How to transition from customer engagement to customer partnership

When customer engagement strategies are implemented right, they continue to support the success of customers and allow a company to keep building relationships within an account. These engaged customer have a better chance at upsell and cross-sell, increasing their lifetime value. But every account has a ceiling, where it has reached its full potential for cross-sell and upsell, or maybe never had the potential to begin with. However, this doesn’t mean that the monetization of customer experience ends. A customer’s lifetime value still has a substantial ability to grow by transitioning from methods used to influence customer experience to methods that can build a partnership between a company and its customers.

Customer partnership is when a company’s customers shares in the desire to grow and better the business, products or services. Here the company acknowledges the immense influence their customers have over the business and their role in its continued success. This leads a company to then enable customers to impact their revenue growth even further. Below are 5 steps to start enabling this.

5 steps to integrating customer partnership into your business practices

Remember the phrase, “You jump, I jump Jack.”? It comes from Titanic, but relates to customer partnership. It goes along with the idea that if your customers succeed you succeed, and vice-versa. Enforcing this message with customers is key to a customer partnership. This should have been conveyed starting all the way back in the sales process, but no matter when it starts make sure it is perceived as sincere by following it up with action. By making sure you support your customers’ success you start to build a foundation for partnership. Here is how.

1. Offer training to customers on new products and features.

Every business is constantly innovating. That means that customer need to be supported. Through customer engagement you might be sending email updates or having an account executive reach out to inform their customer on new opportunities within a new feature or product. But this doesn’t offer true support. It is often then left up to the customer to take the initiative to learn and apply this new product or feature.

As part of taking on and applying the idea of customers’ success being your success, try offering free training. This might be harder for bigger businesses who have a great deal of customers, especially if those customers that have whole teams or departments that would need to be trained, but there are ways around that.

  • Offer training to managers and then have them train their teams
  • Create videos to scale customer partnership. This could get as granular as creating videos for each department if they are using different functions of the feature of product. Then be open to calls and questions on the training.

2. Ask customers what other products or services they would like to see developed

Customer should be using your product or service regularly. Because of this they often have ideas about what would make it better and what other features, products, integrations and services would help their success. By asking them to have input in product development you make them feel like they are a part of the business, not just a buyer. Here customers can start to feel like they are in a partnership with the business and start to share in the desire to better the company.

But no matter what these suggestions are, make sure that customers know their ideas were heard. For instance, when a customer gives you an idea try telling them that you are going to pass this along to your manager. Follow up shortly after with positive feedback. Some responses could be:

  • “That was a great idea. It turns out we are actually developing something quite similar that should be available soon.”
  • “We’ve been discussing developing something like that and it should be in development in the near future. I’m sure your input will help push it forward.”
  • “My manager thought that was a very interesting idea. It is definitely something that will be under discussion for future development. Thank you for thinking of it.”

3. Provide them an easy way to help build the business

Once you have established a foundation for partnership with your customers you can start creating other ways for them to be a part of the company and generate greater revenue. By creating an automated referral program customer can easily help grow the business and revenue. By previously using customer engagement strategies and foundational customer partnership methods you have already proven the value of your product or services to your customers. This means that there is a high likelihood that referrals are already happening naturally. It is just a matter of scaling that process for revenue growth and creating a program that drives a greater number of referrals.

Try using referral software that gives customers the ability to refer using multiple channels that are trackable, including:

  • Social media
  • Email
  • Lead form
  • Verbal referral
  • Shareable URL
  • Printable cards

Through a referral portal customers would also get full visibility into their referrals’ progress and status in real-time to stay engaged with the referral program. To understand the effectiveness of referral software, customer referral data was analyzed in the report, The State of Business Customer Referral Programs. It found on average, customer partnership with referral software provided over 3X (13% conversion rate) higher lead to deal conversion rate when compared to a study done on customer referrals made ad hoc by Salesforce’s Implicit.

4. Have them assist sales in the qualification of referral leads

The power of referrals comes from the relationship that has already formed between the customer and their referral. This means that customers have intimate knowledge of the referrals wants and needs. After a referral is made, sales can reach out to the customer and partner with them to qualify the referral lead. That way a salesperson knows the needs of the referral from first contact and can address them correctly.

Referral software that enables the breaking of lead routing rules also helps to enable the partnership between sales and the customer. This way the customer’s referral gets passed to their salesperson as a way to extend the relationship and trust between that customer and salesperson to include the referral.

