Motivation behind Referrals; what makes people refer others and how to increase those referrals?

What is motivation? When I ask my good friend Google, it tells me motivation is: “the reason or reasons one has for acting or behaving in a particular way, or the general desire or willingness of someone to do something”. Sounds about right… but the question is why?


What motivates us? Why buy that pair of jeans? Why go see that movie? Why try that restaurant?


A lot of the time why we do things really doesn’t have much to do with us at all, but what others are telling us or encouraging us to do. Motivation involves biological, emotional, social and cognitive forces. The combination of these things activates our behavior and we have very little personal effect over them.


In the run of a day we are encouraged or motivated by many outside forces and these incentives drive our behavior. We are likely to be most influenced by the people in our daily lives due to accessibility, similarities, and trust.


A New York Times poll found that what motivates us to share the most are:

    • Entertainment/usefulness value 94%
    • Relationship building 78%
    • Involvement 69%
    • Identity building 68%

We don’t share just anything; 94% of people carefully consider whether what they share is relevant. Seventy eight percent share with new friends and colleagues to build upon existing connections. There are 69% of us who share simply to make ourselves feel more connected and involved with the world, and 68% of people shared just to give others a sense of what they care about.


The Incentive Theory of Motivation can be used to explain the drive behind referral marketing. Incentive Theory suggests that behaviors are activated by outside incentives and our actions are directed towards a reward. An incentive can be either a promise or an act provided for a greater action. There can be positive or negative incentives, but let’s focus on the positive ones. Positive incentives satisfy an individual’s needs and wants.


A meta-analysis on incentive programs in the workplace has determined that incentive programs improve performance. Incentive programs engage participants if correctly implemented and monitored whether the award is monetary or non-monetary. Figures show that, on average, performance increases by 22%. These programs can increase interest in work.

When incentivized towards completing a particular task, people’s performance can increase by as much as 15%. With encouragement alongside incentives programmes, performance increased by as much as 27%. When incentive programs are used to encourage “thinking smarter,” performance increases by 26%.


How can we translate that into referral marketing?


In referral marketing positive incentives can be monetary or non-monetary (coupons, gift cards, tickets, free service or products, discounts, and the list goes on!). Monetary incentives do not always trump non-monetary incentives.


In fact in any form of motivation, the circumstance surrounding the reward plays a large role in the determination of drive. You would think that the reward offered would determine the amount of enthusiasm you would receive from an individual, however sometimes just the hope of a reward is a powerful incentive. If your boss told you that you could get a promotion in 6 months if you hit your targets, you would be motivated to work harder and reach that goal even though there is no concrete reward in the end. In certain situations non-monetary incentives are more valuable than the retail value of that award in cash. Trophy value such as acknowledgement from peers and other dynamics can extend the value of non-cash incentives over and above the cash value of the incentive states The Incentive Research Foundation Resource Center. Therefore when choosing the kind of reward consideration should be taken in the desired end goal and surrounding circumstances to determine what will encourage the highest level of motivation.


If the size of the reward does not necessarily matter, then what does?


What matters is whether the reward is worth the amount of effort associated to obtaining it. Not all rewards provide the same amount of incentive, for example: If someone offered to buy me a new outfit if I lost ten pounds in the next month, I would not only laugh, but I wouldn’t be incentivized.


If someone offered me a brand new wardrobe of my choosing if I lost ten pounds in a month, well I would shake their hand and challenge them to an extra pound or two. There needs to be a match-up between the value of the award itself, and the effort required to earn it. Incentives only become powerful if the individual places importance on the reward.


In the end what it comes down to is that we are motivated by outside influencers, influencers being those are part of our daily lives. Consciously or not, we constantly share and influence one another. We follow suggestions by balancing effort and reward acquisition. In referral marketing, you need an intriguing offer, but you also need an attainable one. Referral marketing programs make it easy to motivate a customer to make referrals to friends. Just don’t forget that when implementing your referral program it needs to be easy, and when choosing the reward think “is the effort worth the value?”


Find out how to incentivize with ease through Buyapowa’s referral programs. 


Reported by Aimée MacNeill    


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