How to measure against new customer referral program benchmarks

Impactful, strategy-changing customer engagement and referral program data just hit the market this past week. This data comes from the release of the new report, The State of Business Customer Referral Programs, and the webinar, Customers: Your most important source of demand, with Lisa Nakano, Service Director Customer Engagement Strategies at SiriusDecisions. In the webinar Lisa discussed how customers need to be leveraged to impact demand via advocacy and referrals.

Based on that claim, it is interesting to investigate how customer referral programs are performing this crucial task and the success rate of referrals by companies running customer referral programs. This includes:

What is the average customer referral activity a company can expect?

In the recent study done by Amplifinity based on millions of referrals made by business customers on the Amplifinity platform during the course of a year, it was determined that on average only 36% of customers are actively referring throughout the year.  On average this was 2,106 customers making referrals out of the average enrolled in the referral program, 5,850.

customer engagement, referrals, customer referrals

While the 36% may seem low, it is important to understand that this data is over the course of year, not the lifetime of the customer. That means that this percentage can also be attributed to how long customers have been enrolled in a program. Bottom line, there are a lot of willing customer advocates that need to be reengaged with to keep them active.

How high-quality are the leads that come from customer advocates?

Many times companies assume the easier the referral method, the more a customer advocate will engage within a referral program and the more new customers will be generated. This assumption isn’t necessarily true. Here is how the different types of referral methods rank in popularity.

Most Commonly Used Referral Methods

As the chart illustrated, social media is the most used referral method even though it is was discovered that only 50% of referral programs offer it in the study. However, a referral from social media converted from lead to new customer less than 1% of the time. While referring in social media can be easy, this study showed that for business customers, a broad social blast doesn’t work for referrals. This is most likely because these aren’t one-to-one direct referrals from a trusted source. Therefore, while this type of referral is good to build awareness, it loses its power to generate demand.

The importance of that one-to-one interaction is further expanded on by Lisa Nakano when analyzing ADP’s demand generation tactics.  In the webinar, Customers: Your most important source of demand, Lisa explains how many companies today have challenges with demand generation, because no matter how many times they email prospects or create targeted nurture campaigns their prospects only trusted what their peers tell them. To combat this Lisa told listeners ADP’s solution, “They [ADP] turned to Amplifinity as their partner and used referral marketing to bring in the positive word-of-mouth and activity to feed demand.”

Looking at the opposite spectrum from social media, the verbal referral method was only used 13% of the time but was the top source of conversion with 32% of referral leads converting to new customers. It also had a higher inclusion rate in customer referral programs, coming in at 54.4%.

Trisha Winter, CMO of Amplifinity predicts the continual rise of inclusion and use of verbal referrals, “Even though verbal referrals is fourth in overall use, this is a fast growing referral method thanks to new referral program technology introduced in 2016 that allows referrals to be captured from sales and customer success via Salesforce CRM. We predict verbal referrals will climb in adoption and usage in 2017.”

A large reason for verbal referrals having such a high conversion rate besides it being a one-to-one referral is that this method includes sales which increase conversions significantly. But more on that later.

What impacts referral program conversion rates?

The success of referrals has come a long way. Previous to the study done by Amplifinity, a B-to-B referral industry standard conversion rate of 3.63% was established by Salesforces’ Implisit. But the management and automation of a customer referral program has brought industry conversion rates to a whole new level. On average, customer referrals made on the Amplifinity referral platform had a 13% conversion rate.

This is over 3x the referral industry standard determined by the Implisit study. This drastic increase in the success of referrals can be attributed to establishing referrals as a channel for demand generation as opposed to an ad hoc campaign.  By automating programs to collect referrals at scale, companies are able to remove breakage and operational hassle so marketers can refocus their efforts on the promotion and optimization of the program.

Lisa Nakano commented on ADP’s referral conversion rate, saying “They [ADP] had some very nice results with this once they started understanding what they needed to do to activate their advocacy community. Referrals became their number one source of new demand. The conversion was amazing in terms of how quickly folks worked their way through the funnel and the percentage that converted.”

How does enabling referral selling change the referral conversion rate?

