Referral marketing automation is the process of using tools to improve and scale your referral program through enrollment, rewards, and optimization.
The Right Way to Enroll, Segment, and Engage Your Brand Ambassadors
To auto-enroll, or not auto-enroll. If you have a gated referral marketing campaign, here's some food for thought...
In the referral marketing world, there seems to be a debate brewing over the most effective way to identify, enroll, and engage ambassadors.
In one corner is the belief that carefully enrolling only your most loyal and passionate ambassadors is the best approach. The thinking here is that those people, who already love and support your brand, will happily and aggressively work to generate referrals and new business for your company.
In the other corner is the somewhat contrarian stance that auto-enrolling all of your potential brand ambassadors is the better strategy. The argument being that until you get a referral marketing program running at full speed, you can’t — and shouldn’t — assume that you inherently know who your most passionate advocates will be.
So, where do we fall on that spectrum? Much closer to the latter strategy than the former.
The Argument for Auto-Enrolling Everyone
Why does auto-enrolling make sense?
It’s simple: We’ve found that, regardless of how much time you invest in studying your contact database upfront, it’s virtually impossible to predict who your best ambassadors will be. Sure, repeat customers and engaged fans are safe assumptions, but you’d be surprised how often referrals come from people who don’t fit that profile.
For instance, you might not expect a random one-time shopper who falls outside of your target demographic to be a productive ambassador, yet we’ve repeatedly seen that scenario play out. In fact, just one share from a non-obvious ambassador can open the door to a whole new market, audience, or industry to deliver surprising results (that’s exactly what happened with our own referral program).
Now, that’s not to suggest that the bulk of your referrals won’t come from power users, big spenders, trusted friends, and long-term customers with high NPS scores. That might very well be the case.
But with that said, why rule out the possibility of referrals coming from people and places you never expected?
Auto-Enrollment Does Not Mean Generic
It’s important to point out that auto-enrolling doesn’t mean opening the gates to the masses and blasting them with the same, generic messaging. Allowing everyone to access your program is one thing. Creating custom referral programs for a variety of customer segments within that pool is quite another.
With the latter, the idea is to personalize campaigns, messaging, and incentives to the specific interests and motivations of each type of ambassador. After all, it’s likely that your happiest customers (the “Promoters” in the Net Promoter Score framework) will require less motivation to sing your praises to their network. Fans and followers who aren’t paying customers, on the other hand, will need a little more nudging (and, typically, more tangible short-term incentives).
That said, it’s important to once again warn against making assumptions.
Instead of jumping to the conclusion that a long-time customer will be your best ambassador, the goal should be to study referral activity over a period of time and use that data to develop hypotheses about how, when, where, and why ambassadors promote your brand. Ultimately, this will make it easy to lump people into reasonably accurate segments that can be targeted with unique campaigns, messaging, and referral incentives.
For example, you might find that your brand ambassadors fall into the following categories:
- Longest-time customers
- New customers
- Past customers (a referral program is a great way to re-engage them)
- High NPS customers
- Highest spenders
- Partners or re-sellers
- Fans, bloggers, and influencers
Or, your list might look very different based on your industry and category.
That said, doing this work will allow you to perpetually test different messaging, incentives, and channels with each audience. And from there, you can easily evaluate the specific factors that drive the highest number of desired outcomes. Over time, this will help dramatically improve the results of your referral program.
Numbers + Relevancy = Powerful Results
In our experience, referral marketing success is almost always driven by a scientific blend of quantity (participants) and relevance (messaging and incentives). When companies add as many potential brand ambassadors as possible to the top of their referral funnel and they are relevantly rewarded for their ambassadorship, good things happen.
Let’s say you sell solar energy systems directly to consumers. Instead of limiting your program to existing customers and incentivizing it with a coupon for 20% off the referrer’s next purchase (we only buy solar energy systems once every decade or longer), you’d see better results with more expanded outreach and a more relevant offer.
For example, you might open the program to contractors, environmental activists, and energy efficiency bloggers, and offer a dual-sided incentive that gives the referrer a cash bonus and the referee a 20% discount on their purchase. There’s also a high likelihood that you have fans of your solar energy systems who have never bought from you before but aspire to someday. The chances are good some of them will be excellent ambassadors for your brand.
Now, think about the impact you could have by reaching out to your highest-performing brand ambassadors to personally thank them for delivering a referral. This could come in the form of a simple call, email, handwritten letter, or special gift based on the ambassador’s interests (e.g., early access to new, high-demand products). Over time, that kind of effort and attention to detail pays huge dividends.
Think that’s impossible to accomplish at scale?
That’s the beauty of referral marketing automation. Enrolling ambassadors is simple. Segmenting ambassadors by specific attributes and customizing campaigns is easy. Optimizing campaigns is straightforward and pays huge dividends. And managing the referral tracking and rewards process is completely automated.
As you’re building your referral program, don’t waste your time making assumptions about who will best help to grow your business. Instead, focus your time, energy, and talents on creating messaging and referral incentives specific to each customer segment. Then, focus on optimizing those referral campaigns after they’re live and you have real data to work from. You, and your bottom line, will be happy you did.