Why a Referral Channel Isn’t the Same as Brand Advocacy

If you’ve just started to research a referral channel, you might be asking yourself, “Do I really need to automate a referral program? Our business already has fans that promote it on social media.” And while social media promotion from fans of the business are important to a business’s growth, this isn’t a referral channel. This is brand advocacy.

Now, brand advocacy is a great tool! This is organic, unexpected promotion, and it can be great for bringing in new leads. But it comes with its own set of challenges, and isn’t always the most sustainable way to bring in leads and grow revenue.

And that’s where a referral channel comes in.

Here are some of the key ways that a referral channel differs from brand advocacy, and why businesses should consider including an automated referral program into their lead generation strategy.

A Referral Channel is a Long-term Commitment.

While brand advocacy can encompass a fan who only tweets about your brand once, a referral partner or customer is someone who regularly interacts with your brand to give referrals.

That said, some referral partners are more active than others, and this is okay! Unlike other channel methods, a referral channel can be a great way to nurture your long tail partners and get the most out of their limited interaction.

How do you keep referral partners and customers active? Communication is a big part of it. Involving sales and special promotions are other ways to ensure maximum participation. Also, calculating the right incentives is an important part of keeping those in your referral channel engaged.

All of this can be very time-consuming, which is why automating your referral program is such a good option for so many businesses.

A Referral Channel is Scalable.

While brand advocacy is hard to grow past a small number of customers, a referral channel isn’t.

Referral channels can be scaled based on the needs of your business and referral partners. By keeping an eye on the right metrics, you can make sure that your business is growing at the rate that it needs to.

Scalability is another thing that automated referral channels can help with. By scaling your channel appropriately, you can make sure that your referral channel benefits your business, your partners, and your customers. This level of control simply doesn’t exist in brand advocacy.

A Referral Channel is “Always On.”

When managed right, a referral channel is a consistent source of leadgen and revenue. This is very different from brand advocacy, which can stop and start. A referral channel is managed by your business, which means you can keep track of how often referral partners and customers are generating leads and act accordingly.

Referral leads are, on average, more likely to convert to deals than other leads. This means that a referral channel can always be generating revenue for you on a consistent, trackable basis.
This is the main reason that businesses turn to a referral channel over other forms of lead generation, such as brand advocacy. And with software like Amplifinity, tracking the success of a referral channel is easier than ever.

Brand advocacy vs. referral marketing: What’s the difference?

Customer advocacy initiatives have increased in adoption significantly in the past year with analysts from SiriusDecisions emphasizing the impact of referral marketing and brand advocacy in their 2016 conference. But when researching advocacy and referral marketing initiatives, you might notice that there is confusion about the differences between general brand advocacy vs. referral marketing. So here it is:

Brand advocacy uses a few customers, employees or fans who are extremely passionate about a brand to advocate for them to groups of people, typically through social channels. Brand advocacy includes actions like testimonials reviews, sharing content and social posts. This type of initiative is often used interchangeably with word-of-mouth marketing.

Vs.

Referral marketing incentivizes customers (and partners) to advocate for a business or product through a personalized 1-1 connection between advocates and their personal and professional networks. These interactions, referrals, are a way to create a scalable channel for lead generation.

Or in other words, brand advocacy uses a few extremely loyal customers to try and influence on a group scale while referral marketing uses many galvanized customers and partners to influence individual peers on a personalized level.

The different roles brand advocacy and referral marketing play in an organization

Even after defining brand advocacy and referral marketing, the finer details that separate them can be blurry. As brand advocacy and referral marketing initiatives differ in result and execution, so do the roles that drive them in an organization.

Brand advocacy

Within an organization, brand advocacy can be very similar to storytelling. Brand advocacy often starts within an organization through the use of employees. This type of general initiative is encouraged or required by all departments by spreading the brand’s story and message through social media and content sharing.

When a dedicated brand advocacy program is undertaken, it often falls under PR, Communications or Social Media marketing with customer success providing significant support. The high involvement of customer success is due to the nature of brand advocacy. Since brand advocacy programs lean away from using incentives, but instead rely on a few highly dedicated customers to preach their story, it means that customer success needs have a strong nurture campaign in place in order to increase the number of brand advocates.