The Amplifinity report showed that enabling referral selling produced even better results. On average, a referral program that enabled sales to actively recruit new customers to the program, generate referrals from customers, qualify referrals through customers, and receive a facilitated introduction from customers more than doubled the average conversion rate. In fact, referral selling increased the average conversion rate by 17 percentage points, with a 30% average conversion rate.

This helps explain why verbal referrals were the highest converting method as it is a referral method enabled by sales.

The increase in conversions that referral selling delivers is a result of it being a further extension of the one-to-one referral. By enabling referral selling and breaking lead routing rules the trust that exists between the customer and their referral, and the customer and their salesperson can also be used to connect the customer advocate’s referral to their trusted salesperson. This way, any referral from the customer advocate will be automatically sent to that customer’s salesperson.

As an example of how the power referral sales enablement can contribute to demand generation, Trisha Winter pointed to ADP, saying, “ADP has stated they have higher customer satisfaction/NPS scores for customers who are advocates with them making referrals. Because they break lead routing rules, this naturally incentivizes sales to work on that relationship with that customer and have really great engagement.”

For more information on referral selling and another take on the Amplifinity data, read the article The Best Way to Ask Your Customers for Referrals, by Mike Garrison, an expert in training sales on how to increase ROI through referral selling,

How rewarding are referral incentives to customers?

There has always been much debate over incentivizing referrals. For the most part, everyone now understands that the effort a customer puts into making the referral and following up on the referral, whether that is by helping sales qualify them or making an introduction, needs to be compensated like any type of work. The question now is, what reward amount should be offered to customers that is enough to incentivize them but isn’t prohibitive to the ROI?

Looking at the data, reward payments for the customer programs ranged from $20 – $2,500. The data was analyzed based on actual reward payments since many programs have varying reward amounts by product purchased or offer a percentage of revenue.

Overall, the most popular and most successful reward was between $41 – $100. But you shouldn’t take this to mean that a reward amount of $41 will drive referral success. In fact, the vast majority of these rewards were $100. While the overall average reward amount for customer referral programs came in at $111.

While this data might mean to some that they can provide a lower reward amount and still get results, that isn’t quite the case. Rewards must be provided to customer advocates not only as compensation for the amount of work they put into the referral but also based on the cost they are asking their referrals to spend. As the cost for a referral to buy goes up, there is more often greater success with a revenue sharing system, like Lisa Nakano talks about ADP in the webinar. While the data may show the success rate as lower for rewards above $100, that can be attributed to the natural decrease in the conversion rate of any higher priced service or product.

For another take on this new referral reward data read, Successful Referral Programs Offer Escalating Incentives to Drive Customer Engagement, by Loyalty360.

Download the full report to see more data on business customer referral programs including:

  • All the referral methods from frequency of inclusion to conversion
  • The success of higher reward amounts
  • How many referrals you can expect from each customer over a year
  • The success rate of the top 1% of advocates
  • And more

referral program, customer referral program, referral software

How to adapt to a more complex B2B buyer journey

The B2B buyer environment is more complex than ever before. Unlike marketing in the past, the digital ecosystem changes so fast that marketers and salespeople can barely make one pivot before another one is required. Luckily there is still a channel that greatly impacts the B2B buyer and lets marketers enable their journey – peers . But why have peers become so highly prized over other channels?

Even though we continue to point to digitization as the reason for the perpetual B2B buyer development, it is but the catalyst. As marketers tried to adopt new digitized strategies the ecosystems became increasingly crowded and the tactics become more aggressive as companies fought for mindshare. Buyers were being flooded with misleading content and bias information. Google and other content hubs saw the declining user experience and realized if they wished to continue to be a credible source of information there would need to be some changes. Consequently:

  • Link buying got banned
  • Third party content sites created restriction on linking to product pages or a homepage
  • PPC quality scores came into effect
  • Google PPC banned words for being misleading/spam
  • Ad blocker
  • Social ads being labeled as sponsored
  • Paid brand content got labeled as sponsored
  • Wikipedia started requiring the citation of sources and non-bias information

With search engines like Google and content hubs putting more restrictions on marketers’ ability to make an impact digitally, it sends a clear message – user experience is now more important than selling and filling the funnel.  Marketing is now in the age of the buyer journey, and building trust with peer referrals has a big impact on it.

