19 minute read
If your brand is already bringing in happy customers, you may wonder why you need referral software to grow your business. The truth is referral marketing programs drive revenue. And, as a marketing manager or executive, it’s your job to prove that you're helping drive revenue. But how can you make the argument for software to scale your referral program when it’s still considered a nascent category?
The short answer: Referrals deliver proven results.
Research has consistently shown that customers — in both B2B and B2C markets — are not only willing to refer businesses to their network, they’re looking for new ways to do it. Furthermore, our own research with Nielsen’s Harris Poll found that the vast majority of consumers (82%) seek recommendations from their network before making a purchase.
And marketers can never get enough referrals. We know they're gold. And research backs this up.
As researchers from the Harvard Business Review put it: If you’re not proactively seeking ways to generate referrals, you’re likely ignoring opportunities to drive “stunning profits.”
So, why do so many companies treat referrals as a nice-to-have supplement to their many other marketing initiatives, instead of the revenue-driving behemoth it could be?
The answer, very simply, is that many marketers mistakenly assume that referrals just happen. They implement a referral program, enroll only their “best” customers, send a few emails, and expect the ensuing momentum of organic advocacy to take care of the rest.
Problem is: Like all other high-value marketing channels, referral marketing doesn’t work like that.
That said, the issue has always been that driving, managing, and optimizing referrals has been incredibly difficult at any sort of scale. In fact, until now, most marketers relied on spreadsheets or some sort of wonky homegrown system to manage the process.
The result: Because of the manual effort that approach to referral marketing requires, you and your team don't put much of an effort into building a scalable and effective program. As a result, you end up leaving money on the table — money your competitors are using to steal market share from you. But when you automate many of the manual intricacies that marketers face, you remove the roadblocks to success.
At the end of the day, referrals are like any other high-value channel. You wouldn’t start a blog, publish a few posts, and then immediately expect to see a flood of new leads. Likewise, you wouldn’t make a few tweaks to your website’s copy and suddenly expect to rank first for a highly competitive keyword.
Referral marketing is no different. In order to truly scale this customer acquisition channel, you need to develop a referral strategy and invest time and resources.
Now that we covered why you need referral software to grow your business, let's talk about what to look for in a vendor.
When it comes to making smart marketing investments, choosing the right technologies is mission-critical. It's important to find the right fit, ensure your marketing budget delivers maximum ROI, and drives optimal business outcomes.
To help make the vendor selection process easier for you, I’ve compiled a short list of best practices to ensure you buy the best product to meet your needs.
Here are 6 steps to finding the right marketing technology vendor for your brand:
1. Establish your goals. Before you can choose a vendor, you need to have a very clear picture of what you’re trying to achieve. Researching a product and/or category is a part of the puzzle. But another piece is learning from the vendor what’s realistic to expect from their offering. This one-two punch of research and advice from a consultative sales person is invaluable when determining your goals. Whatever the case, be sure to have a precise idea of what your goals are and how you expect this new technology to contribute to meeting them.
2. Request proof. Ask to see case studies from companies similar to yours that have accomplished what you aspire to do by using the platform or solution.
You’ll want to find out about things like:
- The ROI they’ve achieved using the platform
- Their satisfaction with the level of support they’re receiving
- Whether the product has evolved over time to better meet their needs
- If the vendor is responsive to questions and effective at troubleshooting issues
- Whether they’d recommend the vendor to others without hesitation
3. Ask a lot of questions. The more you learn up front (and I can’t stress enough the importance of a helpful, consultative salesperson), the easier it will be to make an informed decision. So when you’re evaluating a potential vendor, come prepared with a detailed list of questions. Some of the things you should ask include:
- What extra work, if any, will be required to get the technology up and running so that it will do what you need?
- Does using the technology require any special skill sets (like coding) that you don't have on your team?
- Are any third-party integrations required to get all of the functionality you’re after?
- Can the product easily be customized? If so, will that cost extra?
4. Ask about future product developments. Doing so is worthwhile because it ensures your use case will be supported as the company grows, while also giving you insight into what’s on the horizon that might be of interest to you. This is especially important if you’re buying a product for a specific feature (or the promise of one that's coming). If a vendor can't answer this question, it could indicate that they don't have a clear vision for how they'll improve the product and the value you extract from it.
5. Find out what the product’s average downtime was over the past year. Taking a cue from point three, ask a lot of questions. Segue from uptime percentage to learning how upfront and proactive the company is in communicating with customers when issues do occur.
6. Understand what types of support and service are available. Before you make a decision, make sure you understand the difference between customer success (more proactive expert coaching) and customer support (more reactive troubleshooting), and where your vendor falls on that service spectrum. Just as importantly, you’ll want to find out if experts are available to help you to achieve your goals. It’s critical as these experts (sometimes referred to as success coaches) are well-versed in best practices and capable of helping you be much more successful than you could possibly be without them.
Can referral software solutions grow your business?
Using Ambassador referral marketing automation, we routinely see customers across multiple industries — fashion eCommerce, solar, B2B software, health and fitness, online mattresses, etc. — achieve 600% or greater ROI through referrals. And that success isn’t a fluke. In fact, one of our customers is achieving 300% higher conversion rates from referrals over all other marketing channels combined.
So, here’s my advice: Take a long, hard look at your "set in stone" budget for this upcoming year. And ask yourself this question: "For the cost of the right referral marketing software, are there areas from my budget I should cut to make room to purchase this software now?"
If the answer isn't “yes,” I'll be shocked.
Keep in mind that the goal isn’t to rob Peter to pay Paul. Instead, what you're doing is redirecting your marketing dollars to a channel that you know — and studies confirm — is far more effective at creating awareness, driving leads, and generating revenue. When you do that, your dollars will work harder and smarter, and you’ll see much bigger results.
As marketers, we know that paid advertising and other forms of “modern” marketing are not as effective as they once were. Would you spend $40k per month on AdWords when you could generate far better results through referral marketing — for a much smaller investment?
This is why I encourage you to take a look at your strategy and re-evaluate your budget.
If there are areas that are underperforming, cut them and re-direct your investments to referrals. Because if and when you find the right referral marketing software partner (one with the right platform and great support), your only regret will be that you didn't learn about it earlier.
Are you ready to get more from your referral marketing program? Download The Definitive Guide to Building a World-Class Referral Program eBook below. It’s full of tips, tactics, and strategies to help you optimize referral results, as well as simple takeaways that you can easily incorporate into your marketing strategy today.
Posted January 23, 2020 in Referral Marketing