Top 5 Predictions for Customer Referral Programs in 2014

2013 was a dynamic, fast paced, and disruptive year for fields such as online marketing, growth hacking, and SEO. The evolution in these fields changed the way companies develop brand awareness, acquire customers, and grow their revenue. However, with all the advancements in 2013 the majority of companies continued to run very standard customer referral programs.

I believe in 2014, word of mouth growth channels will become increasingly important to subscription services and will rapidly increase the rate of evolution of customer referral programs.

Only time will tell exactly what this evolution will look like, but here are my predictions for the top 5 referral program evolutions in 2014.

#5 User Experience

There was a time when it was considered acceptable to require customers to re-enter their name and email address, create a separate account, and even go to a 3rd party sites to make referrals. This belief is dying fast as users expect simple, seamless, and sexy experiences in all aspects of a web app.

In 2014 we will see drastically smoother user experience in referral programs. Single sign-on will be a must, workflows for making referrals on social media and email will be simplified, and users will have more opportunity to understand and influence their progress towards earning rewards.

We will see a reduction in the over use of blunt gamification hammers such as badges, experience points, and titles. These techniques will instead be replaced with more subtle and natural feeling implementations of these psychological tactics.

#4 Specialization

Customer referral programs were created long before the Internet and subscription services existed. This long history proves that referral programs can work year after year for a diverse range of businesses. However, the specific techniques and program details used historically were not designed for subscription services and in turn often don’t produce the best results.

In 2014 as companies look to maximize the impact of their referral programs they will prefer to use solutions that are designed from the ground up for them. These programs will be designed to support their business models, compliment their product, and utilize modern word of mouth best practices.

#3 Marketer Maintained

Historically online customer referral programs were dreamt up by the marketing team, built by the development team, and then left to collect dust because the marketing team couldn’t get more development time to improve them. This reality will be unacceptable in 2014 as marketers use more tools that allow them to maintain their marketing programs instead of developers.

In 2014 we will see the responsibility to update and maintain customer referral programs shifting from development to marketing. This will require a different set of tools to address the gap in technical ability and the desire for different administrative features. Further, this will make for more dynamic and optimized customer referral programs becoming the norm.

#2 Analytics

In 2013 the majority of companies that we spoke with had little to no analytics capabilities inside their existing customer referral program. This was typically due to a product management decision to cut analytics in order to reduce development time. If you assume that referral programs are built, deployed, and never changed this is a logical decision. However, in 2014 this will not be acceptable logic.

The desire for marketers to quickly design, build, and run test increased significantly in 2013. It will be considered a given for most digital marketers in 2014. In order to operate a customer referral program with this mentality, a complete analytics suite will be required.

#1 Deeper Integrations

As the number of different tools used by online marketers continues to increase, the data collected inside each of these tools is becoming more fragmented and disparate. By creating these islands of user data, marketers are left with an incomplete view of their users. Without a complete view of a user it becomes near impossible to make the best sales, and marketing decisions. This is especially true in the highly automated sales and marketing environment that most web companies operate in.

While islands of user data are an industry wide problem, I believe we will see customer referral programs addressing it in 2014 as a logical part of their evolution. In order to address this problem we will see customer referral programs integrating with a wide range of marketing tools. If utilized fully, these integrations will drastically increase the effectiveness of customer referral programs.

What are your predictions?

These are my top 5 predictions, what are yours? Feel free to share them with us on Twitter @getSaaSquatch.