What’s Inside? Here’s a peek into our main findings:
Opportunities exist for companies who don’t see referrals and rewards as one-size-fits-all.
Only 13% of referral programs are created with a tiered structure to offer different rewards for different referrals. For example, these programs offer a lower reward when a lower-value prospect is referred, and a more lucrative reward when a high-value prospect is referred.
Tiers are a heavily underused component of referral programs today, even though they present the opportunity for a better return on investment (ROI) and more program engagement. When they can be implemented, there’s no reason to have a static, one-size-fits-all program.
Referral programs are widely adopted as a revenue-generating strategy.
The majority of today’s referral programs are used to directly increase revenue, indicating a consensus that word-of-mouth marketing is a topline revenue strategy.
With over 50% of referral programs using dollars of credit as a reward, and 90% of programs relying on a purchase to define a successful conversion, businesses are using referral programs to encourage spending from new and existing customers.
Referral programs are universally understood as a two-sided initiative.
Over 90% of referral programs are double-sided. Program designers believe that there is value in rewarding both the promoter and the referred friend. Whether the two rewards need to be equal is up for debate, as there’s no clear stance on whether the promoter or referred friend should be favored, if at all.
The overwhelming tendency to create double-sided programs tells us that companies understand that referral incentives must play to the needs and desires of both the existing and new customers. Without motivation for both the promoter and their friend, chances of successful referrals are heavily impaired.
We invite you to dig into the results of this year’s State of Referral Marketing by downloading the full report here! Tweet us with your thoughts and what you’d like to see in upcoming reports.