The new B2B buyer journey

In 1882 Nietchzsche proclaimed “God is dead.” In 2017 marketers are proclaiming, “Leads are dead.” Both were never meant to be taken literally but rather the idea we once held dear was no more. But what has caused this figurative death?

Buyers have so many different touchpoints involved in their research that the traditional campaign method of serving up an offer and expecting it to illicit the desired response isn’t practical or profitable anymore. Logically at some point a campaign will hit an intended target. But there is a reason that prospecting, ppc, and social media has decreased in effectiveness when done as an individual campaign. Most of the time campaigns  won’t resonate with the B2B buyer because it doesn’t represent where they are in buying journey. It isn’t about filling the funnel with leads anymore but guiding buyers through their buyer journey. In the Forrester blog, Myth Busting 101: Insights Into The B2B Buyer Journey, it shows a chart of the many different contact points that impact the decisions of the buyer journey.

The arrows show just one path a B2B buyer can take among many. Within each point on the buyers’ journey the B2B buyer use multiple channels, and peers or referrals are a big part of it (light blue squares). Zooming in, you will notice that peers are but one of three channels that will build trust with the B2B buyer. This makes it a very important channel to enable.

However, while this chart shows how influence is dispersed it doesn’t tell us how to optimally impact each touchpoint at each stage. That’s because you can’t enable every full buyer journey with so many different variations of buyer stages and channels involved. For instance, a buyer could go Hear, Learn,  Research, Trust and Decide most of the time but than an outlier could have a totally different path .  All you can do is identify  the most likely path of your B2B buyer and enable the channels that inform that journey.

But what channel can most influences the B2B buyer? Analysts and industry leaders say peers.

In the report Be Informed to Connect with B2B Buyers, “Interviewees told Forrester that they want to talk to ‘consultants’ who know their business—at their convenience and with less pressure to sign on the dotted line.” These usually mean peers that can help inform the buyer on the ins and outs of the product or service.

Buyers want to have their peers involved in the buying experience. It has been found that an average 6.8 people are involved in each buying decision (Harvard Business review). While this may often be perceived as people within the organization this usually involves at least one person outside of it (a peer) who is giving a referral and speaking for the service or product’s capabilities.

The new B2B buyer requires a new channel strategy – peer referrals

Peers are an integral part of the b2b buying process. In the Forrester Webinar, Today’s Path to Purchase and the Changing B2B Tech Buyer, analysts name peers as the highest source that influences business decision makers (BDM) in the discovery stage and the second highest source that influence B2B tech decision makers (TDM). For most, BDM are the intended target as TDM are more focused on the IT side.

Moving onto the exploration phase, Forrester found that peers still have the highest influence on BDMs and an above average influence on TDMs. This is where peer referrals done in conjuncture with sales can have a tremendous impact on the B2B buying process.

Taking advantage of this insight, enterprise companies like ADP, Citrix, and RingCentral established an automated referral program to scale peer referrals and increase the influence of the peer on the deal. As shown in the chart demonstrating the many paths of the buyer journey, peer referrals are no longer just a strategy or campaign but a channel that impacts every portion of the buyer journey. This is because peers are one of the main staples of building trust with the b2b buyers. In fact,  at the 2016 SiriusDecisions summit, referrals were named as ADP’s top source of demand creation.

While it is impossible to be up front and center at every contact point in the buyer journey, it is possible to win top mindshare with the most influential touchpoints. If peers are your priority, discover how referral program software can help evaluate some of that pressure with automation. And to get your personal referral program ROI, try the free ROI calculator now!

How FinTech lenders can disrupt the banking disruptors with referral marketing

Why are FinTech companies turning to a scalable referral marketing program? It’s no secret that business in general is changing fast for the financial industry and FinTech (financial technology) is no exception.  While FinTech companies (like Lending Club, CommonBond and Kabbage) originally focused on stealing small and medium sized businesses (SMB) away from big bank lending, the amount of underwriting big banks require for each loan does not give SMB loans the appealing return on equity (ROE) it once did. Therefore, it’s no surprise that many have decided to step back from smaller SMB loans.

