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Does Your Company Need An Employee Referral Program? [Examples + Best Practices]

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Does Your Company Need An Employee Referral Program? [Examples + Best Practices]

Finding qualified candidates to fill your open positions can be challenging. Job posting sites claim to make the process easy by connecting you with hundreds if not thousands of potential employees. But having such a large pool of candidates can be overwhelming.

Just thinking about the sheer volume of work involved in reviewing applications, narrowing them down to good fits, and then vetting those potential candidates is enough to make anyone’s head explode.

You work with or run a solid organization with wonderful employees. How do you make sure that you don’t get a bevy of potential candidates, but rather the right candidate?

Look at this like finding the perfect place to take your significant other on a special occasion. Sure, you could do a Google search for random restaurants in your neighborhood. You could even check a review site for recommendations.

However, you don’t know any of those people, so how much weight does their opinion really carry? Instead of taking a risk on a very special evening, why not reach out to the people you trust? Asking friends and family for a recommendation is a much safer avenue to finding the perfect date night experience.

What if we applied this type of thinking to your search for the perfect employee? Rather than leave it up to a random internet search, ask the people you already know, like, and trust… your employees.

What is an employee referral program?

An employee referral program is a structured system by which you ask existing employees to recommend people they know for open positions within your organization. Employees often receive some sort of incentive for their assistance.

An employee referral program leverages the power of your employees’ networks and can save you time, money, and a huge headache when it comes to hiring the best talent for your business.

Benefits of an Employee Referral Program

There are many benefits to utilizing an employee referral program as part of your hiring strategy. These include:

1. High Quality Hires

Good employees know what skills are necessary to excel in a position and understand the workplace culture. When they recommend someone for the job, there’s a good chance they have the qualifications necessary to successfully perform in the role.

2. Decreased Turnover Rates

With employee turnover rates on the rise, you’ll want to keep it front of mind when you’re making hiring decisions. According to ERIN, 45% of referred employees stay with a company longer compared to 22% from job boards and 33% from career sites.

3. Less Time and Lower Cost Per Hire

According to LinkedIn, employees hired through referrals take an average of 29 days to hire and onboard, whereas job boards can take 39 days and a career site can take upwards of 55 days. The less time it takes to hire and onboard means less revenue lost, fewer employees stressed because they are handling multiple jobs, and more productivity from your new hire.

Using a headhunter? According to Jobvite, you can expect to pay between 15% and 25% of the gross annual salary of the candidate. If you’re hiring an employee at $100k per year, that’s $15k to $25k in headhunting fees. The cost to reward an employee for an amazing referral? Around $2,000.

4. Increase Employee Satisfaction and Loyalty

Doesn’t it feel nice when you have a hand in the decision-making process? Employees that refer candidates feel like they’ve contributed to the company, making them more engaged and more likely to stay.

Employee Referral Program Ideas

Now that you see the benefit to you as the employer or hiring manager, how do you create an employee referral program that encourages your existing employees to introduce you to their quality contacts? There are a number of ways to do this and best practices that you can adopt to get the most out of your program.

Make it Clear What You’re Looking For

In a mid-sized to a large company, one department may have no idea what another one is working on. In order for employees to make connections, they need to know what your expectations are for the new position. When you reach out to employees looking for suggestions, provide them with all the details you can. This should include:

Make it Easy for Employees to Refer

Consider the referral experience from your employees’ point of view. Is there a simple form for them to submit when they recommend someone, or do they have to jump through a variety of complicated hoops to pass along their referrals? Some companies even host recruitment happy hours where existing employees can invite friends who might be a good fit.

The easier you make it for your employees to refer their contacts, the more quality candidates will be presented to you.

