Clear gaming smoke from your referral program

In running referral programs, you’ll want to assure that the referrals you receive are legitimate and honestly put forth.   While no software system can fully anticipate the vagaries of human behavior, there are many things a referral software system can do to minimize gaming.  Let’s look at the types of gaming and then take a three-pronged approach to address the problem.

Observed Gaming Behavior

Gaming of referral programs is generally driven by three different personas:  Sales Reps, Advocates, and Prospects.  Here are a few examples:

Sales Rep Referral Gaming

Sales reps have inside knowledge of deals, which gives them the opportunity to find ways to reap a referral reward in addition to their normal commission.  They may:

  • Ask a friend to refer a deal that they have already worked and is close to closing, then split the reward with the friend after the deal closes.
  • Pose as a customer to register themselves as advocates, thus setting themselves up to receive a reward for their own commissioned sale.

Advocate Referral Gaming

While loyal brand advocates tend to adhere to the intent of a referral program, less loyal advocates, or non-customers who sign up as advocates, may choose to maximize reward revenue via less-than-admirable means.  They may:

  • Attempt to do a self-referral to gain a reward for something they were already planning to buy.
  • Ask a friend to accept a referral for a service that has a trial period, suggesting that the friend cancel the service after reward payment but before the trial period expires.  
  • Do email blasts to a large, primarily non-qualified audience.  While not inherently fraudulent, this behavior can generate unhappy customers who find that the referred product is not a good fit. For product sales, this generates ill will; for service sales, this creates churn and unprofitable customers.

Prospect Referral Gaming

Prospect gaming is rare, but in some cases prospects who wish to game the system will look for loopholes in the referral offer.  For example, if the prospect receives a reward for signing up for a service, she may cancel the service after reward receipt but before service payment.

Amplifinity’ Answers to Gaming

The recommendations that follow are based upon Amplifinity’s experience in supporting millions of referrals that have driven nearly two billion dollars of new business.  We’ve learned that successful referral programs address gaming on three fronts to guide the user away from gaming opportunities, block gaming activity, and report on gaming activity that cannot be blocked.  Here are some guidelines, as embodied in our platform and our successful referral program configurations, to help you design a referral program that drives genuine referrals.

Guide Behavior

Start by constructing your referral program to minimize the opportunity for fraud:

  • Use Single Sign-On (SSO) to assure that advocates are legitimate customers, employees, or partners.  This helps to eliminate sales rep gaming that relies on a friend to make referrals for deals already in the works.
  • Similarly, if the customer does not use SSO, validate new advocate registrations against a list of known legitimate customers, employees, or partners.
  • Use a validation upon registration to gain assurance that an advocate is using his or her own email address.
  • For concern about sales reps that pose as customers to make referrals, consider registration of advocates by invitation only.  For example, the Amplifinity platform will import your list of eligible customers, employees, or partners and then invite them into the program.  In this scenario, only invited individuals can become advocates, preventing sales reps from posing as customers.
  • Select reward types that balance strong incentive value with discouraging fraud.  As an example, sales reps will not ask their friends to refer accounts already in the sales cycle if the reward is a bill credit, which the sales rep will never see.
  • Use reward retention periods.  To prevent advocate and prospect gaming by service cancellation, configure the retention period to be longer that the service cancellation period.
  • Amplifinity also recommends that brands make rewards revocable (in terms and conditions) to allow brand to take action if fraud determined after reward payment.

Block Behavior

Prevent actions that make it easy for users to game the system:

  • Prevent self-referrals by blocking referrals to an advocate’s own name and email address.
  • Prevent multiple rewards for the same referral by blocking an advocate’s duplicate email referrals to a prospect.
  • Prevent multiple rewards for duplicate referrals to a single prospect from multiple advocates.
  • Do not reward referrals that are entered after the sale is closed.
  • Block mass emails by limiting the number of referral emails an advocate can send in a single day.  Valuable referrals are made by advocates who thoughtfully select their advocates.