This type of sales assistance was showed to increase deals generated from customer referral partnerships by 17 percentage points (30% conversion rate) when compared to the overall conversion rate.

5. Reward customers for bringing in new customers

There is no doubt that customer partnership requires work on the side of the customer to continue to generate leads, qualify them and offer any continual nurturing to the referral. To help reciprocate this effort, a company need to provide added value to the customer. There are many types of referral rewards that do this:

  • Gift cards
  • Bill credits
  • Checks
  • Merchandise

Based on the data from, The State of Business Customer Referral Programs, the majority of customer referral programs (52%) chose to use gift cards to compensate their customer referral partners. These are easy to automate and scale which removes any manual hassle associated with incentives.

To understand the value you should be rewarding put yourself in your customer’s place. On an hourly basis, how much is there time worth? The average reward provided to customers using referral software was $111, but it went up to $2,500. The cost of the product or service being referred should also be taken into account.

The structure of a reward is another consideration. By using a more advanced reward structure like escalating rewards, which increases the reward amount with each successful referral, you can continue to drive referrals and communicate the value of a customers continued partnership.

To see more data on customer referral partnerships download the report, The State of Business Customer Referral Programs.

20 tweetable customer referral program stats

More and more companies are automating their customer referral programs through referral software to grow their lead generation at scale. To understand how these companies referral programs are performing,  20 tweetable stats are provided. These stats come from the data report, The State of Business Customer Referral Programs. The data from this report was based on millions of referrals made on companies’ customer referral programs run on the Amplifinity platform.

The power of referral programs for lead generation

1.

The verbal referral method is used 13% of the time and has the highest conversion rate (32%). Click to Tweet

2.

Lead form referrals are used 23% of the time to refer and have a 19% conversion rate to deals. Click to Tweet

3.

Email is used to refer 24% of the time and has a 17% conversion rate to deals. Click to Tweet

4.

Social media is the most used referral method (29%) but is the least converting (1%). Click to Tweet

5.

Print cards are used to refer less than 1% if time but has a 12% conversion rate to deals. Click to Tweet

6.

The shareable URL referral method is used 12% of the time but only has a 4% conversion rate. Click to Tweet

7.

Customer referrals converted 3x (13%) more than the referral industry standard (3.63%). Click to Tweet

8.

Customer referrals with sales involvement increase deal conversions to 31%. Click to Tweet

9.

61% of customers make 1 referral. 34% make 2-10 referrals. 5% make 11+ referrals. Click to Tweet

10.

Active customers produced an average of 0.87 referral leads/year. Click to Tweet

11.

Customers with previously successful referrals produced an average 2.5 referral leads/year. Click to Tweet

12.

Top 1% of customers making referrals made 22% of referrals resulting in 1% turning into… Click to Tweet

13.

Top 10% of customer making referrals made 54% of referrals resulting in 6% turning into deals. Click to Tweet

14.

52% of customer referrals reward with gift card, 29% checks, 9.5% bill credits and 9.5%… Click to Tweet

15.

52% of referrals reward with gift card, 29% checks, 9.5% bill credits & 9.5% swag. Click to Tweet

16.

6% of referrals with rewards 1,001 - $2,500 converted to deals. Click to Tweet

17.

5% of referrals with rewards $101 - $1,000 converted to deals. Click to Tweet

18.

13% of referrals with rewards $41 - $100 converted to deals. Click to Tweet

19.

The average customer referral reward amount among programs was $111. Click to Tweet

20.

82% of referral rewards were between $41 - $100. Click to Tweet
customer referral program, customer referrals, referral program, referral software

What types of partner referrals are driving new deals? [Infographic]

Companies who have implemented referral partner software to automate partner referrals and incentives are using it to help meet growth objectives by leveraging smaller partners, qualifying potential resellers and continue to get revenue from resellers who can’t transform to a SaaS delivery model. And as more companies start to diversify partner relationships and automate this process it is interesting to investigate not only how partners are using referral programs but the success partners are having with different types of referrals.

The data used here comes from the new benchmarks report, The State of Business Partner Referral Programs. These benchmarks are a result of partner referrals made in business partner referral programs run on the Amplifinity platform.

What type of referral methods are companies providing referral partners?

