12 questions to ask your referral marketing provider
Read time: 10 mins
You’ve done your homework. You’ve researched marketing channels and know your business could acquire 30% more customers with the right referral provider. Now you just need to find it.
Except now you’re looking into it, you realise there are a lot to choose from. Each referral provider has its own unique selling points, complete with various pros and cons. All you want is one that’ll make your brand look good to customers, and you look good to your boss. But finding the right one is starting to feel like a full-time job of its own.
If all this sounds familiar, we’ve got you covered. Read on to discover the 12 questions to ask any potential referral providers, complete with the answers you should be looking for – and the ones you should run a mile from.
How much work is it to set up?
Before signing on that dotted line, make sure you know exactly what setting up your referral programme will involve. Referral providers offer varying levels of complexity and support with set up, so making sure you have the right resource – people, skills, time – to get up and running is essential. Otherwise, you could end up wasting valuable budget on a referral programme that never gets going.
How much support will you give my referral programme?
Make sure you’re clear on how much hands-on support you’ll get once your referral programme is up and running. Will you get strategic guidance on A/B testing? Will you have to create your referral designs in-house? Will you have to manually pull and analyse reports?
Referral providers will offer different levels of support. Simple widgets tend to be entirely self-serve; others provide dedicated account managers. Our team of dedicated Referral Experts are there to help you every step of the way, from onboarding to optimising your programme. Other providers offer significantly smaller teams, often with just a few people juggling multiple roles and responsibilities. Discuss this with your colleagues and potential referral provider to find the right level of support for you.
It’s also worth asking the provider what they’ll offer beyond hands-on support. As well as providing strategic guidance, customer support and best-in-class designs, we regularly lead client workshops, hosts thought leadership events and shares insightful content on trending topics.
What sort of businesses do you work best for?
If the response you get to this is ‘every business’, alarm bells should start ringing. Like any other business, the best referral providers know their perfect customer – and aren’t afraid to admit when they’re not the best match.
Our platform, for example, works best for ambitious, fast-growing online and multichannel brands looking to accelerate growth online through the power of advocacy. If you’re an online brand with strong monthly order volumes and happy customers, we can confidently tell you that we’d probably work very well. If you’re a telecom, B2B or predominately offline business, we’ll come right out and say you’d be better suited to a referral platform that specialises in those industries.
But when it comes to sectors within ecommerce, you’d be surprised by how broad our client base is. From financial providers to travel brands, referral generates powerful results for more sectors than you might expect.
Nutmeg grows its customer base through referral
Can I see a demo?
Just like you wouldn’t buy a car without taking it for a spin, you shouldn’t agree to splash out on a referral platform without seeing how it’ll look to your customers. Ask if you can see a demo. If the answer is no, end the call as soon as possible. If the answer is yes, tune in and keep your eyes peeled. Does the programme fit seamlessly into your customer journey? Does it look on-brand? Or does it feel like a clunky add-on?
The most effective referral programmes run smoothly as part of the customer journey, enhancing (not damaging) the shopping experience. Bear this in mind throughout the demo and ask yourself: if I were a customer, would I click through and share this brand with a friend?
You might also find it useful to see a live referral programme on a client’s site as a real customer yourself. Next time you’re shopping and see a referral overlay you like, look out for the provider’s name. We’ve welcomed a number of new clients after being spotted out in the wild.
What kind of results can I expect?
Any referral provider worth your time and budget should be able to give a business forecast outlining the results you can expect from your programme. The best providers will align that forecast with your key business goals and the metrics you measure success against. If, for example, new customer acquisition is a priority, they’ll focus on metrics showing the predicted uplift in acquisition from your programme.If those forecasted results look too good to be true, ask to see case studies that show how referral is working for businesses like yours. In fact, ask to see case studies whatever your forecast. These real-life examples of how referral works for other brands will give you valuable insight into the impact an advocacy-first approach could have on your business.
There are, however, a few things to bear in mind when talking about predicted results:
- Every business is different. Countless variables can influence your referral results: your sector, your incentives, promotion points… the list goes on
- Referral programmes take about six months to gather pace with A/B testing. Our clients typically acquire twice as many customers in months 7 to 12 than in the first six months
- Optimising your programme is crucial to driving maximum value. You could have the newest, most impressive referral platform out there, but if you’re not optimising it, you may as well have gone for a bog-standard widget. Which brings us nicely to our next question…
How important is A/B testing?
If you don’t have a high enough volume of monthly orders to achieve statistically significant results from A/B testing your referral programme, you’re wasting your time. Any referral provider that tells you otherwise is simply looking to make a quick buck.
But the devil is in the detail here. A/B testing alone won’t make your referral programme fly. The question you really need to ask: do you offer A/B testing by cohort?
Without A/B testing by cohort, you’ll simply be running tests one after the other, with no real way of knowing what’s influencing your results. Sure, it could be your new incentive increasing referrals, or it could be that people have started their Christmas shopping. Even worse, if shoppers see different referral rewards across your site, you’ll be serving an inconsistent customer experience that’ll put them off recommending you to friends.