So what does this mean?

It means that while FinTech lenders are out running some of the traditional financial institutions they now need a newer and better way to disrupt the alternative lending world. That’s right. They need to disrupt the disruptor.

After all, even though some of the competition is being reduced in the big bank world, it doesn’t mean that the large number of FinTech lenders have stopped growing or getting any less determined.

But how do you disrupt the disruptors?

FinTech lenders need a highly charged customer acquisition channel. But even though many of the big banks may not be FinTech lenders’ biggest competition any more they have had years to establish SEO keywords and PPC. Which means that it will be very hard if not nearly impossible to surpass them in organic search or PPC. In fact many of the traditional channels have such a high volume of traffic already and have been mined so thoroughly that it is very difficult to make a real mark with them.

Instead, when trying to create a powerful channel for customer acquisition focus on 3 keys in order to break through the noise of your competitors.

  1. Establish a proprietary channel
  2. Ensure your channel is data-rich
  3. Confirm that your channel integrates with your current technology

One such channel that covers these 3 bases and empowers customer acquisitions is referral marketing.  Automated referral marketing software gives FinTech lenders the ability to optimize customer acquisition along with taking on other challenges in addition to finding new lenders and borrowers. This includes conquering 2 main obstacles that face FinTech lenders.

  1. Become more efficient through automation, to scale the business and increase revenue
  2. Delivering a superior customer experience

Automated referral marketing programs do this by incentivizing Advocates to make a trusted introduction to their peers and have therefore been proven to:

  • Convert leads 4X better than traditional marketing (emarketer)
  • Decrease churn by 18% compared to non-referred customers (Harvard Business Review)
  • Increase LTV by 16% compared to non-referred customers (Harvard Business Review)
  • Have a conversion rate of 36% from referral to new customer for a financial service company (Amplifinity Financial Service case study)

And for FinTech lenders, there is more than one way to take advantage of referral marketing programs. Along with the traditional customer referral marketing program, a partner referral marketing program can prove to be very advantageous for FinTech lenders. Since as previously stated, many big banks no longer find it worthwhile to pursue SMB loans and small personal loans, they are primed to become a partner. A scalable automated partner referral marketing program enables FinTech lenders to take advantage and leverage financial institutions to refer lenders and borrowers that don’t meet their qualification but would fit securely into a FinTech marketplace lender’s preferred demographic.

But what would motivate bigger financial institutions to refer? Bigger banks and finance companies have long been trying to improve customer engagement and experience. Referring leads to a FinTech lender would appeal to a financial institutions since it would provide them with a way to give customers and prospects a more full service offering that improves their image and meets a wider group of customer and prospect needs. In addition, FinTech marketplace lenders can provide referrals back to partners and offer an incentive if a bank or financial institution’s referral becomes new business.

With the right channel, a FinTech marketplace lender can be a disruptor among the disruptors. Discover what your ROI could be from both a customer and partner referral marketing program with the ROI calculator today!

ROI Calculator

How to optimize your referral marketing program messaging

Trying to understand what referral marketing program messaging will prompt your advocates into action can be frustrating, confusing, and even contradictory. But optimizing your message for your audience is important. Look at the great American novelist, William Faulkner. Faulkner never wrote for his audience. In fact, in one of his most well-known novels, The Sound and the Fury, he took on the first person persona of a mentally disabled man who had no sense of time. The first sentence was three pages long and gives the reader an instant headache trying to understand it. Now, it’s mostly only read by professors and their ill-fated students.

But the reason behind Faulkner’s foolish, frustrating and frazzling writing still applies to referral marketing messaging today. Faulkner was trying to have his writing structure communicate the feeling of the character. And trust me when I say by the end of the novel I did feel confused, unable to understand anything, and convinced that years had passed since starting the novel. But for a brand this means communicating enthusiasm and excitement.