Out of the six referral methods, the inclusion of these methods are the following:

  • 100% include lead form
  • 50% include email
  • 50% include verbal referral
  • 50% include shareable URL
  • 30% include social media
  • 10% include print cards

It is no surprise that every program included lead forms since this is a common method of lead submission for any type of partner program. But while this insight is a great way to understand how companies are enabling partner referrals, a better indicators of effectiveness of partner referral methods are the actual use of these methods by partners and the relative conversion rates.

What referral methods are referral partners using the most?

It is clear that the inclusion of a referral method in partner referral programs are directly related to use by referral partners. However, looking at how partner referrals are most likely to happen is a data point that gives a great deal of insight into partner preferences and what type of methods should be included in a partner referral program. The following show what referral methods were most used by referral partners:

  • 81% use lead form
  • 13% use social media
  • 3% use verbal
  • 2% use shareable URL
  • 1% use email
  • <1% use print cards

Logically, lead forms are most used as they are included in 100% of partner referral programs. But what becomes interesting is the second most used referral method. Social media comes in second for use even though it was only included in 30% of programs. Verbal, shareable URL and email fall closely together in use but fall far below the use of social media even though they are all offered 20% more than social media. You could say social media is so popular because it is an easy way to directly refer. But if that was the case than shareable URL usage should be higher than social media since it is just as easy to directly refer someone and included in more programs. The difference is that social media can be a general blast out to all contacts without having a specific person in mind. This makes it easier and allows referral partners to continue to refer especially if a partner doesn’t have a specific referral with a need for the company’s product or service. But easy isn’t always better, especially for partner referral programs. When it comes down to it, it is all about the conversions.

Which partner referrals are converting to deal?

Moving from highest use to highest converting, you may notice that two methods are missing from the list – email and social media. These have no conversions. With social media having the second highest usage but no conversions, it proves that general blast don’t work in driving deals from referral partners. This is because when a referral doesn’t include a one-to-one relationship it loses its influential power. To try and correct this, train referral partners on the right way to make referrals and how to make one-to-one referrals through social media.

The following is the rate at which the rest of the partner referral methods converted:

  • Print cards – 67%
  • Lead form – 37%
  • Shareable URL – 21%
  • Verbal – 21%

While print cards have an amazing conversion rate this must be taken relative to use and inclusion. If you remember, print cards were only included in 10% of programs and have less than 1% of use.

Lead forms have a solid and reasonable conversion rate that goes along with the rest of the data. While verbal referrals still have a very good conversion rate it was only used 3% of the time. With verbal referrals now being automated and trackable, I predict that the use will increase in the coming years and therefore the relative conversion rate.

Start visualizing partners’ referral process and discover how to grow partner referral conversions:

New data: The referral incentives that customers find irresistible [Infographic]

Customers have the ability to drive the stickiest and highest quality leads. But customers have a lot going on on a day-to-day basis. So how are companies keeping each customer’s head in the referral game? They are providing irresistible referral incentives that motivate customers to dominate the referral play. This make understanding the type of referral incentives that drive success vital to your referral strategy.

By analyzing current companies’ customer referral incentive practices including the type of referral incentives offered, the average amounts, and the highest converting amounts, benchmarks were created to inform customer referral incentive practices and measure against.

The referral incentive data sighted here comes from the new data report, The State of Business Customer Referral Programs. These benchmarks are a result of millions of customer referrals made in business customer referral programs run on Amplifinity’s referral software.

What type of incentives are companies offering customers?

One of the hardest parts of managing successful referral program is determining what type of reward will motivate advocates to take that leap and refer. And while many who start a referral program want to start small with merchandise, the data shows that cash is still king with:

  • 52% offering gift cards
  • 29% offering check
  • 5% offering bill credit
  • 5% offering merchandise

The majority of companies that used gift cards utilized them digitally. Checks, which came in second, were normally used when customer referral programs had variable reward amounts or offered a percentage of revenue.

But you may ask that if cash is king why did bill credit tie for last place with merchandise? Both bill credit and merchandise place an extra burden on the business to fulfill. Gift cards and checks can be automated so the burden is taken off the business. These are also both monetary rewards that go straight back to the customer for them to use at their own discretion as opposed to bill credits which can be easily overlooked on a statement.

What is the average amount of referral incentives companies are offering?

