Referral marketing programs can be a powerful addition to your marketing mix. After all, 84% of people trust recommendations from people they know, making them the most influential form of advertising. Businesses interested in such programs must decide whether to build them in-house or to find external support. In this blog, we discuss why outsourcing is a solid option and how to go about choosing a vendor.
Marketing budgets are shrinking — budgets have fallen to their lowest recorded level, from 11% of a company’s total revenue in 2020 to 6.4% in 2021.
The costs of an internal referral program can quickly add up — they typically require a huge amount of internal resources from different departments — from additional customer support to finding resources to enable reward payments. In addition, internal programs are also hard to scale.
In contrast, many brands find it more efficient and cost-effective to outsource their referral programs. An external partner can develop the platform, and handle many different aspects that would otherwise require many internal resources such as payments, customer support, fraud detection, etc.
Let’s say that you want to get started quickly and use your resources for other purposes. After deciding to go with an external solution, how do you choose the right vendor? Here’s what to consider:
1.Pricing — Don’t lock yourself in. Choose a partner that bases their pricing on the performance of your programs. This minimizes the risk of spending your marketing budget and not seeing any ROI. In this way, you also make sure it’s in the interest of your partner to make it work, or else they don’t get paid.
2. Managed services — Do they provide an all-in-one solution? Things like customer support, payments, fraud, or account management are essential when running referral programs. Look for a partner that can offer ongoing support — whenever you and your team need it.
3. Usability — Is the platform easy to use? How fast can you get started?
4. Personalization — Is the platform a great fit for your industry and customers? Does it offer the incentives you want? Will they adapt their platform and follow your brand guidelines? If they don’t offer you a white label solution, shop somewhere else. It’s important to offer your customers a seamless experience.
5. Scalability — Can the platform support and optimize your referral program as you scale?
6. Purposes – If you would like to use incentives for purposes other than referral marketing, such as to upsell & cross-sell or use loyalty programs, consider looking into customer incentives platforms like Aklamio.
Once you have your marketing programs in place, you’ll need to ensure that they succeed. Spreading the word about the roll-out of your programs – internally and externally – is vital. Find out how to effectively educate your key stakeholders in the upcoming blog.
Looking to find out more about how Aklamio can help make your referral program a success? Reach out to us here.
May 20, 2022
May 17, 2022