Marketing changes every day. Just a few years a ago, a flashy street-side sign advertising your company’s name and location was enough to attract new business. Even a print ad in the Sunday paper was sure to remind your closest prospective customers to stop by your brick-and-mortar store. Over the last few years, marketing - along with its platforms, audiences, and capabilities - has advanced.
A recent survey from Smart Insights pinpointed marketing automation as a leading digital marketing activity with great commercial impact. A host of other marketing offerings also promise to provide streamlined approaches to solving your brand’s pain points, so choosing just one can seem like a daunting task.
One such solution is referral software. There are a few questions you need to ask yourself before finding the right platform for your business: Will referral marketing really work for my company? How will my customers respond? What’s the ROI?
At the root of each of these questions is the desire to unlock a few essential results. Namely, building brand awareness, attracting new business, and finding a cost-effective way to drive more revenue.
Even as the methods for reaching today’s digital audiences and measuring engagement change, some things stay the same. So what’s the mainstay that brands with some of the most successful referral programs have uncovered? Customers overwhelmingly prefer cash for referrals.
According to a recent survey conducted online by Harris Poll on behalf of Ambassador, 88% of Americans say they would like some sort of incentive (money, product or service, loyalty points, early access, swag) for sharing a product via social media or email. That number jumps to 95% among 18-to-34-year-olds. The survey goes on to reveal that 77% of Americans identify money as their reward of choice.
Okay so maybe it’s a not a groundbreaking discovery, but this simple secret is the route for success that both B2C and B2B brands tend to overlook when choosing a referral marketing incentive. Monetary referral rewards aren’t just important, they’re more effective than any other incentive. Here’s why your brand should be offering cash for referrals:
The inability to prove ROI and overall effectiveness is a common problem with most marketing solutions. Innovative automated referral software programs empower brands to create a direct link between brand ambassadors and new revenue.
This connection is extremely insightful for the consumer-facing strategies that drive eCommerce companies.
The participation and conversion metrics by our most successful eCommerce customers.
Our eCommerce companies experienced a revenue spike in the first 6 months after launch then increased nearly 3x between years one and two.
Point programs, discounts and branded swag may sound cool on a company website, but it's hard to equate these rewards to the real-life value that customers have when they recommend your business to others. Luckily, referral marketing creates a measurable link between existing customers and the business that they are generating. At its core, referral marketing is a numbers game. Accessing the cold hard facts of your program makes it that much easier to choose cold hard cash as a logical rewarding method.
Takeaway: Meet your Ambassador’s conversion-driving shares with a comparable reward that honors their work and encourages them to keep sharing.
It may seem like referral marketing commissions would be a bad fit for B2B brands, but we’ve found the opposite to be true. Even with longer sales cycles and higher customer LTV, B2B companies are experiencing successful referral results. In fact, the first few months following program implementation have proven to be a pivotal period for firing up referrals from happy customers.
On average, our B2B clients have experienced a 350% average ROI in the first year.
Our B2B clients have seen a 5x increase in revenue growth during the 6 months following implementation.
B2B brands that want to create a rich journey toward their products and services and attract quality business, must start by treating their existing customers to a reciprocally rewarding exchange. As a rule of thumb, advocates driving business dollars your way should be simply and valuably rewarded with cash that reflects their hard work.
Takeaway: Replace your manual rewards program with referral marketing commissions to elevate the relationship between your brands and its fans.
Getting More Referrals
It may be a new age for marketing, but cold hard cash is still the easiest, most familiar and most direct way to reward your advocates. Automated referral marketing empowers companies to improve existing customer engagement and new customer acquisition while furthering brand awareness. No matter the industry, providing monetary rewards to loyal customers is the perfect way to incentivize referrals.