Once the type of incentive is established it’s time to dive into the incentive amount. The amount of the referral incentive companies were offering ranged from $20 to $2,500 with:

  • 82% offering $41 – $100
  • 2% offering $20 – $40
  • 2% offering $101 – $1,000
  • 4% offering $1,001 – $2,500

The overall average reward amount was $111. While $111 can be considered high for a referral payment when compared to the common cost per acquisition of a new customer it is actually quite budget friendly.  Looking at the 82% majority who offered $41 – $100 it might be deceptive that many are offering the lower end of the spectrum but most were much closer to $100 than $41.

 What referral incentive amounts are most successful?

While it is always good to see the types and amounts of referral incentives other companies are offering, it means very little unless you can see the success of these incentives. The conversion rate of incentive amounts from leads to deal was:

  • 13% for $41 – $100
  • 9% for $20 – $40
  • 6% for $1,001 – $2,500
  • 5% for $101 – $1,000

When looking at these conversion rates, the question is that if incentives are such an import part of generating customer referrals than why do the higher incentives have lower conversion rates? The reason behind this is that larger deals require more work and are more highly rewarded but due to the nature of a larger deal they consequently have a lower success rate even when more profitable than smaller deals. This data doesn’t show that lower reward will get you better result, but that the referral incentives need to be in proportion to the size of the deal and the amount of work it will take.

Start visualizing how to offer motivating customer referral incentives that dominate the referral game:

referral incentives. customer referral program ideas, referral rewards

8 benchmarks for creating a successful customer referral program [Inforgraphic]

We always hear how customer referral programs have grown in implementation as a result of their undeniable ability to generate quality leads that convert to new customers. But even though referral programs might appear to be wildly successful compared to your different lead generation programs, finding out how it compares to other successful customer referral programs is often more telling. This useful insight helps to understand where extra attention needs to be paid in order to optimize for success.

The eight benchmarks mentioned here comes from the new data report, The State of Business Customer Referral Programs. These benchmarks are a result of millions of customer referrals made in business customer referral programs run on Amplifinity’s referral software.

What is the average activity that can be expected from a customer referral program?

Activity is a very important metric to understand. Customer referral activity is the foundation of a successful referral program. This is what the first benchmark is focused on.

1. During the course of a year, it was discovered that 36% of customer enrolled were actively referring.

This means that 64% were inactive. Why were they inactive? A lot can depend on when a customer was enrolled. If they were enrolled in a previous year, made a referral, but where not successful they are often deterred from referring again.

To overcome this try having sales or customer success reach out and engage inactive advocates to train them on how to refer and the right type of person to refer in order to keep them engaged in the referral program.

How many referrals can a customer be expected to generate?

Once the percentage of active customers is discovered, how are those customer behaving?

2. On average:

  • 61% of customers will make 1 referral
  • 34% of customers will make 2-10 referrals
  • 5% of customers will make 11+ referrals

To try an increase the number of referrals coming from customer advocates, provide a special offer or an increase in reward with each successful referral. Driving multiple referrals from a single advocate becomes even more important when looking at the next benchmark.

3. The data found that on average over a year period a customer produced 0.87 referral leads.

This means that if a customer referral program had 1,000 advocate they would produce 870 referral leads.

However, compare this to customers who previously referred a qualified referral lead.

4. These previously successful customers produced an average of 2.5 referral leads per year.

To drive more referral leads from previously successful customers, identify these customers and have sales reach out to thank them and encourage their productivity.

How many deals are generated from customer referrals?

Now getting to the main event – the conversion rate. The average referral lead to deal conversion rate from customer referral program run on the Amplifinity referral platform was 3x greater than the industry average of 3.64%, according to Salesforce’s Implisit.

5. The average conversion rate of referral leads that turned into customers from all programs was 13%.

While this conversion rate is spectacular, it becomes even more phenomenal when looking at customer referral programs that had sales involved.

6. Customer referral programs that had sales teams play a role in recruiting customers to become advocates as well as regularly asking for referrals had a 30% conversion rate.

This conversion rate has a 17 percentage point increase over the average. To help facilitate this try training sales on when and how to ask for referrals and break standard lead routing rules. This would allow the salesperson who ‘owns’ the customer to have their referral leads routed to them and incentivizes sales to form stronger relationships with customers to increase the quantity and quality of referrals.

