, but if it’s so negative, there is a chance your customers will push and post about their negative experience.
2. Lack of Incentives: If people don’t feel like they get anything for referring your brand, there is no excitement around it. This typically is not a factor if you have a strong wow factor or problem-solving because those people are the most excited to share.
3. Forgetfulness: This is where people are not so excited to share your brand that they forget it exists; they will recommend your brand when their friend asks, and there is a pull referral. But they won’t be pushing it.
4. Complex Referral Process: If you have a referral program but it’s a bit complex and not easy to use, they won’t use it. The more complex the referral process is, the more negative experience they have with your brand and the less likely they are to refer your brand.
5. Lack of Value: If what they got for purchasing was not more than the price, they won’t refer. Because they felt like they didn’t get a good deal or overpaid and they don’t want their friend to do the same.
6. Lack of Reasons to Share: If you don’t have at least 2 of the reasons why someone shares, then there won’t be a referral. If you don’t have a solid product and something that people need, then they won’t refer it. Unfortunately, most businesses don’t have as amazing of a product as they think they do. Otherwise, the product would be selling itself, and they would be having Customer Driven Sales.

So that being that most businesses fall under 6, Lack of Reasons. Let’s talk about ways that you can improve your chances of having your customers refer your brand and unlock Customer Driven Sales.

It’s all about Goodwill.

It sounds confusing or weird, but let us explain it. Your customers buy your product because they feel like they’re going to be getting value out of it. But that has a price to pay. They’re going to be paying for that value. Here is our equation that helps you figure out how much goodwill you have with your customers.

It’s the difference between the value they get and the price they pay.

Value - Price = Goodwill

If your value far exceeds the price they pay, then you have positive goodwill, and the more that your value exceeds the price, the more goodwill you have. If you have less value than price, your goodwill is negative, and this means you’re not going to get any customer referrals.

But when you have a high amount of goodwill with your customers, that goodwill can be transformed into referrals and even long-term customer loyalty and connection with your brand.

So, if you’re not having the customer referrals that you want, you need to increase your value or lower your price. Which lowering your price is something we don’t recommend. You should improve the value they get. We have come up with some ways to increase the value or perceived value that your customers have with your brand.

1. Charge Less: Offering competitive pricing or discounts can boost perceived value. Customers love a good deal, and if they feel like they’re getting more for less, they’re more likely to refer your brand.
2. Faster Shipping: Timely delivery is often underrated but plays a vital role in customer satisfaction. Offering fast and reliable shipping can significantly enhance the perceived value of your products.Pro Tip: Getting same-day fulfillment is a big deal; when customers get the emails that their product has shipped the same day they order, they think you’re the best brand ever.
3. Exclusive Access: Creating a sense of exclusivity or offering early access to new products or features can make customers feel special and increase their perceived value.You see this all the time with VIP programs.
4. Improving the Product: Continuously work on improving your product or service. When customers see your commitment to quality, they’ll perceive higher value.The more the product solves a problem for the right price, the more goodwill you have.
5. Customer Service: Exceptional customer service can turn a mediocre experience into an outstanding one. Customers who receive excellent support are more likely to refer your brand.
6. Community: Building a community around your brand can create a sense of belonging for your customers. Being part of a like-minded group adds an extra layer of perceived value.
7. Adding Rewards and Incentives: This is where we really shine, and our expertise comes in. We help you create rewards and incentives like no one else can that really get your customers hooked while making it easy and fun for them to refer their friends and give their friends an even better deal. It’s a huge

If you’re generating significant goodwill from your customers, it’s essential to ask them for referrals. Consider this a way of requesting a referral in return for the goodwill you’ve provided.

To achieve this, ensure you have several key strategies in place:

1. Incentive Programs: Motivate customers to share your products with others by offering rewards for referrals, such as discounts or free products.
2. Easy Sharing Mechanisms: On your website and apps, implement user-friendly referral tools, like share buttons or referral links.
3. Engagement with Customers: Foster strong relationships through regular communication, active social media engagement, and personalized experiences.
4. Loyalty Programs: Develop a program that rewards repeat customers and encourages them to make referrals.
5. Marketing Campaigns: Effectively market your rewards and referral program to your customers. For more insights, refer to our blog article on this topic.
6. Collaborations and Partnerships: Work with influencers or other brands to add more value for your customers and educate them about your rewards program.

Transforming your customers into a sales force and fostering customer-driven sales is a long-term strategy to ensure your brand’s sustainability, regardless of the current economic or market conditions.

This approach also enhances the enterprise value of your business, potentially leading to greater financial gains than any other strategy.

Creating customer-driven sales can be complex, but it’s essential to approach it strategically and with intent. Just as you focus on running ads and growing your business, it’s crucial to have someone dedicated to developing your customer-driven sales. This is where Kwik comes in.

If we’re a good fit, we could become your partner in Customer Driven Sales. Our team can integrate into your business, managing everything with our proven approach and in-house software tools that make it easy and fun for your customers to share and automate.

To explore how we can assist you in creating Customer Driven Sales, transforming your marketing strategy, and reducing dependence on traditional advertising, click here for a free consultation:

Schedule a Free Consultation

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