Not all referral programs are created equal

Many enterprises today understand the value that can come from a program that allows customers and employees to refer their products or services to people they know.  If they can motivate their customers to recommend friends and family as new customers, they can get new leads and thus more revenue.  Not only will brand advocates make referrals; they become a part of the team by endorsing the products and services and amplifying the messages of the brand.  And it works – according to a recent study, 92 percent of people trust recommendations from friends and family above all other types of advertising.

Despite understanding the value that referrals can create, many companies have not utilized their knowledge to its fullest potential.  Of brands currently running referral programs, many of those programs are unsophisticated and difficult to use, leading to less than impressive results.  For example:

  • Some of these programs require filling out an excessive amount of information, including customer account numbers and other items that make it not worth the effort. 
  • Also, some of these less advanced programs simply take the information from the referrals and send out an email blast to the new leads.  These emails are just basic advertisements that don’t even tell the recipients that their friend recommends the product or service to them.  These emails might even end up in a spam folder.

More advanced programs are much easier to use, and have way more capabilities.  They may require as little information as a name and email address, making it much more attractive for busy people to fill out.  The referrals can also come directly from the friend or family member, rather than just the company itself, making the receiver much more likely to pay attention.  The messages on the best referral programs are even customizable, and can be delivered through many mediums, such as email, Facebook, Twitter, referral cards, and more.  And unlike weak and outdated programs, the software underneath automatically tracks all of the results so the company can confirm the success of their compaign.

Amplifinity works with many types of enterprise-level companies to help motivate social behavior, increase brand awareness, and drive revenue.  One client, a financial institution, prides itself on customer service and trust but wasn’t getting an ROI they were happy with.  Amplifinity helped them integrate a program that:

  • Offered the client’s employees and customers rewards for each new account opened
  • Used multiple touchpoints and outreach methods to increase the likelihood of enrollment
  • Gave the client the ability to easily track and manage all aspects of the program through one system
  • A continual increase, month-to-month, in successful referrals and customer acquisition

This is just one example of what a strong referral program to do.  To learn more about how to best run your company’s referral program, click here to download our free whitepaper, “Amplifinity’s Best Practices For Running a Successful Referral Program”.

Social media and the new world: Winning by losing

Lately, I’ve begun to view many aspects of life as a game – not in a casual, non-serious sense, but rather in a way that makes things more fun and less of a drag.  For example, I used to loathe doing the laundry, a mindless, yet necessary task which was the bane of my existence in college.  However, once I viewed it as a game, tackling the ever-growing mountain of clothing became less of a chore and more of a competition with myself.  How fast could I get it done?  How quickly could I fold everything?  How efficiently could I bring order to chaos?  (If you’re getting the sense that I led a pretty boring college life, you aren’t that far off.)

As adults in a capitalist/consumer culture, one of the biggest games we play is the money game.  Paychecks become points, and bank accounts become scoreboards.  An individual’s “worth,” or “value” in the eyes of Western society is often misunderstood as how much money one has.  The individual plays the game of participating in commerce, attempting to make informed choices amidst a barrage of targeted advertising and marketing campaigns.  For many, the game revolves around the notion of getting the most while spending the least.

The other side of this game is played by the corporate entity.  Businesses are constantly
looking for ways to make more money while spending less, and are realizing that the value gained from traditional advertising versus the cost and effort it takes to set up and maintain these campaigns is diminishing in the wake of the social web.  Naturally, companies are now turning to social technologies like Facebook and Twitter to directly engage their customers and promote their services or products to a vast network of people instantaenously.

The funny thing is, every business is different; every consumer has his or her own tastes,
and there is no apparent way to “win” this game.   Our culture likes to think that “winning” is the only option, and “losing” is a very, very bad thing.  Often, we find ourselves locked in the unsolvable problem of winning without losing, over-thinking and over-strategizing  instead of just doing and evaluating the results.