For marketing, brand advocacy acts as an awareness program for an organization.  These responsibilities include:

  • Recruiting customers to become advocates.
  • Keeping track of the analytics.
  • Developing materials and content that can be shared by advocates.
  • Promoting the brand advocacy program to customers.
  • Creating materials for customer success.

When undertaking this type of brand advocacy initiative there are some challenges:

  1. Brand advocates have a specific amount of reach that “dries up” over time.
  2. It is difficult to scale brand advocacy activity beyond a small percentage of customers.
  3. It is easy to “burn out” an advocate by asking for too much from them.

But don’t get me wrong, brand advocacy has a meaningful place in an organization if you can keep your customers passionate about your brand and actively advocating.

Referral Marketing

Unlike brand advocacy, referral marketing’s main purpose is lead generation with the benefit of building awareness. Since lead generation is the focus, marketing and sales takes on the majority of the responsibility within an organization.

For marketing, a referral marketing program creates an always-on channel for organic lead generation at scale. This has been shown to generate an increased number of high-quality MQLs and increase the chance of buying by 400% (Nielsen).

As with a brand advocacy program the management, content creation, analytic, and promotion are the responsibility of marketing. But as this acts as a lead generation program there is more to it than brand advocacy. Since incentives are used to galvanize advocates (customer and partner) updating incentives and creating special rewarding structures also fall under marketing’s responsibility.

Marketing’s responsibilities for running a referral program include:

  • Recruiting customers (or partners) to become advocates and make referrals.
  • Keeping track of the analytics.
  • Developing materials and content that can be shared by advocates.
  • Managing incentives and their fulfillment.
  • Enabling sales to help drive referral success.

When undertaking a referral program there are some challenges:

  1. Ensuring referrals can be tracked from social media, email or a verbal referral to a salesperson all the way to a closed won opportunity.
  2. Fulfilling on incentives and tracking for tax compliance.
  3. Making sure referral functionality is in the CRM so sales can leverage.

Marketing can mitigate these challenges by investing in referral software for tracking, attribution and fulfillment of the referral and rewards. This takes the pressure off marketing and removes the chance of lost data or program breakage. The involvement of incentives also increases the need to offer real-time referral status updates to advocates in order to keep them engaged.

In regards to sales, they can play a significant role in driving advocate recruitment and referral activity if enabled to do so. After a referral becomes an MQL, sales needs the ability to view the data of the referral and advocate within the CRM in order to reach out to the advocate and qualify the referral. Once the referral is qualified sales can then can get a trusted introduction to the referral from the source that referred them. No matter how much passion an advocate feels for a brand, this added amount of nurturing the advocate undertakes requires added compensation which is why offering rewards is an important part of referral marketing.

Additionally, sales should be enabled to “own” advocates within the CRM so that objectives for recruiting new advocates and obtaining referrals can be measured and motivated. With advocate ownership also comes the ability to route leads made by an advocate to the salesperson responsible for the relationship. The outcome of this is a stronger relationship and engagement between customers and the brand.

What analysts are saying about referral marketing and brand advocacy

Referral marketing

“A referral program and referral software are concrete ways a company can actually show what customers have provided in terms of specific leads they’ve generated by being advocates. They help monetize something that’s pretty hard to monetize in specific terms.” – Megan Heuer, Vice President of Research, SiriusDecisions

“Referral deals move faster through the pipeline.” – Bob Peterson, Senior Research Director, SiriusDecisions

ADP found referrals are their top source of new leads. – SiriusDecisions, 2016 Summit

“Customer advocacy solutions can deliver significant business benefits by driving referral business and expanding wallet share among existing customers.” – Forrester Research

“Referral marketing is a channel that offers a high volume of excellent, low-cost leads.” – Gartner

Brand advocacy

“More and more companies acknowledge that if they don’t do a great job of engaging their customers after they buy, they’re not going to be able to keep them.” – Megan Heuer, VP & Group Director, SiriusDecisions

“Improvement in volume and quality of engagement with customers, improvement in retention, and a higher rate of customers who are active advocates.” – Megan Heuer, VP & Group Director, SiriusDecisions

“All opportunities supported by advocacy and other pipeline acceleration strategies benefit from quicker sales cycles.” – Bob Peterson, Senior Research Director, SiriusDecisions

Which initiative should you take on first?