Keep Your Employees Updated on Referral Status

It’s frustrating to make a suggestion or an introduction and not know if it’s been acted upon. When your employee recommends a colleague, keep them updated as to the steps of the hiring process. Some times to check-in include:

  • When you receive an application
  • When you make contact
  • When an interview is scheduled
  • When a position has been offered to their contact
  • When the position has been given to someone else (after the candidate has been contacted)

Provide a Juicy Incentive

Surprisingly, this may not always be a monetary reward. While money is always appreciated, you can offer a combination of “cash” and experiences, time off, gifts, etc. For some, these may be even more desired than a financial incentive. One great option is to give your employees the choice. That way, you know they’ll be motivated to help. A few employee referral incentive ideas to get your creative juices flowing:

  • Cash bonuses
  • Gift certificates to their favorite restaurants and local establishments
  • Weekend getaways or week-long excursions for frequent referrers
  • VIP parking
  • Show tickets
  • Physical gifts (it’s important to let them choose so they don’t end up with something they can’t use)
  • Perks like a gym membership or massage

The sky’s the limit when it comes to thanking your employees for their referrals. You can also consider using a platform like XoxoDay to make distributing employee referral perks as easy and streamlined as possible.

Show Appreciation for “Frequent Referrers”

If you’ve got employees that consistently send you quality employee candidates, acknowledge them publicly. This shows your amazing team members that they are appreciated and motivates other employees to step up their referral game.

Employee Referral Program Examples

Looking for real-world examples of these programs in action? We’ve compiled a few employee referral program samples to introduce you to some of the possibilities.

  1. Inmobi, a mobile advertising company offers referring employees the choice of a bike or a trip to Bali. They park the vehicles in front of the company headquarters to motivate employees to participate.
  2. Accenture, a consulting and IT company encourages philanthropy and community involvement by letting their employees donate a part of their referral bonus to a charity of their choice.
  3. Distillery, an American software development company gifts their employees new tech gadgets for every referral they make.
  4. Atlassian software company encourages employees to “Refer-a-Mate” and offers them $2,000 in cash bonuses.
  5. Intel tech company takes financial incentives one step further by doubling their employee referral reward for women, minorities, and veterans that are referred to the company.

If you’d like to tap into a pool of qualified, trustworthy, easy-to-hire (and onboard) candidates, an employee referral program can help. Instituting this type of hiring process in your organization can save you money, time, headaches, and the pain of having to repeatedly hire for the same position when your first employee doesn’t work out well. In addition, you’ll improve your workplace culture and enhance your brand.

An employee referral program is the best thing you can do to improve the quality of your incoming employees. Choose your incentives wisely and then watch the quality candidates roll on in.

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45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]

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45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]

Creating content isn’t always a walk in the park. (In fact, it can sometimes feel more like trying to swim against the current.)

While other parts of business and marketing are becoming increasingly automated, content creation is still a very manual job. (more…)

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MARKETING

How data clean rooms might help keep the internet open

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How data clean rooms might help keep the internet open

Are data clean rooms the solution to what IAB CEO David Cohen has called the “slow-motion train wreck” of addressability? Voices at the IAB will tell you that they have a big role to play.

“The issue with addressability is that once cookies go away, and with the loss of identifiers, about 80% of the addressable market will become unknown audiences which is why there is a need for privacy-centric consent and a better consent-value exchange,” said Jeffrey Bustos, VP, measurement, addressability and data at the IAB.

“Everyone’s talking about first-party data, and it is very valuable,” he explained, “but most publishers who don’t have sign-on, they have about 3 to 10% of their readership’s first-party data.” First-party data, from the perspective of advertisers who want to reach relevant and audiences, and publishers who want to offer valuable inventory, just isn’t enough.

Why we care. Two years ago, who was talking about data clean rooms? The surge of interest is recent and significant, according to the IAB. DCRs have the potential, at least, to keep brands in touch with their audiences on the open internet; to maintain viability for publishers’ inventories; and to provide sophisticated measurement capabilities.

How data clean rooms can help. DCRs are a type of privacy-enhancing technology that allows data owners (including brands and publishers) to share customer first-party data in a privacy-compliant way. Clean rooms are secure spaces where first-party data from a number of sources can be resolved to the same customer’s profile while that profile remains anonymized.

In other words, a DCR is a kind of Switzerland — a space where a truce is called on competition while first-party data is enriched without compromising privacy.

“The value of a data clean room is that a publisher is able to collaborate with a brand across both their data sources and the brand is able to understand audience behavior,” said Bestos. For example, a brand selling eye-glasses might know nothing about their customers except basic transactional data — and that they wear glasses. Matching profiles with a publisher’s behavioral data provides enrichment.

“If you’re able to understand behavioral context, you’re able to understand what your customers are reading, what they’re interested in, what their hobbies are,” said Bustos. Armed with those insights, a brand has a better idea of what kind of content they want to advertise against.