So how can Faulkner’s many lessons be applied to optimizing your referral marketing program? In four ways.

4 referral marketing program messaging lessons from William Faulkner

1. Make your message unique but not too unique

Faulkner reason for his outrageous writing style was based on his determination to breakaway from tradition and deliver a new kind of novel. Breaking away from tradition and providing a fresh message is something we all strive to do. For the last decade the digital world has been in constant flux. This has resulted in a continual redefining of the status-quo and how we communicate with customers and buyers . But everything has its limits.

I have seen referral emails and registration pages make a message too unique to the point where it becomes confusing. As we learned from Faulkner, that won’t get you engagement. Always choose clarity over trendiness and uncommon word play.

But if you still crave a one-of-a-kind display, try creating unique graphics and images to add in. An example of this is ADP. ADP did a great job at creating unique but specific images that communicate what they want advocates to do.

2. Testing referral marketing program messaging might be your best friend

Obviously, focus groups and message testing weren’t exactly around in Faulkners day, otherwise he might have gone in a different direction with his writing. But like how the scientific method is a necessary part of discovery for science, testing your messaging is prudent for anyone with a referral marketing program. The message testing process is similar to the process of the scientific method:

  • Research your customer or partner personas
  • Construct two different messages
  • Display one version for specific period of time and then display the other
  • Analyze data
  • Ask if either message resonates with the majority of customers or partners
  • If the answer is no start again
  • If the answer is yes apply that one to your referral marketing program

This process allows you to figure out what prompts the most engagement from customers, partners, and current advocates. There are many different parts of referral marketing program messaging that you can test, but if you need to narrow the list down I would suggest focusing on:

  • Advocate invitation email
  • Referral program promotional email
  • Registration page

Once those emails and that page are optimized you can move onto other pages and emails. Also, be clear about measuring your email results. While opening an email is all well and good, if they don’t click through to the registration page and actually register for the program than your messaging needs to be optimized further. At that point try switching out the email and registration page with different versions to see if performance picks up.

3. Know your audience is necessary

Faulkner never thought about what his readers wanted, only what he wanted them to get from his novel. That was a big mistake. Who you are targeting is a main definer of your messaging. For instance, targeting a business customer is very different than targeting a consumer. While targeting a referral partner is different than targeting a business customer. For optimal results no program should combine these three but instead have different referral marketing programs and messages that speaks to the specific demographic.

When looking deeper into business customers, make sure you use similar language to what they are used to. For one, they need to feel like this program is for them. Business customers have less time than consumers and so a pointed message with familiar language is key. The faster you get the value and process across to them and the easier it looks, the more likely they will be to register and refer.

As for referral partners, the partner ecosystem is large and there are a lot of different terms that describe referral partners. Make sure that you use your partners’ industry term to describe them. For instance, telecoms use the term agent program more frequently than referral partner program even though it describes an identical relationships.

The same go for rewards. Don’t feel like you need to communicate the fine print of your rewards to advocates at first. Just make sure that the rewards you’re communicating to advocates are based off what they find valuable.

Business customers have a lot more involvement in helping sell the referral compared to consumers. This means a higher reward is often necessary. While referral partners are putting their relationship with customers on the line so there incentives are often based off a percentage of the sale. Make sure you emphasize the value you are offering by putting it at the forefront of your messaging to customers and partners.

4. Short and sweet is better than long and descriptive

Like the readers of The Sound and the Fury, customers are impatient. Tony Haile, CEO of Chartbeat, found that visitors stay on a page for only 15 seconds while a recent psychological study found that after eight seconds their full attention dimensions significantly. Keeping your first referral program promotional email and the registration page short and sweet with a clear value proposition is necessary to capture their interest in such a short period of time.

After a customer registers for the referral program you can go into more detail about the types of referrals that payoff and the reward fine print.

Another strategies is relying more heavily on images and graphics. A customized image can be worth 1,000 words without overwhelming your customers or partners. People process images much faster than words.

RingCentral took that idea and applied it to their referral marketing program to create a great message.