A consumer can be incentivized to refer friends online through social networks, but the messages that people share regarding products or services aren’t always positive, and a reward doesn’t necessarily change an individual’s negative perspective in most cases.  In fact, many of the larger corporations’ Facebook pages that I’ve seen, act as a way for the disgruntled consumers to vent their unhappiness directly to a company’s social marketing group.

I’ve spoken with decision-makers at enterprise-level companies who have expressed hesitance in promoting incentive programs through social networking channels for this exact reason.  There ends up being a sentiment of, “We will lose this game before we even start, because our page is full of complaints and unhappy customers.”  This may appear to be the case, but the truth is that there really isn’t any such thing as “losing.”

What is gained by creating and promoting a program that under-performs, doesn’t go anywhere, or is ultimately a failure?  Financally-speaking, money would be lost, but the true value comes from the knowledge and understaning of why the program did not work as expected.  A company may learn that their customers are not who they thought they were, and that a particular incentive is meaningless to them.  Or, a company may learn that their customers have not had a positive-enough experience to share it with friends and family.  These are valuable things to learn, and can be used to significantly increase the quality of a business overall, as long as the entity and its decision-makers remain open to critique and change.  This knowledge is, in the long-run, exponentially more valuable than money earned in the short term through a dissatisfied customer base that is just pursuing an empty cash-in.

Winning and losing, success and failure… these are all opposite sides of the same coin.  Failure needs to exist in order for us to know what success is, but that  doesn’t mean that something positive cannot be gained from a negative situation.  After all, it’s only a game, and no one gets better at games from winning all the time!   So, fear of failure should not be a barrier to learning more about your business or your customers.  Put things out there, give things a try, and by all means, don’t let your laundry pile up.  Do, and learn from experience.

Unconscious in Vegas: How word-of-mouth killed trade shows

The moment I realized I had hit rock bottom was in Las Vegas in 1994. It was at the software industry’s giant COMDEX trade show there. I was working for a company that made computer games for kids, and the star of our games was an animated otter. To get attention at the trade show, we hired a college mascot seamstress to fabricate a heavy otter costume out of fake fur and foam. A young woman employed at our company agreed to wear the costume, but it was warm in Vegas that November, especially in the middle of the packed convention center. You can predict what happened.  Within hours, we were handing the otter cold water to try to stabilize its internal temperature. The trade show was critical for us. We were launching new products. We verbally pressured the otter to keep going, to keep waddling and hugging trade show attendees. But by the second day, we had reached the breaking point.  I found our otter, in full costume, passed out from heat exhaustion on the floor behind our trade show booth.

But it wasn’t just us. In the years that preceded ’94 and the years that followed it, COMDEX became a ridiculous scene, ballooning to become the largest trade show in the world. Exhibitors attracted customers by any means necessary, often with tactics far more provocative than otter costumes. Eventually, the situation could not sustain itself. A backlash erupted from exhibitors, the press and attendees. Everyone bailed at once. And ten years later, things totally imploded. The largest trade show in the history of the world was cancelled in 2004.

And it wasn’t just COMDEX. Tradeshow attendance worldwide has tumbled in recent years. People point to virtual online tradeshows as the reason for this, but I don’t agree. I have never participated in an online tradeshow, and I don’t know anyone who has.

What really killed tradeshows is word-of-mouth marketing. Companies have found it exponentially easier to find new customers through their existing networks of customers, partners and employees. Email and social media have fueled this explosion, making connections easy and innocuous. Marketing managers no longer have to pay otters, magicians or porn stars to make their connections for them in a crowded room. Sales people don’t have to spend days walking hard convention center floors, searching for an old contact in hopes he’ll introduce you to someone else. With word-of-mouth, fueled by social media, the connections we make are easy; they can happen any time, and they seem to last forever.

This is especially true in business-to-business relationships. A solid, ongoing word-of-mouth program, where incentives are used to motivate customers to introduce new ones, is like a trade show that never ends. At Amplifinity, our customers for our B2B word-of-mouth social media applications are finding this is exactly the case.

And I’d rather reward a customer than shove an employee into an otter costume any day of the week.