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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.

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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.

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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.

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  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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MARKETING

8 major email marketing mistakes and how to avoid them

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8 major email marketing mistakes and how to avoid them

As email marketers, we know we need to personalize the messages we send to subscribers and customers. I can’t think of a single statistic, case study or survey claiming an email program of one-to-everyone campaigns outperforms personalization.

Instead, you’ll find statistics like these:

  • 72% of customers will engage only with personalized messages (Wunderkind Audiences, formerly SmarterHQ)
  • 70% of consumers say that how well a company understands their individual needs affects their loyalty (Salesforce)
  • 71% of customers are frustrated by impersonal shopping experiences (Segment)

But what marketers often don’t understand, especially if they’re new to personalization, is that personalization is not an end in itself. Your objective is not to personalize your email campaigns and lifecycle messages. 

Rather, your objective is to enhance your customer’s experience with your brand. Personalization is one method that can do that, but it’s more than just another tactic. 

It is both an art and a science. The science is having the data and automations to create personalized, one-to-one messages at scale. The art is knowing when and how to use it.

We run into trouble when we think of personalization as the goal instead of the means to achieve a goal. In my work consulting with marketers for both business and consumer brands, I find this misunderstanding leads to eight major marketing mistakes – any of which can prevent you from realizing the immense benefits of personalization.

Mistake #1. Operating without an overall personalization strategy

I see this all too often: marketers find themselves overwhelmed by all the choices they face: 

  • Which personalization technologies to use
  • What to do with all the data they have
  • How to use their data and technology effectively
  • Whether their personalization efforts are paying off

This stems from jumping headfirst into personalization without thinking about how to use it to meet customers’ needs or help them solve problems. 

To avoid being overwhelmed with the mechanics of personalization, follow this three-step process:

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  • Start small. If you aren’t using personalization now, don’t try to set up a full-fledged program right away. Instead, look for quick wins – small areas where you can use basic personalized data to begin creating one-to-one messages. That will get you into the swing of things quickly, without significant investment in time and money. Adding personal data to the body of an email is about as basic as you’ll get, but it can be a start.
  • Test each tactic. See whether that new tactic helps or hurts your work toward your goal. Does adding personal data to each message correlate with higher clicks to your landing page, more conversion or whatever success metric you have chosen?
  • Optimize and move on. Use your testing results to improve each tactic. Then, take what you learned to select and add another personalization tactic, such as adding a module of dynamic content to a broadcast (one to everyone) campaign. 

Mistake #2. Not using both overt and covert personalization

Up to now, you might have thought of in specific terms: personalized subject lines, data reflecting specific actions in the email copy, triggered messages that launch when a customer’s behavior matches your automation settings and other “overt” (or visible) personalization tactics.

“Covert” personalization also employs customer preference or behavior data but doesn’t draw attention to it. Instead of sending an abandoned-browse message that says “We noticed you were viewing this item on our website,” you could add a content module in your next campaign that features those browsed items as recommended purchases, without calling attention to their behavior. It’s a great tactic to use to avoid being seen as creepy.

Think back to my opening statement that personalization is both an art and a science. Here, the art of personalization is knowing when to use overt personalization – purchase and shipping confirmations come to mind – and when you want to take a more covert route. 

Mistake #3. Not maximizing lifecycle automations

Lifecycle automations such as onboarding/first-purchase programs, win-back and reactivation campaigns and other programs tied to the customer lifecycle are innately personalized. 

The copy will be highly personal and the timing spot-on because they are based on customer actions (opting in, purchases, downloads) or inactions (not opening emails, not buying for the first time or showing signs of lapsing after purchasing). 

Better yet, these emails launch automatically – you don’t have to create, schedule or send any of these emails because your marketing automation platform does that for you after you set it up. 

You squander these opportunities if you don’t do everything you can to understand your customer lifecycle and then create automated messaging that reaches out to your customers at these crucial points. This can cost you the customers you worked so hard to acquire, along with their revenue potential.

Mistake #4. Not testing effectively or for long-term gain

Testing helps you discover whether your personalization efforts are bearing fruit. But all too often, marketers test only individual elements of a specific campaign – subject lines, calls to action, images versus no images, personalization versus no personalization  – without looking at whether personalization enhances the customer experience in the long term.