RingCentral referral marketing program

 

They also wanted to be very clear about what type referral led to each reward. But instead of writing long chunky paragraphs they created a graphic with minimal text and with a layout that is easy to scan and understand.

Referral rewards for RingCentral

Do you want to learn more tips and tricks for optimizing your referral program? Check out our resource page. And if you are looking to zero in on optimizing your reward for your specific demographic, discover how different reward equations and presentations can get you the result your looking for.

how to calculate referral incentive

Why referral partners will overtake resellers

There are lot of opportunities in the partner realm. With resellers and referral partners (agents) opening up new channels to reach target industries, companies are able to expand their selling power. But not every partner channel is an easy approach to take.  There are many factors that play a role in a business wanting to become a reseller or a referral partner and the company/vendor benefit that will result from this relationship.

Consider that each vendor has to factor in the costs of building a reseller channel. There is a high cost associated with training, certification and just to get the attention of the reseller and their sales team. In regards to training, sales and the rest of the team need to understand how to operate the product, the terminology needed to sell it and receive the in-depth knowledge to understand how to provide support and service. With all the training that has to happen there is inevitably a long period of time where nothing is being sold. And then, when an update occurs or new features are added, another round of training must occur. And once a reseller is fully trained, they likely have multiple products in their sales bag, so then it transitions to a struggle to get focus on selling the vendor’s product.

So what does this mean for the vendors? The amount of onboarding effort necessary for both vendors and reseller partners often jeopardizes the partnerships and the success of partner programs. According to the Ryan Morris, principal consultant at Morris Management Partners, prolonged onboarding cycles, program false starts, and ultimately a high rate of partner churn are often a consequence of the necessary burden involved in preparing reseller partners to bring your product to market.

An alternative approach to resellers is to establish a channel of referral partners. As opposed to resellers, training referral partners is a breath of fresh air. While they need to understand the value proposition, ideal user, and features to know if their referral is a fit, they don’t need much more. They aren’t trying to sell the product directly, just make a trusted and highly valued introduction to a company that offers their peer or customer greater value. This way the brand messaging, selling, and post customer engagement is owned by the brand which allows the company to give customers an authentic experience. In addition, partners can get a commission without any of the headache (or financial ache).

Here are some tips and tricks to enable referral partners and make them (and you) successful.

5 ways to enable successful channel partner referrals

1. Make sure your program supports the specific type of referral partners

One big part of referral partner success is how you go about enabling that partnership. The major determination for this is the kind of partners you are enabling with a referral program. For instance:

  • Do you have a bunch of small partners or bronze level partners (individual partners, agents or small business) that have access to your target buyers in their constituency and can influence them? This only requires an automated referral program that can easily scale the referral partner channel and is available for those partners to register, refer, track their progress, and get rewarded.

 

  • Do you have managed partners or silver level partners that need to enable their sales team to refer customers they interact with and that match your target customer? These require more complex referral partner programs as they need to have two tiers of management (company manages the partner and partner manages individual sales advocates and their activities) in order to provide unique rewarding and reporting by partner.

 

  • Do you have a high performing large partner or gold level partner program? This is usually a single large partner. This partner’s productivity is so high, a dedicated, co-branded referral partner program is created for them that is highly efficient at generating leads.

Ensure that your referral partner programs aligns with the type of partnership you want to create. The different features in these types of programs can enable substantial growth of referral partners and success of their referrals.

2. Training is a powerful tool

As demonstrated above, training is still an important part of the referral partnership. Since the partner doesn’t need to demo the product or sell it directly, they don’t need to go through the highly intensive training and onboarding typically reserved for resellers which tends to slow down the training process and increase expenditures.

To train partners, think about what knowledge they will need in order to communicate the value proposition of your product succinctly. To help facilitate this, offer resources like:

  • Monthly email updates on product innovation or service improvements
  • Video or documents that gives partners a talk track on how to present the product
  • Details on what makes a lead qualified
  • Introduction and walk through on the referral partner software
  • The types of pains the product solves for

Of course, for a tiered referral program, either the company or the partner will also have to take this training and communicate it to their sales team. The partner may add on certain materials to present their sales team which could include specific incentive levels that align with the unique values of each successful referrals.