When testing by cohort, however, you can know for certain which variables are producing which results. You can also pinpoint exactly what’s working to acquire higher-quality customers (aka those who keep coming back and introducing others). By continually experimenting with every element of your referral programme, you can quickly learn what makes your customers tick. You can then apply these findings to your entire marketing strategy, from updating your website imagery to tweaking your email copy.
That’s not all. A/B testing by cohort also lets you find the most effective referral reward for driving both new customers and profit. While a higher incentive might drive more customers to share your brand, you may find that the lower incentive offers similar returns in terms of how many referrals convert into new customers. So you can protect your margins by going with the smaller incentive, safe in the knowledge that you’re not losing out on new customers.
What about customers who don't refer?
Here’s where it gets really good. Despite what you might think, a referral programme isn’t just effective for those customers who love your brand enough to introduce friends. A sophisticated customer advocacy platform equips you to drive value from every single customer, not just those ready to refer.
By targeting customers based on their propensity to refer, you can put would-be referrers on the path to becoming fully-fledged brand advocates. For those customers who need a bit more of a nudge before they’re ready to shout about your brand, you can encourage actions such as newsletter sign-up or discount on their next order. All while experimenting with the content that most effectively turns customers into your biggest cheerleaders.
How will referral fit into my tech stack?
Done right, referral doesn’t just have the potential to become one of your most high-performing marketing channels. It also has the power to amplify your entire martech stack.
To do this, you need your different channels to work in harmony. Otherwise, you could be spending hours manually uploading data, or simply missing out on valuable customer insights.
Speak to your potential referral provider about this, and see which solutions their platform integrates with. To give a comparison, our Optimise package integrates your referral programme with best-in-class tech partners including Klaviyo, Emarsys and Ometria.
With these integrations, you can serve your customers an ultra-personalised referral journey that drives even more engagement. Not to mention, you’ll be feeding valuable referral data into your marketing automation platform in real-time, so you can segment your referring customers and give them the VIP treatment.
Find a provider that integrates with platforms such as Feefo and Trustpilot, and you can bring together the power of reviews and referrals to turn customers into brand advocates when they’re at their happiest.
How will you make sure we only reward genuine referrals?
Picture this. You proudly tell your boss that your referral initiative has delivered 3,000 new customers this month. “That’s great,” they say. “But how do you know all those referrals are genuine?”. And just like that, your fantasies of a generous bonus vanish into a puff of smoke.
Ask your potential referral provider this question before your boss can, and make sure your business forecast only factors in genuine referrals. There’s no point getting sign-off on an impressive forecast if it’s not fully legit. You want to launch your referral programme with full confidence that you’re only rewarding genuine referrers and new customers.
A good provider will respond to this question with an explanation of what they use as a unique identifier. For example, we use customers’ email addresses.
Can customers share by name?
When you start talking sharing methods with your potential provider, drill down into the specifics. There are plenty of ways customers can share your brand (we offer 10 sharing methods — and counting), but it’s important to use the ones that will resonate most with your customers. Rather than guess what these methods are, A/B test to know for sure.
There is, however, one method that outshines them all: Name Share®. It accounts for a whopping 34% of referrals across our 450-strong client base.
Name Share® lets customers refer your brand simply by telling friends to enter their name at checkout. Without it, you’ll miss out on leveraging the recommendations your happiest customers are already making in everyday conversations. Telling someone to enter code Xkl82BmD9n-0 after they compliment your trainers doesn’t quite roll off the tongue the same way.
Farfetch encourages customers to make recommendations in everyday conversations through Name Share®
Can you compare my referral performance to competitors'?
Knowing how many of your customers are recommending your brand – and how many of these recommendations are converting into new customers – is good. Knowing how that compares to other brands in your sector is even better.
Ask your prospective referral provider how they’ll benchmark your performance. Do they have sector-specific reports featuring average share and purchase rates? Bespoke reports for your brand (and other brands like you)?
We analyse all our data from working with 450+ brands to provide in-depth benchmarking reports and guidance on how brands like yours can level up referral performance.
How can I report on our referral performance to internal stakeholders?
To prove the value of your referral programme, you need to be able to clearly report on performance to the wider business. That’s not easy if you’re faced with a complex platform listing endless numbers and hard-to-read metrics.
When looking for your referral provider, decide which metrics matter most to you beforehand. See if your potential provider displays these in the platform in a way that’s easy for you to report, so you can know for sure how your efforts feed into your biggest business priorities.
Our platform features a dashboard with high-level numbers, such as new customers and referral revenue, but users can also dig deeper into specific areas. Plus, we provide bespoke reports, ranging from snapshots of monthly performance to in-depth analysis of your best customers, so you can use these insights to superpower all your other marketing efforts.
There you have it, 12 questions to ask your referral provider. If you’ve made it all the way to here, you’re obviously serious about finding the right one. Bookmark this blog and return to it every time you have a demo call. It won’t be long before you find your ideal match.