Why you need referral software to grow your business
If you’ve visited our blog before, you know we write a ton about the value of referral programs. But it’s not just because we build referral software and tools to help; it’s because we believe so strongly in the value of referrals and we want to help organizations take advantage of this under-utilized channel. Throughout this article, we'll lay out why referral software should be a key piece of your marketing stack in 2019.
The cliche goes that people prefer to do business with those they know and trust, but the words ring true. Don’t we all want to do most things with people we know and trust? Why would purchasing products or services be any different?
We find it a bit shocking that so few organizations (less than 30%) have formalized referral programs as part of their marketing strategy. Referrals are an untapped growth opportunity that convert at higher rates than most other marketing tactics and help you acquire higher-value customers.
The numbers clearly show that referral programs are a superior channel for acquiring customers. Customers are 4 times more likely to buy when referred by a friend (Nielsen), 25% more profitable, and 4.5 times more likely to refer new customers (Wharton). And these are only a few of the stats - check out more on saasquatch.com.
Many organizations don’t have formalized referral programs simply because they can be more difficult to implement compared to other marketing programs. Once you introduce give-get rewards that need to be tracked automatically and scale with the business, it’s incredibly difficult to build something in-house. This is where referral software helps simplify things.
Where things go wrong
We work with lots of companies that run effective referral programs, but we’ve also seen our share of programs where things have gone wrong. Here are a few of the key mistakes people make when implementing new referral programs.
Not taking fraud and security into consideration
When things are given away for free, particularly online, people will attempt to take advantage of it. Fraud is something that needs to be watched closely, and it’s made infinitely easier with off-the-shelf software. Building fraud protection into an in-house solution takes a ton of development effort and requires continual updates.
Let a referral software provider worry about maintaining fraud and security protection so you can focus on growing your business.
Not designing programs for your customers
You need to understand your users and segment them based on what you know. Personalized programs and rewards provide the highest return. Most referral software offers the ability to run personalized programs, as well as test your efforts so you can tweak as needed.
Poor or inconsistent branding and UX
When delivering an online customer experience it lacks the human touch, making the experience that much more important. People not only expect a seamless experience, they expect consistency throughout every interaction.
Not promoting the program properly
Designing effective referral programs, like any marketing strategy, takes work. Too often brands create awesome referral offers, but fail to promote them enough, or in the right places. It’s key to promote programs strategically, consistently, and in a way that aligns with your offer and target audience. Check out this article for a free loyalty program promotion checklist.
Lack of visibility
It’s next to impossible to improve something that you don’t understand. Kicking off a referral program without a way to track its success is as bad as creating a program and not promoting it properly.
Referral software makes this a breeze. Most ship with included reporting and analytics dashboards that provide insight into all the important elements of your program. You’ll get visibility into all the key metrics of your programs - referrals sent, referrals accepted, conversion rates, rewards fulfilled, engagement across different channels, etc.
The best referral programs are agile and can adapt to the changing needs of a growing business.
Marketers know it’s onerous (if not impossible) to get access to development resources for marketing projects. For this reason, in-house programs are almost never enhanced or upgraded after the initial build. This can lead to a stale program that falls off the radar.
Where referral software comes in
Referral software brings the power of marketing and sales automation to the referral space. Marketers are used to working with Pardot, Hubspot, Salesforce and many more systems that help sales and marketing teams be more efficient.
Referral marketing tools provide an array of powerful features that allow you to automate complex referral programs with ease. You can tailor rewards based on a range of customer characteristics, reach people everywhere they are with omni-channel communication, streamline the process of reward fulfillment, and see detailed reporting and analytics on all your programs.
When we look at referral software in the context of marketing automation, we see them as complementary tools that can be added to any marketing stack. Referral software such as SaaSquatch will integrate with systems like Hubspot, Salesforce, Pardot, and a ton more to provide a seamless experience and visibility across systems.
Why referral software should be part of your marketing strategy
Referrals are under-utilized when it comes to growing businesses, and a large reason for this is that they’ve typically been too difficult to implement. Until recently, they had to be run manually and were not scalable.
The introduction of referral software has put the power to run referral programs in the hands of businesses of all sizes and technical sophistication.
Powerful tools, managed through intuitive configuration
Consumers today spend their time in a ton of different places online, across a range of devices, and referral software allows you to reach potential customers everywhere they are, with a consistent experience.
Many tools offer omni-channel messaging (i.e. continuity across mobile, web, email, and in-app) out-of-the-box. This allows you to build branded messaging templates and themes with intuitive configuration tools.
If you’ve designed and run an in-house marketing program of any kind, you know that they require a ton of effort. This is particularly true when it comes to reporting on the success of the programs. With integrations to your key business systems and customizable reporting, referral software gives you full visibility into your program.