And in regards to a dedicated partner, they will most likely have themselves aligned with your value proposition, but providing the generalized information above could always help.

3. Make referring easy and trackable by partners

The complicated onboarding that is associated with the reseller model is part of what makes reseller churn an issue. Learning your lesson from that, make partner referrals as easy as possible.

Try giving partners a variety of trackable referral methods which will allow them to adapt their referral method to the type of interactions they are having. This includes:

  • Suggest a lead form
  • A way to collect verbal referrals
  • Email sharing
  • Social media sharing
  • Shareable urls
  • Printed cards

While suggesting a lead will most likely be the most popular since it doesn’t require the referral to do any work, it is always a good idea to provide options. For instance, if a partners contact is more comfortable with another form of referral they can have the option of using it.

Another important aspect of referral partner engagement is allowing referral partners to check the status of their referrals and know how they are progressing. You don’t want partners calling you up all the time to try and figure out if their referral became a customer.

Make sure your referral partners can easily access information about their referrals in the program. Try automating notifications when a referral status changes to alert the partner if there referral is moving forward or successful or was unsuccessful.

4. Offer incentives that partners find valuable

Determining the incentive that your partners are most motivated by can be difficult. You have to take into account the effort they put in and how deep the relationship is with a certain partner. If you have multiple managed partners, the reward should be able to be automated and managed per partner so partners that are considered more valuable contributors can be treated as such.

When Citrix was deciding on how to incentivize managed partners, they did a number of studies on what competitors in their space where doing and that is how they landed on offering 20% of the annual value of the deal. However, Citrix uses an escalating reward structure as partners mature in order to reward low performers, mid-performers, and high performers in a way that will motivate higher numbers of referrals from a single partner. Automating an escalating reward structure for partners is a good way to incentives and scale a referral partner program.

5. Keep it top of mind

Promotions aren’t only for customer. You always want to make sure that your referral partner program is kept at the forefront of partners minds. For a dedicated referral partner this could be easy. But it is still good to reach out every quarter or so and offer helpful tips or remind partners of the chance to escalate their incentive with more referrals.

For individual partners, you might want to reach out by email or by phone more often in order to keep engagement up. These partners most likely have other companies they are working with and further nurturing is required to keep them sending leads.

Do you want to learn more about how to optimize referral partner engagement? Listen to what Randy Fahrbach, Senior Manager of GoTo Channel Development at Citrix/GoToMeeting suggests as he walks through his experience of automating his managed partners with a referral program.

Referral partner program ideas from Citrix. Headshots of Randy Fahrback and Larry Angeli.

How to create engaging B2B referral emails

As the saying goes, you never know unless you ask. But when trying to generate referrals and motivate customers to register for your B2B referral program, you’ll never know unless your referral emails asks correctly. While prospecting emails for lead generation continue to decrease in effectiveness with the increasing saturation of the email channel , email is still the most desirable way for a company to communicate with a B2B customer. . . if done in an engaging way.  The success of email communication to customers is a result of B2B customers already having a relationship with the company, along with email being the easiest way to communicate information without taking up their time (after all time is money for a B2B customer).

So what does this mean for your referral emails?

Well for one, it is vital to have referral emails not only at launch, but throughout the different stages of the referral program to start and keep B2B customers engaged and referring. You could have the greatest referral program in the world but if no one knows about the referral program it won’t become the fantastic lead generation channel you are trying to make it.

And two, referral emails needs to be done in a way that maximizes your B2B advocates time while communicating value. A 2015 study found that recipients decide whether to open an email in zero to three seconds after seeing it. But even after opening your referral emails how can you create a message that prompts customers to read and click-through?

5 Referral email do’s and don’ts

1. Keep referral emails short and sweet

Companies are constantly trying to get across multiple messages and make large amounts of information resonate with customers. But this doesn’t mean that customers have the time, patience, or interest in reading it. I have seen brands wondering why they aren’t getting click-throughs after sending out promotional referral emails that are over five paragraphs long. The fact is, psychologist have found that adults have less than an eight second attention span. That eight seconds includes someone having to read, process, and make a decision about your email. This means that most of the time we are scanning emails and articles.