How do the quality of referrals compare to the quantity?

So you now know that it is important to drive a higher quantity of referral leads. But the quantity of referral leads needs to be balanced with quality. For instance, a customer advocate could easily refer daily by sending a blast referral out to their social network. And while this could look great if you are just looking at quantity of referrals made, when aligned with the percentage that turned into deals you will be sorely disappointed.

7. In a year, the top 1% of customer advocates by volume of referrals, made 22% of overall referrals which only resulted in 1% of deals.

This falls extremely short of the average conversion of 13%, not to mention the 30% conversion of referrals when sales is involved.

But what about the top 10%?

8. The top 10% of customer advocates by volume of referrals, made 54% of referrals, which only resulted in 6% of deals.

Unfortunately, when an advocate just focuses on the quantity of referrals they often sacrifice quality. General social blast lose the one-to-one connection that make referrals so powerful.

Luckily there is a way to combat this. Try coaching enthusiastic customers on what makes a successful referral. They will appreciate the guidance and the reward that comes from referring more qualified leads.

Start visualizing customers referral results and discover how to manufacture successful referrals:

referral software, referral program software, customer referral program

Which referral methods are generating new customers? [Infographic]

Referral software has significantly grown in adoption by businesses in an effort to amplify the good results companies already receive from more manual referral campaigns and programs. Because of this, more data than ever before is available to see not only how businesses automating referral programs are going about engaging customers to refer, but how customers are using these programs and the success different referral methods provide business customer referral programs. By analyzing this data, companies can better understand how customers interact with referral programs to turn referral marketing into a science.

The data used here comes from the new benchmarks report, The State of Business Customer Referral Programs. These benchmarks are a result of millions of referrals made in business customer referral programs run on the Amplifinity platform.

What type of referral methods are companies offering customers?

Out of the six referral methods, the inclusion of these methods are the following:

  • 77.2% include lead form
  • 72.7% include email
  • 44.4% include verbal referral
  • 50% include social media
  • 40.9% include shareable URL
  • 18.2% include print cards

Breaking down social media, it might be surprising to see that LinkedIn isn’t the most offered form of social media. Facebook, Twitter, and LinkedIn inclusion rate are as follows:

  • Facebook – 50.5%
  • Twitter – 27.3%
  • LinkedIn – 13.6%

You’ll also notice that not one method is included in all the customer referral programs in the study. To better understand what types of methods to offer try surveying customers to determine how they connect with their network.

Lastly, the best indicator of which referral methods to include is the effectiveness of those methods. Which methods are your customers using the most and which are the most successful? As you’ll see here, these two ways to judge effectiveness don’t always line up.

What referral methods are customers using the most?

It is plain to see that the methods customers use to refer is directly correlated with what referral methods a company offers. But looking at what method customers gravitate toward can still give you a great deal of insight. The following show what referral methods were most used by customers:

  • Social media – 29%
  • Email – 24%
  • Lead form – 23%
  • Verbal – 13%
  • Shareable URL – 12%
  • Print cards – <1%

It is impressive that social media is the most used even though it is only included in 50% of customer referral programs. Email and lead form follow shortly after, but their inclusion rate in the programs were more than 20% higher. This order of popularity could be based off the level of familiarity and comfort a customer has with the methods provided and also how easy the referral is to make. But one thing to remember is easy isn’t always better. The use of referral methods really isn’t a popularity contest . . . it’s a conversion contest.

What referral methods are converting referral leads?

When transitioning from looking at the most popular to the highest converting referral methods, only lead form, email and shareable URL come close to where they ranked in use. The following is the rate at which each referral method converted:

  • Verbal referral – 32%
  • Lead form – 19%
  • Email – 17%
  • Print Cards – 12%
  • Shareable URL – 4%
  • Social media – 1%

One point you’ll immediately notice is that while social media came in first in use, it came in last in generating new customers with only a 1% conversion rate.

The data points to top converting referral methods having a one-to-one relationship instead of a one to many. The discrepancy between the use of social media to refer and its conversion rate can be due to the fact that it is being used as a generalized blast in social networks as opposed to referring a specific peer that is in need of the product or service. While this is good to build awareness it won’t generate new customers.

To combat it, try training customers on how to refer one-to-one on social media or explain the best use of the referral program to them.

Start visualizing customers’ referral process and discover the science behind referrals: