Why referral widgets fail to create long-term customer relationships

The referral-centric approach vs. the advocate-centric approach

Marketers and sales teams alike are focusing on finding new ways to break through the marketing noise. To accomplish this, business have discovered the importance of a relationship-focused sales approach that expands on customers good interactions by using an advocate-centric referral program as a primary strategy. But like any business practice there is more than one way to go about collecting referrals and recruiting advocates. The referral-centric approach (referral widgets) and the advocate-centric approach are two methods that prioritize different types of referral interactions.

The referral-centric approach emphasizes ease of use by having the program built around referral widgets to get a one-time referral from an essentially anonymous advocate. This approach is usually considered a fair option for an ecommerce company that wants to sell their products but doesn’t care who is buying them and are not interested in generating repeat referrals or sales from a customer.

The advocate-centric approach emphasizes the advocate experience and data from your advocate as the primary importance with a fully built referral program to support it. This approach is optimal for generating repeat referrals, building long term relationships, and increasing customer engagement and ROI.

In essence, a referral-centric approach vs. an advocate-centric approach is equivalent to the comparison between a one-night stand and a monogamous relationship. Both are a form of interaction but with different intentions and very different results.

With a one-night stand you gather hardly any information because you aren’t interested in having contact with the person again. Once you achieve your desired interaction you don’t try to continue building the relationship.

However, when you are trying to have a monogamous relationship, you get their contact information, learn their name, get to know their interests, and try to understand the person you’re interacting with in order to build a successful long-term relationship that continues to benefit both parties.

When trying to decide what approach blends with your business model consider the pros and cons of both methods.

The pros and cons of the referral and advocate-centric approaches

Referral-centric approach (referral widget)

Pros

  • Referral widgets can be placed on existing sites
  • Low barrier for advocates to register

Cons

  • No registration other than email address so no advocate data
  • No way to accumulate rewards
  • No way to encourage repeat referrals from advocates
  • Requires web developer to place the widget on sites
  • Requires IT to perform security reviews
  • Ad blockers block referral widgets

Advocate-centric approach (Full referral program)

Pros

  • Full profile of advocate data and program activity
  • Can utilize reward structures that encourage repeat referrals
  • Minimal IT needed
  • Holistic view of all referral activity available for advocates

Cons

  • Registration (1st time only) is an extra step (only if not using SSO)
  • Goes to a different page to make a referral

Unfortunately, while both approaches have their pros, the discrepancies of any relationship building capabilities in the referral-centric approach removes much of a referral program’s ability to positively influence the holistic experience of customers. In addition, it creates a barrier to implement a relationship-focused sales approach which is what the referral methodology is based on and what generates referral program’s unparalleled results.

Discover how an advocate-centric approach can impact your ROI. Calculate what your advocate-centric referral program ROI can be with an ROI Calculator.

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Digital humanism takes on its most exceptional form in referral tracking programs

From digital machinism to digital humanism with referral tracking programs

Marketing best practices are constantly evolving. But not long ago, technology did what we always swore it would do – it took over . . . marketing communications that is. More specifically, an extreme form of automated communication became a highly adopted manner of outreach to prospects for B2Bs. In fact, it was so heavily adopted that personalization and human relationships were almost completely discounted (as opposed to referral tracking programs). This included prospecting in the form of automated calls and emails that aren’t personalized.

Gartner views this as digital machinism and in the blog, Embracing Digital Humanism, they define it as, “A view that sees the minimization of human involvement through automation as the central focus of technology.”

While digital machinism is beneficial to some extent, unsurprisingly, many potential customers felt a disconnect when businesses implemented a fully automated form of communication. And with the large amount of genericized marketing noise assaulting them they soon started to block it all out with spam filters and Adblock. Recently, there has even been the development of the Jolly Roger Telephone – an automated system that that screens both human and robot telemarketers to prevent them from reaching you and wastes their time by keeping them on the phone.

But while, “We must recognize the profound impact digital technology is having in the work, the way we shop, the way we interact, the way we live,” said Brian Prentice, Research Vice President at Gartner. “Businesses should seek to understand how our shared humanity can define the systems they create and control.” This is where digital humanism comes in.

Digital humanism is defined as technology that’s main focus is on people. Digital humanism adds amazing power to technology by enabling people to play a greater role in its success while consistently increasing the benefits it can deliver by emphasizing human connections and relationship building. Referral tracking software is the epitome of digital humanism, taking relationship building and customer engagement to the next level.

Grow your ROI by giving power to the people with referral program software

The best practices for marketing have come back around to personalization and a relationship focused sales approach but still emphasizes the power of automation for B2Bs.

Powerful relationships are at a referral program’s core. Referral tracking software harnesses the persuasive power of your customer, partner and employee’s peer relationships and incentivizes them to warmly introduction your brand through trackable social sharing, email, personalized URL, or offline referrals. Within referral tracking software, companies that have advanced automation gain additional value by being able to empower these relationships with intelligent insight, including:

  • Referral tracking
  • Advocate referral data
  • Advocate nurture emails
  • Automatic transfers of referral data to your CRM
  • Advocate’s personalized portal to view their referral data and status

Automation takes on a human aspect in referral tracking programs by functioning as a mechanism for further personalization, insight into customers, engagement by advocates and optimized management of the referral program to enable ease of use for admins.

Adoption of technology that harvests and nurtures relationships is key to current and future success.  Through the avenue of referral tracking programs within digital humanism, businesses are able to take advantage of the fact that:

  • Customers are 400% more likely to buy a product recommended by someone they know. (Nielsen)

Driving more companies like DIRECTV and ADP to adopt referral tracking programs with:

  • Leads generated from referrals convert 4X better than marketing leads. (emarketer)
  • The LTV of customers is 16% higher than that of non-referred customers. (Harvard Business Review)
  • Referred customers churning 18% less than non-referred customers. (Harvard Business Review)
  • A conversion rate of 35% from referral to purchase. (Amplifinity)

Discover if a referral tracking program is the right channel for you to start embracing digital humanism and capture unparalleled ROI by taking the quiz, Are referrals a fit?

 

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Questions? Email me at JEdmondson@amplifinity.com

How B2C referral strategies enhance B2B referral programs

Why B2B businesses should incorporate B2C referral strategies

It has been widely recognized that referral software is highly beneficial for stimulating strong revenue growth. But a successful referral program doesn’t just happen. It needs to have a dynamic promotional strategy.

Most of us will remember hearing versions of George Berkeley’s philosophical question even if we didn’t know it was him who originally conceived the notion: If a tree falls in a forest and no one is there to hear it, does it make a sound? In 1710, the original question appeared in his work, Treatise Concerning the Principles of Human Knowledge, and unintentionally and unexpectedly it applies to referral strategies today.

Berkeley’s conclusion was that, “The object of sense exist only when they are perceived; the tree therefore are in the garden . . . no longer than while there is somebody by to perceive them.”

In context, even if you have the best referral program, without the right promotional strategy that allows constant and increased perception it essentially doesn’t exist. After all, if advocates don’t know about your program there will be little to no participation, and soon enough your program really will cease to exist.

But understandably, it may be difficult for B2B business to kick off the right promotional strategy for their referral program. This is based off the idea that multi-channel advertisements and promotional strategies that drive immediate action are not as much a natural part of many B2B’s overall business model. The majority of always on advertisements, special offers, and promotions having largely been a B2C game because of their shorter or immediate sales cycle.

So instead of thinking along the lines of regular B2B promotions for your referral program, try taking a page from a B2C business. DIRECTV is one such business that has rocked the promotion of their referral program which has resulted in the utmost success.

DIRECTV’s referral strategies

DIRECTV has created an extremely successful promotional campaign for their referral program. This success stems from the fact that their referral program promotion campaign came as a natural extension of their current promotional strategies. DIRECTV employed an entertaining and engaging promotional strategy that aligns with standard practices for a B2C. But that doesn’t exclude it from being extraordinarily beneficial for B2B referral promotions.

Through the use of multiple channels and an always on approach, DIRECTV created awareness of their referral program with the majority of their customers knowing the benefits of referring their friends and how to do so. By taking a similar approach to referral promotions a B2B referral program can garner the same kind of success that DIRECTV has been able to accomplish. The channels DIRECTV used to build awareness are:

Video – DIRECTV created a variety of short commercials that were built around humor and entertainment but communicated how to refer your friends and the benefits clearly. These commercials engaged customers and their entertainment value improved how viral their videos became. For B2B businesses these videos can be posted on social media, the homepage, the account page, and on any online communities.

DIRECTV Refer a Friend IMAGE 1

DIRECTV Refer a Friend IMAGE 2

Special Offers – DIRECTV continues to create renewed special offers that reengage their customer base and continue to motivate referrals from their advocates. For a B2B, these special offers can be sent in the mail, by email, posted on social media, or posted on an online community. This will not only drive continued engagement by advocates, but help recruit new advocates by offering an incentive that is too good to pass up.

Referral Rewards

Website and Account Promotion – Together with DIRECTV’s other offers, homepage and account referral promotions help to increases their referral program awareness. This strategy can be applied to B2B business to ensure that each interaction with your brand encourages engagement in the referral program.

DIRECTV is Amplifinity's customer

Regular Email  – Regular email are advantageous by reminding customers of a way to reduce their bills when they receive it. For B2B businesses, email is already a part of the promotional strategy. Try to include referral promotions in the footer of regular subscription emails along with creating dedicated promotional referral emails.

Learn more about what it takes to develop a winning referral promotional strategy by downloading the free e-book, 8 steps to Initiating the Right Launch Sequence for your Referral program.

launching a referral program

Photo Credit: DIRECTV

Originally published on Customer Think

Questions? Email me at JEdmondson@amplifinity.com

 

Why customer advocacy means the end of reseller partners

Customer advocacy is the practice of leveraging your customers to endorse you and with the right tools it has become a very powerful source of lead generation for businesses. These endorsements can come in many different forms ranging from product reviews on third party sites, to sales references, to referring your product to someone in their network. Sales and marketing have been begging customers for these things for years but they haven’t been able to turn it into a significant lead generation resource.

Now there is software available that allows you to get customers advocating at scale, software for getting content and software that drives referrals and they are working. SiriusDecisions recently highlighted some customer advocacy programs that are impacting revenue in this presentation. It isn’t just influenced revenue. ADP stated that customer advocacy via referrals is their top source of leads that turn into revenue.

But with the onset of customer advocacy adoption and companies realizing the value of it, it’s  highlighting a big problem with reseller partnerships. Specifically, with reseller partnerships you get revenue, but don’t have any relationship with the end users of your product. They aren’t your customers, they are the Customers of your reseller.

These customers may be some of the best and happiest users of your product, but they have no relationship with you so they can’t be leveraged for customer advocacy. If you don’t own the relationship, you can’t control it.

This is one of the reasons why companies are moving away from reseller partners and transitioning toward Referral Partners.

How to leverage referral partnerships with customer advocacy

Referral partnerships benefit both the partner and brand/customer marketer. With referral partnerships you can still leverage the value of your partner network, while keeping the customer relationship direct. The way this works is that your partners act as a trusted adviser to your target buyer. They can recommend your product to them and can get compensated for that recommendation if they end up buying your product. This generates a high quality lead in your sales pipeline that gets sold by your sales team.

And now there is software that can manage the complexity of that relationship from delivering the referral experience and tracking that referral, rewarding and fulfillment process with variations as needed by partner. Relative to resellers, this drives incredible value for Partner Marketers, Sales, your Partners and your Buyers.

Partner marketers can drive incredible value from your partner network while making your brand and customer marketers BFFs. By transitioning to referral partnerships, you are extending their pool of potential advocates that can take actions to make referrals and endorsements. And this of course, drives more revenue.

As customer advocacy becomes a more common and expected part of the lead generation and buying experience, I predict that companies will find it difficult to justify their investment in reseller partnerships.

Justify your investment in customer advocacy by trying out the ROI calculator to discover the ROI you can achieve with a referral program.

CTA_ROI_calculator_v2

How to go above and beyond refer-a-friend with professional referral marketing

How B2Bs can avoid getting stuck in the refer-a-friend zone

Automated referral marketing software is a semi-new creation in the tech world that has only relatively recently started to get major recognition and acceptance for its remarkable revenue generation. But even with this recognition the adoption of referral marketing programs can still get confusing with all the different terminology companies are using. One such term that has gotten a bit jumbled in its meaning as referral marketing evolved is the B2C referral term refer-a-friend.

Why?

During the point at which referral marketing programs started to develop, they were mainly focused on the B2C arena, even though many B2B Salespeople still asked for referrals. Thus came the popularity and acceptance of the B2C term, refer-a-friend, in regards to referral marketing. And so it is not surprising that for a long time this term defined the referral marketing space and the features that were developed to support referrals.

But what’s the big deal?

Well we all know what it means to get stuck in the ‘friend zone’. But how about when a B2B gets stuck in the refer-a-friend zone? Like the ‘friend zone’, the refer-a-friend zone fails to nurture any referral relationships beyond that of a simple friend relationship due to its in-ability to perform the necessary actions and processes needed to align with a next level referral relationship, aka a business relationships.

But while more B2B focused referral programs came out, many still couldn’t shake some of the refer-a-friend functionality or the term. In other words, many referral marketing programs that were deemed fit for B2Bs still stuck them in the refer-a-friend zone because of their lack of features that aligned with B2B functionality, integrations, and processes. And while refer-a-friend works for precipitating referrals for B2C business between friends or acquaintances at the base level, it doesn’t have the functionality to nurture referrals in a business relationship.

The reality is, B2B and B2C businesses have very different demographics. And B2B businesses need technology that supports their demographic and business processes. That’s why company’s like ADT and ADP have adopted professional referral marketing programs that have features that nurture their professional customers and partners to make referrals.

To avoid getting stuck in the refer-a-friend zone understand the differences between a refer-a-friend program and a professional referral marketing program.

Refer-a-friend vs. a professional referral marketing program

Refer-a-friend programs

  • The referral program exists online only.
  • Referrals are part of an ecommerce buy flow.
  • Referrals have a lower life-time value with less opportunity to engage Advocates.
  • Refer-a-friend is best for shopping cart referrals.
  • It resides as an added promotional or campaign tool to increase engagement during key times of the year.
  • It has a simple reward structures.
  • It has minimal integration options

Professional B2B referral marketing programs

  • Referrals are integrated into the lead buy flow.
  • Sales teams have referral data and functionality integrated into their current technology.
  • Partner referrals are used to strategically manage partners.
  • The referral program is always live for constant engagement and revenue growth.
  • They have sophisticated reward structures to keep Advocates referring multiple times.
  • Advocates are segmented with targeted messages, rewards, and positioning.

By breaking down the differentiation between refer-a-friend programs and professional B2B referral marketing programs you can decide what type of program can best move you forward in your lead generation efforts to capture a 35% conversion rate from referral to purchase, (Amplifinity).  Discover what your ROI could be with a professional referral marketing program by trying the ROI calculator today.

CTA_ROI_calculator_v2

Mirror, mirror on the wall . . . Are your referral metrics the fairest of them all?

Don’t let vanity referral metrics lead you astray

Marketers put a substantial amount of time into referral initiatives and programs in an effort to grow revenue and achieve fantastic ROI. But it can be difficult to determine what referral metrics actually represent how our programs and strategies are performing. The problem is there are growing amounts of metrics that all are promoted as providing amazing insight into your initiatives but without context, the metrics you’re relying on and any wonderful insight you’re seeing can easily turn into a vanity metric.

But what is a vanity metric? A vanity metric is a metric that appears to demonstrate program growth but in reality doesn’t reflect the health of your initiative. Often, this happens when metrics are being looked at as a standalone performance indicators instead of being connected to revenue producing action.

So how can you tell if you are relying on referral vanity metrics? By asking the right questions about your data and reports. This not only applies to referral programs, but marketing automation, CRMs, and much more.

How to avoid turning your referral metrics into vanity metrics

There’s no such thing as a stupid question. In fact, the more you question your referral metrics, or any metrics, the better off you’ll be.  So where do you start?

One of the main cause of your metrics becoming a vanity metric is if you’re looking at them all individually instead of creating context by looking at how each metric relates to one another.

Follow this line of questioning to avoid having your referral metrics turn into vanity metrics and determine if your referral program is really paying off as well as you thought it was.

Questioning your referral email metrics

1.Your referral program promotional emails have a good open rate, but are you getting click-throughs?

While potential Advocates (customers or partners) might be opening your emails, if nothing is motivating them to take the next step it’s time to reevaluate your emails and pinpoint what is turning advocates off or what could be changed to motivate them to click-through. However, by itself, click-throughs are not a constructive way to measure the success of a referral email.

 2. If you’re getting click-throughs are they translating into conversions?

Click-throughs are only as valuable as their next action. If click-throughs aren’t translating to conversions than they don’t mean a thing.

 3. What action do you want your potential or current Advocates to take?

One thing to consider is what you have defined as a conversion. If a conversion is something so insignificant that it won’t help get your program any closer to generating increased revenue there is no point to it. In this current state, a conversion becomes a vanity metric. However, if you define your conversion as registration into your referral program or current Advocates making a referral from a promotional email they received, then you have conversions that are worth more because they are on track to producing revenue growth.

Questioning your Advocate referral metrics

1.You have Advocates, but are they making referral shares?

Let’s suppose a substantial number of Advocates have registered for your referral program. What does that mean? While it is defiantly a good sign it doesn’t mean your referral program is demonstrating growth. If your Advocates aren’t making referral shares they aren’t generating revenue growth for your program. Look into your rewards to see how you can better spark Advocate referrals.

2. If they’re making referral shares, are they sharing it with the right people?

If Advocates aren’t sharing referrals with the right people, they aren’t going to be accepted. Communicate to your Advocates what demographic would lead to a successful referral. Tell them to keep a look out for people who would benefit from your product or service, a person or business that has the resources to buy, the right person within a company that is or has the ear of decision makers, or all of the above.

3. If the referrals are largely accepted, are they closing?

The people your Advocates are sharing referrals with might be accepting the referral but no sales or not a large amount of sales are being closed from it. While a large number of accepted referrals might look good, if they aren’t closing you’re not generating large revenue from your referral program. Try to determine what is making Advocates decide not to buy (price, miscommunication or features) in order to adjust your pitch and close more referrals.

When evaluating your referral metrics or any program metrics always ask yourself whether this action contributes to your revenue growth. If the answer is that it doesn’t then you’ve encountered a vanity metric.

However, if you have tied your referral metrics to revenue growth but they aren’t showing that you are generating the revenue to meets your goals your problems might be greater than vanity metrics. More likely the issue lies with your referral program itself.

Start exploring how to improve your ROI by learning how to implement a scalable automated referral program with the e-book, 8 Steps to Initiating the Right Launch Sequence for your Referral Program

launching a referral program

Originally published on Salesforce 

Questions? Email me at JEdmondson@amplifinity.com