There is no question that there is value in both brand advocacy and referral marketing. In large organizations these are handled by different groups within marketing so if you’ve got the resources, take on both. If resources are tight and you have to choose one, go for the initiative that brings the biggest impact to revenue growth – referral marketing.

With an average 35% conversion rate from referral to purchase (data from Amplifinity platform) it makes sense that referral marketing programs are dramatically increasing in adoption. Now that we’ve examined the differences between referral marketing and brand advocacy, discover why referral marketing program should be on your adoption list by determining your referral program ROI with the ROI calculator. Or if you’re still trying to figure out if referrals are the right next move for your organization try this quick (no form) quiz, Are referrals a fit?

cta-referral-quiz-1

This vacation brought to you by business referrals

Referrals take the guesswork out of your buying decisions

I’m sitting on a South Pacific beach, and you’d think that the farthest thing from my mind would be business referrals.  It was one of the first days of vacation and maybe I hadn’t quite pulled the plug, so I started thinking about referrals from a different perspective.  We usually think in terms of what referral advocates do to get the attention of prospects, but maybe we need to think more about the value of referrals to the prospects.

I did a thought experiment where I put myself in the role of a purchasing agent in a large organization.  And since I was settling into my vacation at a time-share resort, what better type of organization to consider. I need do no more than look around me to visualize the myriad decisions that I and my purchasing team would need to go through.  We’d have to find and source vendor relationships to support products and services such as:

Beach equipment – Who provides all the beach chairs, cabanas, and umbrellas that support our days of leisure?  What about the chairs and tables for the weekly outdoor luau, and the carts to move them? Who repairs this equipment after storm damage and normal wear and tear?

Towels – Where I was staying, every resort visitor gets two beach towels and can turn those in daily (or more often) for fresh towels.  Where does the resort buy those towels?  Who washes them? If it is the resort, then who supplies the laundry equipment?  The laundry soap and fabric softener?  Or, do they use a third-party service?  Same goes for towels, dish towels, and linens in the residence units.

Pool – Who maintains the pool?  Where do the chemicals come from?  Who repaints them?

Restaurant – One could dedicate a whole blog to food service.  Our resort has two restaurants, a pool-side bar, and a small convenience store/fast-food outlet.  How are they learning where to buy all the food and supplies for these facilities?

Furnishings and Appliances – Sofas, chairs, tables, beds, carpet, sliding glass doors, balcony tables and chairs, kitchen appliances, laundry appliances, and air-conditioning systems.  Where do you buy things?  Who services the appliances and air conditioning?

Communications – TV, Internet, and multi-function phones (the latter being overkill and mostly used for messages from resort staff).  Who is the ISP?  Who provides the connectivity?  Who wires the resort and maintains that wiring?

Golf carts – Not for the golf course – that, too, could be another blog.  But, golf carts used by resort staff to move supplies around.

Maintenance – Lawn mowers, tree trimmers, tractors for raking the beach, grass trimmers, leaf (and sand) blowers), painting, cleaning service.  Where does all of this come from?

And the list goes on.  Maybe we are sourcing some of these services from our local community for local use. Maybe we are helping the corporate office to source for regional or global distribution.  Our team is going to receive dozens of solicitations for each of the many products and services listed above.  We’re likely not satisfied with some of our current vendors, so we’ll be actively looking for replacements.  Other vendors will be trying to get us to replace vendors that we are currently using.  How do we make our decisions?  How do we decide which vendor calls to take?  How do we know which vendors to trust?