Flag Behavior

Even with programs that guide advocates well and block gaming behaviors, it is important to be vigilant for other types of gaming. Comprehensive reporting helps identify referral actions that don’t fit expected or historical usage and uncovers potential fraudulent activity, such as:

  • Shorter-than-usual referral-to-close cycles
  • High number of referrals in a short period of time
  • High number of successful referrals in a short period of time
  • If the brand is observing and of these potential bad activities, withhold reward payment for a brand-defined number of days to enable time for investigation of the flagged activities.

 

No More Referal Program GamingIn working with our customers, we’ve found that our referral platform capabilities and operational recommendations described above dovetail cleanly into the referral experience of advocates making genuine, legitimate referrals.  At the same time, this approach frustrates the efforts of would-be referral gamers.  This enables our customers to maximize referral success while minimizing the impact of gaming.

Questions? Email me at LBloom@amplifinity.com

SaaS referral automation

 

 

The advocacy market explained

I’ve been to three analyst conferences already this year and each one is creating buzz around the term “advocacy”.  Unfortunately, they all talk about it differently.  Some on the social media side simply use advocacy as a synonym for word of mouth marketing.  Others label it brand advocacy or customer advocacy. To marketers like myself, it is all a bit confusing.  I wondered what type of solutions are considered advocacy solutions and who is buying them?

After doing some research in the space and having many discussions with analysts, I realized that there are two major buckets of advocacy: advocacy to drive brand awareness and advocacy to drive demand generation.  These are two totally different initiatives and two totally different buyers.

Once you understand that separation, it is clear that there are also differences in the types of solutions that enterprises need versus those targeted at SMB.  The result is 4 segments of the advocacy market.

Advocacy explained

 

 

There is a great new white paper called “The Advocacy Market Explained” that details each of these segments as well as the buyers.  The best part is that at the end it helps you to analyze where you should get started to begin taking advantage of advocacy in your organization. I highly encourage you to read and start thinking about how to leverage advocacy to meet your objectives.

Want to further the discussion? Tweet me at @TrishaWinter

What is brand advocacy?

Sun Tzu’s ‘The Art of War’ and employee referral programs

Sun Tzu was a pretty ferocious character. For over 2,500 years, the ancient Chinese general’s Art of War has been studied by military scholars around the world. Many regard it as the greatest treatise on war strategy ever. In recent decades, business scholars have mined it for business advice, pretending that Sun Tzu was really talking about corporate strategy when he wrote it. Indeed, nearly all of his verses apply to the business world. Except for maybe the ones about dropping fire out of the sky on people. But we’ll skip talking about those.

Today, let’s focus on Chapter II, Verses 16 – 18. As you read the following, do so in a slow loud, growling voice. It helps to understand where Sun Tzu was coming from…

“Now in order to kill the enemy, our men must be roused to anger; that there may be advantage from defeating the enemy, they must have their rewards. Therefore in chariot fighting, when ten or more chariots have been taken, those should be rewarded who took the first. Our own flags should be substituted for those of the enemy, and the chariots mingled and used in conjunction with ours. The captured soldiers should be kindly treated and kept. This is called using the conquered foe to augment one’s own strength.” — Sun Tzu, 500BC

That was really awesome. Clearly, Sun Tzu is talking about the importance of incentivizing employee referral programs. Let’s break it down together:

1. Reward your employees when they steal customers from your competitors.
2. Reward your employees when they recruit employees from your competitors.
3. Stealing customers and employees from your competitors will make you even stronger.

That sounds really cool and scary, doesn’t it? The only problem is that when Sun Tzu was around, even a gang of a hundred guys was considered an army. How do you keep track of things when you have thousands of employees and millions of customers to steal? The best solution is to have a software platform like Amplifinity integrated with your CRM system or billing system that keeps track of who is stealing whom. This ensures that customers don’t get lost and that employees always get rewarded when they earn it. Our platform works well for employee recruiting on behalf of human resources too.

So, if you need a software platform for your own competitive Art of War marketing warfare, Amplifinity is the strategy for you. Our software is Sun Tzu on an enterprise scale. We allow employees to reach out across their social networks (online and offline) to nab friends, family members and colleagues from competitors.