Everyone knows the metaphor of the caterpillar turning into the butterfly. A transformation from an existence only slightly more spectacular than a worm to defying gravity in a beautiful array of color. But becoming a butterfly doesn’t just happen. It takes work and labor by the caterpillar to surround itself in the cocoon and then break through all its hard work to escape the confines it created and fly. However, we rarely talk about the struggle the caterpillar goes through to become a butterfly only the marvelous fact that the transformation happened.
A similar occurrence happens in the business world. Sometimes it appears as if businesses are just naturally blessed with successful lead generation initiatives like referral marketing. But the truth is that most businesses just don’t talk about the challenges they faced. For obvious reasons, they prefer to talk about their success. However, a business that overcame their referral program challenges are a trove of information since many referral marketing programs can face similar roadblocks to growth including:
- Friendly fraud – When Salespeople and customer Advocates find a way to game the system and take advantage of it.
- Breakage – The referral program isn’t able to successfully attribute the Advocate back to the lead causing dissatisfaction among users and poorly effecting the success of the program.
One business that has done a marvelous job overcoming referral marketing challenges and understand the value of sharing this information is RingCentral .
How RingCentral overcame referral marketing challenges
RingCentral has had 3 different referral marketing programs. They launched their first referral marketing program between 2010 and 2011 as a homegrown referral program. They understood the value of referrals and while it was one of their top performing channels it had some challenges.
- eCommerce made it easy to generate leads
- Great customer loyalty
- Small customers making small referrals resulted in good conversions
What didn’t work:
- Small leads made for low revenue contribution
- Difficult to resolve attribution which caused a high number of customer complaints to Sales
- Strained communication between Sales, Marketing and the Advocates
This lead to the realization that they needed a more robust platform.
The second referral marketing program was a combination of Marketo and Crowd Factory, and while it was an improvement they still found some functionality lacking.
- Automated fulfillment removed manual hassle
- Improved ways to refer with social media and email
- Sales integrated into the process
What didn’t work:
- A complex system with too many points of failure and no visibility to troubleshoot
- So many layers to the program that there was no way to know if something failed unless a customer complained which hurt the success of the program
- No visibility for customers into their referral status
- No way to easily get Advocate data/reporting
- Significant resources needed to manage the program’s operation and keep it up and running
- Lacked clear communication back to Sales
From these challenges, RingCentral understood that they needed a purpose built referral program software that specialized in referral marketing instead of general customer advocacy. After looking at different referral platforms they settled on Amplifinity for its targeted solution.
Why this referral program continues to excel:
- Sales can enter verbal referrals
- Sales can check the status of referrals in their own platform
- No breakage
- Easily update creative with no IT needed
- Easy reporting showing direct ROI
- Advocate homepage with real time transparency into their referral status
- Operational resources reallocated from maintenance to program improvement and growth
- Customers and reps like it
- Easy to use
- Easily add and change promotions
- Can dive deep into the data of the program
- Thorough validation of Advocates’ email
- Eliminates the possibility of Friendly Fraud
By going through three variations of programs, RingCentral learned what features are necessary for a referral marketing program to optimize resources and deliver the most ROI to a business.
Bottom line – RingCentral used their previous referral challenges to understand what they needed in a referral program and take full advantage of the amazing lead generation referral marketing provides.