Referrals cut through all of this complexity.  Putting myself in the mindset of a prospect, if I hear from a colleague at another resort down the shore, or if a business acquaintance that I met at a hospitality business conference contacts me, I will listen.  If they tell me about good results from a service provider, I am going to listen harder.  I’ll respond to an email or return a phone call from someone I know, even a passing business acquaintance, ten times faster than any other solicitation I receive each day.  These are people with whom I already have a connection, and I’m going to listen seriously to their experience and the basis for their recommendation.  That’s why business referrals work!

The reality is, referrals are an important part of your prospect’s buying process. If you aren’t providing your customers and buyers with effective ways to give and get referrals, you’re missing the boat.

Now that I’ve got that off my chest and out of mind, let me get back to my Mai Tai.

Questions? Email me at LBloom@amplifinity.com

launching a referral program

How widgets limit your referral program’s functionality

Are referral widgets just a vanity application?

Referral widgets have become a widely adopted approach for businesses so you may be considering whether this is the best path to launching your referral program. But unless you’re an ecommerce company concerned with only tracking a single transaction and not interested in generating repeat referrals, widgets fail when applied to referral programs.

In fact, when widgets are applied to most B2B referral programs they become more of a vanity application than anything else. Like vanity metrics, widgets’ trending popularity in the technology sphere might make you think that adopting the widget strategy will improve engagement since it has no barrier to refer. But for B2Bs, widgets fail to prompt and capture repeat referral action and data which is essential to a successful referral program. While a widget makes it easy for customers to make a referral, it only does this by dramatically reducing the amount of valuable information you acquire.

A full referral program however, captures customer and partner information in order to build a mutually beneficial relationship and increase the value of referrals, generate and close a higher number of referrals, and obtain repeat referrals from the same costumer.

Check out these 7 questions to help you decide if a widget is really what you want or will just act as a vanity application.

7 Questions to ask when considering a referral widget

  1. Will a widget inhibit referral program data collection?

 

Yes. With a widget, there is no referral program registration. Program registration provides deeper understanding of your advocates and repeat referrals. The information you collect at the time of referral using a widget is usually the bare minimum necessary to track and fulfill a reward. Typically this is just an email address. The gathered information is more concerned with delivery of the gift card than creating a relationship with your advocates.

 

  1. How does qualifying leads change with a referral widget compared to a full referral program?

 

With a widget no advocate profile is created, which means that you cannot see top advocates (other than email addresses). Additionally, there is not enough information to pass into Salesforce to match up with a contact. Therefore, no advocate data exists in Salesforce. That also means no Advocate name listed on the referral lead so you can’t contact them to prequalify the lead.

 

  1. But wait, can’t we just collect the name and create a profile each time a customer or partner use the widget?

 

Sure, but then you are forcing them to register each time and they might change their contact information so you have no way to ensure that their data will be combined properly. Furthermore, this would eliminate the fundamental advantage of the widget that it is a simple process. Once you add registration, you might as well not use the widget.

 

  1. Hold up, if it is an SSO system, can’t the widget talk to that system and get the info?

 

This is possible, but only with so much dev effort that it eliminates the value of the widget being easy to drop in. One company I talked to about this strategy attempted to do this and had to develop an entire page solely focused on supporting their new widget. It took so much dev time and effort that they never were able to implement the widget on any other page.

 

  1. Does adopting a widget based strategy introduce any security concerns?

 

Yes. Another issue with widgets is that they open up your website to the potential of getting hacked. More specifically, your website is at the mercy of the security processes and standards of the company developing the widget you are adopting. To avoid this issue marketers should make sure the widget goes through a comprehensive internal security review to avoid introducing any security risks to their web properties.

 

  1. But widgets at least are always available and visible to a website visitor right?

 

No. Another limitation of widgets is that they don’t always work when a web visitor has ad blocking turned on. About 20% of web users today utilize ad blocker technology, which means 20% of your visitors won’t be able to refer.

 

  1. So how do widgets keep customers or partners engaged in the referral program?

 

They don’t. Another issue with the widget is that you can’t accumulate rewards. Since the widget tracks the single referral and not the advocate, you can’t use reward structures such as monthly commission checks. This also discourages repeat referrals.