To make your promotional referral emails readable and attractive, have the hero image text call out the referral benefit, aka, the reward. If you’re offering a reward to your advocates and the referral, make that evident. By making a double sided reward (rewarding both the advocate and referral) visible it removes barriers to refer by giving the advocate something extra to offer their referral.

An example of the language you could use is:

Introducing, the (Brand) referral program

Enjoy $100 for each success referral!

OR

Refer. Success. Reward

Refer and get $100 for you and your referral

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This can then be followed up by a small paragraph going into basic details about the referral program. The faster you can get across the benefits to the customer and their referral, the more likely you are to have them click through to register. These promotional emails aren’t meant to contain the micro details about your ideal referral or every feature in the referral program. A basic overview and an emphasis on benefits is all that should be included.

A more detailed emails can come after a customer has registered. For instance, a welcome email is a good place to explain the program more thoroughly. At this point you have already communicated the value of the referral program clearly enough to your customer so that they have registered. Now they will care more about the referral process and what goes into making a successful referral.

2. Only include one call-to-action

Another thing I have seen in referral emails is more than one call-to-action (CTA). At one point I read a referral email with an upwards of four CTAs. While most of these CTAs led to the same page it was still very confusing and overwhelming.

The point you have to remember is that whether this email is a referral program launch email, special offer, or referral status update, it should have ONE specific purpose and therefore only ONE call to action. Don’t try to pack in other information. It will just become confusing and will lead to a higher bounce rate.

3. Keep referral emails aligned with your current brand creative

A referral program is an extension of your brand. Therefore, you want it to mirror your brand’s look and feel whether this is a home grown referral program or specific software designed for B2B referrals. This is important because if you go off brand it will decrease the trustworthiness of the program and the referral emails. With a promotional email you are trying to prompt customers to click through to the referral program and provide their information, which requires trust. When thinking about this crucial element be sure to insist upon white labeling, especially when using automated referral program email notifications. If a program is run by a referral company you don’t want it to appear as if another company is sending your customers emails or collecting their data. By making sure the automated status emails that come from the referral program are completely white labeled, you increase engagement.

4. Include a special offer

Special offers are great way to motivate registration and generate referrals at launch. They are also good for re-engaging advocates to refer during slow periods. When sending out a special offer email, only emphasize the special offer. Don’t put emphasis on the regular reward or it will become confusing to advocates on what is being offered. If it takes too much time to understand what reward you’re offering, advocates won’t click-through.

If you are trying to make it clear this is a special offer use language like:

  • For a limited time (DD/MM/YY – DD/MM/YY)
  • Limited time only
  • Exclusive, limited time offer
  • Enjoy double rewards for a limited time

This type of language can make advocates feel like your offering them something special to show your appreciation. If you want to include a specific time frame, try just including the date range under the heading in smaller letters. What you don’t want to do is emphasize language that will make customers feel after the time period is up they will have something taken away. By writing a paragraph or even a few sentences about what the referral reward will go back to after a certain time it puts too much emphasis on what an advocate will be losing after that period of time. Instead of making an advocate excited about a special offer it makes them feel resentful. However, if you feel like you must include something about the regular reward, do so in a way that explains that you are offering this special offer to reward loyalty.

5. Automate notifications but keep them personal

Keeping advocates engaged is a key part of B2B referral emails. This is especially important since B2B companies need to nurture customers to extend their lifetime value and have a long-term relationship to increase ROI. Manually updating advocates when their status changes can be time consuming, lead to errors and will never allow for a referral program to be scaled. If you plan on using referral marketing software that automate email notifications and communication make sure to keep it personally. Try to include the advocate’s name and the name of their referral.

When a referral status is moving closer toward successful, include a CTA that prompts the advocate to refer again. This can take advantage of the excitement and good feelings an advocate gets moving closer toward their reward to obtain multiple referrals.

8 steps to launching a referral program

Do you have suggestion or want to discuss other referral email strategies? Tweet me @ContentMktg2