The publisher does need to have a certain level of first-party data for the matching to take place, even if it doesn’t have a universal requirement for sign-ins like The New York Times. A publisher may be able to match only a small percentage of the eye-glass vendor’s customers, but if they like reading the sports and arts sections, at least that gives some directional guidance as to what audience the vendor should target.

Dig deeper: Why we care about data clean rooms

What counts as good matching? In its “State of Data 2023” report, which focuses almost exclusively on data clean rooms, concern is expressed that DCR efficacy might be threatened by poor match rates. Average match rates hover around 50% (less for some types of DCR).

Bustos is keen to put this into context. “When you are matching data from a cookie perspective, match rates are usually about 70-ish percent,” he said, so 50% isn’t terrible, although there’s room for improvement.

One obstacle is a persistent lack of interoperability between identity solutions — although it does exist; LiveRamp’s RampID is interoperable, for example, with The Trade Desk’s UID2.

Nevertheless, said Bustos, “it’s incredibly difficult for publishers. They have a bunch of identity pixels firing for all these different things. You don’t know which identity provider to use. Definitely a long road ahead to make sure there’s interoperability.”

Maintaining an open internet. If DCRs can contribute to solving the addressability problem they will also contribute to the challenge of keeping the internet open. Walled gardens like Facebook do have rich troves of first-party and behavioral data; brands can access those audiences, but with very limited visibility into them.

“The reason CTV is a really valuable proposition for advertisers is that you are able to identify the user 1:1 which is really powerful,” Bustos said. “Your standard news or editorial publisher doesn’t have that. I mean, the New York Times has moved to that and it’s been incredibly successful for them.” In order to compete with the walled gardens and streaming services, publishers need to offer some degree of addressability — and without relying on cookies.

But DCRs are a heavy lift. Data maturity is an important qualification for getting the most out of a DCR. The IAB report shows that, of the brands evaluating or using DCRs, over 70% have other data-related technologies like CDPs and DMPs.

“If you want a data clean room,” Bustos explained, “there are a lot of other technological solutions you have to have in place before. You need to make sure you have strong data assets.” He also recommends starting out by asking what you want to achieve, not what technology would be nice to have. “The first question is, what do you want to accomplish? You may not need a DCR. ‘I want to do this,’ then see what tools would get you to that.”

Understand also that implementation is going to require talent. “It is a demanding project in terms of the set-up,” said Bustos, “and there’s been significant growth in consulting companies and agencies helping set up these data clean rooms. You do need a lot of people, so it’s more efficient to hire outside help for the set up, and then just have a maintenance crew in-house.”

Underuse of measurement capabilities. One key finding in the IAB’s research is that DCR users are exploiting the audience matching capabilities much more than realizing the potential for measurement and attribution. “You need very strong data scientists and engineers to build advanced models,” Bustos said.

“A lot of brands that look into this say, ‘I want to be able to do a predictive analysis of my high lifetime value customers that are going to buy in the next 90 days.’ Or ‘I want to be able to measure which channels are driving the most incremental lift.’ It’s very complex analyses they want to do; but they don’t really have a reason as to why. What is the point? Understand your outcome and develop a sequential data strategy.”

Trying to understand incremental lift from your marketing can take a long time, he warned. “But you can easily do a reach and frequency and overlap analysis.” That will identify wasted investment in channels and as a by-product suggest where incremental lift is occurring. “There’s a need for companies to know what they want, identify what the outcome is, and then there are steps that are going to get you there. That’s also going to help to prove out ROI.”

Dig deeper: Failure to get the most out of data clean rooms is costing marketers money


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Ascend | DigitalMarketer

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Ascend | DigitalMarketer

At this stage, your goal is to generate repeat buys and real profits. While your entry-point offer was designed for conversions, your ascension offers should be geared for profits—because if you’re serving your customers well, they’ll want to buy again and again.

Ascension offers may be simple upsells made after that initial purchase… bigger, better solutions… or “done for you” add-ons.

So now we must ask ourselves, what is our core flagship offer and how do we continue to deliver value after the first sale is made? What is the thing that we are selling? 