How you measure success is a key part of this equation. The metrics you choose must line up with your objectives. That’s one reason I’ve warned marketers for years against relying on the open rate to measure campaign success. A 50% open rate might be fantastic, but if you didn’t make your goal for sales, revenue, downloads or other conversions, you can’t consider your campaign a success.

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As the objective of personalizing is to enhance the customer journey, it makes sense then that customer lifetime value is a valid metric to measure success on.  To measure how effective your personalization use is, use customer lifetime value over a long time period – months, even years – and compare the results with those from a control group, which receives no personalization. Don’t ignore campaign-level results, but log them and view them over time.

(For more detailed information on testing mistakes and how to avoid them, see my MarTech column 7 Common Problems that Derail A/B/N Email Testing Success.)

Mistake #5. Over-segmenting your customer base

Segmentation is a valuable form of personalization, but it’s easy to go too far with it. If you send only highly segmented campaigns, you could be exclude – and end up losing because of failure to contact – many customers who don’t fit your segmentation criteria. That costs you customers, their potential revenue and the data they would have generated to help you better understand your customer base.

You can avoid this problem with a data-guided segmentation plan that you review and test frequently, a set of automated triggers to enhance the customer’s lifecycle and a well-thought-out program of default or catch-all campaigns for subscribers who don’t meet your other criteria. 

Mistake #6. Not including dynamic content in general email campaigns

We usually think of personalized email as messages in which all the content lines up with customer behavior or preference data, whether overt, as in an abandoned-cart message, or covert, where the content is subtly relevant.

That’s one highly sophisticated approach. It incorporates real-time messaging driven by artificial intelligence and complex integrations with your ecommerce or CRM platforms. But a simple dynamic content module can help you achieve a similar result. I call that “serendipity.”  

When you weave this dynamic content into your general message, it can be a pleasant surprise for your customers and make your relevant content stand out even more. 

Let’s say your company is a cruise line. Customer A opens your emails from time to time but hasn’t booked a cruise yet or browsed different tours on your website. Your next email campaign to this customer – and to everyone else on whom you have little or no data – promotes discounted trips to Hawaii, Fiji and the Mediterranean.

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Customer B hasn’t booked a cruise either, but your data tells you she has browsed your Iceland-Denmark-Greenland cruise recently. With a dynamic content module, her email could show her your Hawaii and Mediterranean cruise offers – and a great price on a trip to Iceland, Denmark and Greenland. Fancy that! 

An email like this conveys the impression that your brand offers exactly what your customers are looking for (covert personalization) without the overt approach of an abandoned-browse email.

Mistake #7. Not using a personal tone in your copy

You can personalize your email copy without a single data point, simply by writing as if you were speaking to your customer face to face. Use a warm, human tone of voice, which ideally should reflect your brand voice. Write copy that sounds like a one-to-one conversation instead of a sales pitch. 

This is where my concept of “helpful marketing” comes into play. How does your brand help your customers achieve their own goals, solve their problems or make them understand you know them as people, not just data points?  

Mistake #8. Not personalizing the entire journey

Once again, this is a scenario in which you take a short-sighted view of personalization – “How do I add personalization to this email campaign?” – instead of looking at the long-term gain: “How can I use personalization to enhance my customer’s experience?”

Personalization doesn’t stop when your customer clicks on your email. It should continue on to your landing page and even be reflected in the website content your customer views. Remember, it’s all about enhancing your customer’s experience.

What happens when your customers click on a personalized offer? Does your landing page greet your customers by name? Show the items they clicked? Present copy that reflects their interests, their loyalty program standing or any other data that’s unique to them?  

Personalization is worth the effort

Yes, personalization takes both art and science into account. You need to handle it carefully so your messages come off as helpful and relevant without veering into creepy territory through data overreaches. But this strategic effort pays off when you can use the power of personalized email to reach out, connect with and retain customers – achieving your goal of enhancing the customer experience.

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Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


About The Author

Kath Pay is CEO at Holistic Email Marketing and the author of the award-winning Amazon #1 best-seller “Holistic Email Marketing: A practical philosophy to revolutionise your business and delight your customers.”

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