Reporting and analytics often don’t have the proper importance placed upon them when building programs in-house, but their importance can’t be stressed enough. You simply aren’t able to improve the things you don’t measure and understand.
As we’ve touched on, developing fraud detection and security into internal solutions takes a substantial amount of up-front effort, as well as ongoing testing and updates to remain secure as technology evolves.
Referral software ships with advanced fraud protection and security controls that allow you to tailor your thresholds for suspicious activity and take the necessary action.
Implementation & Technical support
The cost to build, deploy, and maintain referral tools far outweighs the cost to license referral software.
When you buy software, you also get people on the other end that are there to help. Whether it’s getting your programs up and running, fixing an issue, or providing expert advice , being a customer of referral marketing software provides the added comfort of knowing someone will always be available. You’re able to avoid getting your developers to comb through custom code to find the issue.
Home-made referral programs and tools, while flexible, are extremely difficult to scale to meet the needs of large numbers of users. Referral software is tested to ensure your programs can scale to serve millions of users with programs of any complexity.
When you license referral software, part of your money goes towards R&D, providing continual improvements to the software - all delivered at a rapid pace and without interruption to your users.
You won’t need your team to determine where there’s room for improve, then implement those improvements. A team of developers are working for you when you’re a customer of a company such as Referral SaaSquatch.
Companies seeing success with referral software
Teach Starter’s subscription service provides premium primary school teaching resources to teachers all over the globe. What started as a free monthly email has grown to more than 130,000 pages of content that helps teachers save an estimated 40 million hours of prep time each year.
Teach Starter wanted an easy way to let their customers refer their friends and put a system in place to reward them for their generosity. Teach Starter was able to connect Referral SaaSquatch to their billing system, Recurly, seamlessly and get a referral program live within a few hours. In the three years since, Teach Starter has been able to consistently acquire 23% of their new users through referrals.
Hungry Harvest is a farm to doorstep produce delivery service on a mission to end food waste and hunger. So far, Hungry Harvest has rescued over 9 million pounds of food from going to waste & provided access to over 800,000 pounds of fruits and veggies to those who are food insecure.
Hungry Harvest has been experimenting with different growth strategies, and have seen an excellent return from their investment in referral marketing software. With a bit of help from Referral SaaSquatch to build a custom theme, and the overall ease of implementation Hungry Harvest was able to get a give-get $5 referral program running quickly.
99 is the largest on-demand transportation service operating in Brazil. They’re leading the transformation of urban mobility in Brazil with their mission to make it cheaper, faster, and safer. Currently operating in more 550 cities, 99 app serves millions of passengers with the largest fleet of registered taxi drivers in Brazil.
When 99 came to Referral SaaSquatch in March 2017, they were running an internal referral program that was underperforming, largely due to limited development resources. On-demand services rely on referrals as a key component to growth and it quickly became a priority for 99 to revamp their referral program.
99 was able to build a double-sided referral program (for both drivers and passengers), and has seen tremendous results - 5% of 99’s daily user growth is being driven by their referral programs.
Getting referral software up-and-running
We’ve all been there: we’re excited about a slick new tool we purchased, only to find out it’s way more complicated to implement than anticipated, and you’re on the hook for a ton of extra work for something that’s supposed to make it easier.
Different software solutions for different business applications range significantly in terms of the effort required to implement it and how long it takes to see success. Below we’ve broken down what’s really involved with getting your referral software working.
Implementing referral software would be similar to implementing a marketing automation system such as Pardot. There’s some initial effort required up-front to get everything configured properly for your business.
Referral SaaSquatch’s implementations begin with a consultation on the customer’s referral strategy so the team can create a project and technical documentation for the implementation. The team at Referral SaaSquatch then works closely with the customer as they integrate, test, and deploy their referral programs over the following weeks.
Implementation of a referral software platform ranges significantly depending on the size and complexity of an organization, as well as their ability to align resources. Implementations can take anywhere from 2-8 weeks. One way to ensure a smooth process is to have a well-defined plan in place and buy-in from your technical team ahead of implementing a new system.
Referral software (like most SaaS platforms) bill on a recurring subscription basis, usually billed monthly or annually.
There are a range of systems available that offer varying prices. Referral software can serve everyone from small 1-2 person startups, all the way up to fortune 1000 companies.
Costs range from $49 to thousands of dollars per month. Prices vary based on the functionality and support provided, as well as the size and complexity of programs it can serve.
Having implementation and technical support can be invaluable when issues arise or you want to get a new program off the ground quickly.
Developing referral and other marketing programs in-house used to be about cost savings and flexibility. But the platforms of 2018 provide the same flexibility at affordable prices. Plus they come with added support for implementations and technical issues.
Ready to get started?
We hope that the information above has given you enough to see the value of adding referral software to your stack. If you want to see if SaaSquatch is the right fit for you request a demo here.