At Amplifinity, our platform is designed using a relationship focused sales approach, which means that providing you the best data while creating a good experience for the customer and partners who are referring you is our top priority. And with the option of single sign-on (SSO) we lower the barrier of entry into the referral program to make customer and partner referrals seamless. Learn what features will increase your referral program ROI by checking out our features page and requesting a demo today!

 

ROI Calculator

Questions? Email me at JSwenson@amplifinity.com

Originally appeared in Customer Think

Amplifinity harnesses the power of referrals to boost customer engagement and revenue

Originally published on Loyalty 360

The age of relying solely on mass mediated channels to reach an audience of prospective clients and customers is over. The fact is that people do not trust traditional advertising or formulaic sales pitches as much as they trust each other. The rise of digital connectivity and the advent of social channels is increasingly allowing people, and brands, to turn to personal networks of friends, family members and professional associates to make decisions on what products to buy or what technology platforms to integrate.

For marketers, this should not be a cause for alarm. In fact, it presents a tremendous opportunity to use referrals to win brand loyalty and increase customer engagement. In some circles this is known as advocacy marketing, and it leverages social assets to engage potential customers overtime, and to nurture relationships established through the power of true brand advocates.

These relationships are vital because referrals from a trusted source have been proven to increase both the satisfaction levels and the lifetime value of customers. Furthermore, referrals can also cut through all the marketing “noise” that interferes with so many other marketing channels. Overall, the benefits of referrals are hard to dispute. But the problem for most brands is in knowing just how to access, integrate and leverage referrals to understand customers and build better relationships with them.

However, Amplifinity can help organizations facilitate this conversation.

As an enterprise class software platform that uses the best of current technology to meet the needs of its clients and their customers, Amplifinity recognizes the importance of referrals in building advocate relationships. At its core, Amplifinity turns customer and employee advocacy into revenue. It believes that the best business comes directly from customers who inform an organization about other people or companies that need its products or services.

By leveraging the very nature of our socially connected marketing landscape, Amplifinity has been able to create a reliable channel for customer acquisition and engagement by scaling referrals digitally. The accuracy of this platform is also impressive, and Amplifinity claims that no referrals are ever missed through its ability to track and manage referrals. To date, Northern Michigan University, ADT Security Systems, and Outdoor Living Brands count themselves among Amplifinity’s list of clientele.

Recently, Loyalty360 was able to speak with Trisha Winter, Amplifinity CMO, who spoke more in depth about the platform and about the state of customer engagement marketing in general.

Can you start by giving us a high level overview of your customer engagement philosophy?  

Winter: Amplifinity believes every company should be customer obsessed, not only building loyalty to translate to repeat purchase, but new business through referrals. We believe you need to be consistently engaged with customers and highly transparent in interactions by building trust and customer delight through interactions with your business and a solid referral program can be a key part of that engagement strategy.

And when compared to other technology providers, what is unique about Amplifinity?  

Winter: In the past year, there has been a big uptick in brands that are realizing the value of leveraging their customers’ advocates and looking for ways to operationalize that advocacy. What makes Amplifinity unique is our focus on integrating referral programs with direct sales and field staff. We enable verbal recruitment of advocates and verbal referrals to easily be entered into the system by the field and be brought into the fully trackable and fully digital experience. This greatly increases the program success and makes referrals a part of daily operations for the field without adding hassle to marketing.

How does it work? Can you give us a brief overview of Amplifinity in general?  

Winter: Our platform provides brands the ability to acquire new customers through their existing customer base, employees or partner network. These brand advocates use the platform to promote the brand’s product or service to their existing network through integrations with social media platforms and an email automation and management system within the platform. Amplifinity makes referral program registration and login simple and secure by allowing brand advocates to connect using their brand credentials with Single Sign On and automates the management of participant communication preferences through built-in CAN-SPAM and CASL support.

As brand advocates refer the brand’s product or service and the receiving member of the advocate’s network (prospect) accepts the referral, the platform connects the two participants within the system by attaching a unique code. This unique code is attached to all activity of both participants in the future and allows the referral automation system to close the tracking loop and attribute success once a purchase has been made. Amplifinity’s platform allows the brand to monitor the status of all referral activity and automates the reward process once a successful referral has been reached. Through APIs and other integrations, Amplifinity allows brands to connect the activity within the referral automation system into their CRMs, Marketing Automation platform, and other system of records.