How we continue to deliver value after the first sale is really important, because having upsells and cross sales gives you the ability to sell to customers you already have. It will give you higher Average Customer values, which is going to give you higher margins. Which means you can spend more to acquire new customers. 

Why does this matter? It matters because of this universal law of marketing and customer acquisition, he or she who is able and willing to spend the most to acquire a customer wins.

Very often the business with the best product messaging very often is the business that can throw the most into customer acquisition. Now there are two ways to do that.

The first way is to just raise a lot of money. The problem is if you have a lot of money, that doesn’t last forever. At some point you need economics. 

The second way, and the most timeless and predictable approach, is to simply have the highest value customers of anyone in your market. If your customers are worth more to you than they are to your competitors, you can spend more to acquire them at the same margin. 

If a customer is worth twice as much to you than it is to your competitor, you can spend twice as much trying to acquire them to make the same margin. You can invest in your customer acquisition, because your customers are investing in your business. You can invest in your customer experiences, and when we invest more into the customer we build brands that have greater value. Meaning, people are more likely to choose you over someone else, which can actually lower acquisition costs. 

Happy customers refer others to us, which is called zero dollar customer acquisition, and generally just ensures you’re making a bigger impact. You can invest more in the customer experience and customer acquisition process if you don’t have high margins. 

If you deliver a preview experience, you can utilize revenue maximizers like up sells, cross sales, and bundles. These are things that would follow up the initial sale or are combined with the initial sale to increase the Average Customer Value.

The best example of an immediate upsell is the classic McDonalds, “would you like fries with that?” You got just a burger, do you also want fries with that? 

What distinguishes an upsell from other types of follow up offers is the upsell promise, the same end result for a bigger and better end result. 

What’s your desired result when you go to McDonalds? It’s not to eat healthy food, and it’s not even to eat a small amount of food. When you go to McDonalds your job is to have a tasty, greasy, predictable inexpensive meal. No one is going there because it’s healthy, you’re going there because you want to eat good. 

It’s predictable. It’s not going to break the bank for a hamburger, neither will adding fries or a Coke. It’s the same experience, but it’s BIGGER and BETTER. 

Amazon does this all of the time with their “Customers Who Bought This Also Bought …” But this one is algorithmic. The point of a cross sell is that it is relevant to the consumer, but it doesn’t necessarily have to be aligned with the original purchase. What you don’t want to do is start someone down one path and confuse them.

You can make this process easy with Bundles and Kits. With a bundle or a kit you’re essentially saying to someone, “you can buy just one piece, or you can get this bundle that does all of these other things for a little bit more. And it’s a higher value.”

The idea behind bundles and kits is that we are adding to the primary offer, not offering them something different. We’re simply promising to get them this desired result in higher definition. 

The Elements of High-Converting Revenue Maximizers (like our bundles and kits) are:

  1. Speed

If you’re an e-Commerce business, selling a physical product, this can look like: offering free shipping for orders $X or more. We’re looking to get your customers the same desired result, but with less work for them.

  1. Automation

If you’re a furniture business, and you want to add a Revenue Maximizer, this can look like: Right now for an extra $X our highly trained employees will come and put this together for you. 

  1. Access 

People will pay for speed, they’ll pay for less work, but they will also pay for a look behind the curtain. Think about the people who pay for Backstage Passes. Your customers will pay for a VIP experience just so they can kind of see how everything works. 

Remember, the ascension stage doesn’t have to stop. Once you have a customer, you should do your best to make them a customer for life. You should continue serving them. Continue asking them, “what needs are we still not meeting” and seek to meet those needs. 

It is your job as a marketer to seek out to discover these needs, to bring these back to the product team, because that’s what’s going to enable you to fully maximize the average customer value. Which is going to enable you to have a whole lot more to spend to acquire those customers and make your job a whole lot easier. 

Now that you understand the importance of the ascend stage, let’s apply it to our examples.

Hazel & Hem could have free priority shipping over $150, a “Boutique Points” reward program with exclusive “double point” days to encourage spending, and an exclusive “Stylist Package” that includes a full outfit custom selected for the customer. 

Cyrus & Clark can retain current clients by offering an annual strategic plan, “Done for You” Marketing services that execute on the strategic plan, and the top tier would allow customers to be the exclusive company that Cyrus & Clark services in specific geographical territories.



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