We also see a lot brands struggling to create alignment and a true dialogue with their audience. How do you think brands can accomplish this and how can they leverage your technology to do so?  

Winter: We now live in a world of inbound acquisition. The best inbound lead that can be generated is from customer, employee or partner referrals; referrals from people who know and can speak highly of your brand. Data shows referrals are the highest quality leads. In fact, the average conversion from referral lead to purchase on the Amplifinity platform is 34%.

We also see brands challenged with regards to data. What do you see as the challenges brands face with data, analytics and creating insight today?  

Winter: Marketing’s biggest challenge is showing ROI for its spend, budgets have increased over the years and now marketers are being pushed to show results. Amplifinity’s platform can directly show new business from referrals. You get direct ROI, and it is a clear monetization of efforts on building customer loyalty.

And finally, overall, how do you see the state of marketing today?  

Winter: Marketing budgets soared as efforts skewed to digital. There is intense pressure to now show ROI for that marketing spend. At the same time, new technologies are coming out and it’s a race to stay on top of latest and greatest. With competing pressures and priorities, it’s easy to get swept away in new tech that doesn’t give results, or drive top line growth and it is difficult to show direct ROI for marketing activities.

Organic acquisition is great, but can it be done at scale?

Why referral marketing is the best channel for organic acquisition

Organic acquisition – kind of an oxymoron. Executives see the word “organic” and they think “free”.  Marketers see the word “organic” and think “a helluva lot of work”. Both know that it is the highest quality, but achieving it at scale has largely been a pipe dream.

The problem is that organic acquisition has always been a ‘Field of Dreams’ exercise. If you build it, they will come. And if you nail organic search with the right content, that does occasionally happen. I highly recommend that you keep up the great work in SEO, but the world of organic acquisition just got bigger!

Accel Partners, has created a unique visualization of the marketing technology space at Growthverse.com. Each circle is a subcategory and the size of the circle represents how many technologies are available.

growthverse

Zooming in on Organic Acquisition, you’ll note that SEO is now joined by SOCIAL and INFLUENCER/ REFERRAL MARKETING. In fact, both categories are larger than SEO. What this means, is that there are new ways to go to market for organic acquisition of new business.

growthverse2

A Breakdown of Organic Acquisition Technologies

Looking at these three subcategories of Organic Acquisition, it is clear that there are some interesting new ways for marketers to take more control over how they leverage organic marketing to drive demand.

SEO: This one is pretty well understood. There are technologies out there that help you win the Google search game by pointing out opportunities to optimize your content and get more traffic. This is a very valuable effort for marketing to focus on as organic traffic converts higher than other types of traffic.

SOCIAL: If you think about it, social media has given us additional search engines. In fact, after Google, YouTube is the second most used search engine. That’s why it makes sense that there are tools that can help you optimize the content you post on social sites in order to drive the most engagement and click through to your website.

INFLUENCER/ REFERRAL MARKETING: This category is the fastest growing of the three and for good reason. Technology that can help you to connect with your influencers or advocates in a personal way, at scale, is very appealing. In fact, it gives marketers control over organic acquisition for the first time ever!

In both B2C and B2B companies, they are establishing programs for customers, employees and even partners to advocate on behalf of their brand. The most valuable to those responsible for customer acquisition is referral marketing. The opportunity to have advocates drive a steady stream of new business into your pipe without having to use traditional paid channels is a very exciting prospect.

Now, take a moment to revisit what you are doing to optimize your organic acquisition efforts. Lead generation and customer acquisition marketers may be missing opportunities to drive high quality demand with an organic price tag that executives covet. Discover if referral marketing is the right organic acquisition channel to generate leads for your business by calculating how much growth revenue your business can achieve with an ROI calculator.

Best referral program

Care to continue the conversation? Tweet me at @Trishawinter

Originally published in Customer Think