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Referral Intelligence®: Actionable Customer Insights

Sophia King
By Sophia King — October 26, 2021 -

High performance marketing needs high performance data – but, thanks to rising consumer distrust towards advertising and the regulator-mandated abolition of third-party cookies, that sort of data is getting harder for marketers to come by. 

We come bearing fantastic news: there’s another, as yet largely untapped source of first-party data that marketers can use – and this stuff’s jet fuel for marketing performance. 

It’s called Referral Intelligence®, and this blog is going to tell you all about it. We’ll run through: 

  • What it is – and how it’s produced
  • Why it’s so uniquely valuable
  • How you can use it to make referral marketing work better
  • How you can use it to make your non-referral marketing work better

So, first things first: what is Referral Intelligence®? 

Glad you asked. Referral Intelligence® is our name for the data-based insights into your customers produced by the process of Referral Engineering® – our disciplined, data-led approach to referral marketing.

When referral marketing really works it delivers amazing results. We’re talking 10x ROI from your referral marketing channel, first order value climbing on average by 11%, customer acquisition shooting up to (and over) 30%... We could go on (believe us).

But all too often, referral marketing doesn’t work. Businesses approach it not as a channel but as a plug-in – and use ‘simple’, plug-in referral widgets to try and get it done.

These widgets use a blunt ‘one-size-fits-all’ approach, treating every customer as if they’re the same. They don’t draw on – or produce – accurate, actionable data on how each individual customer interacts with and responds to offers of referral at different points in their journey.  

By contrast, Referral Engineering® produces and uses Referral Intelligence® (combined with expert knowledge around the psychology of referral) to optimise referral for each and every customer.

How Referral Intelligence® reveals your customers’ real value to your business

Referral Intelligence® doesn’t only feed back into referral marketing. It gives you a far more detailed picture of your individual customers, at scale, than you could otherwise get – which you can then feed into your wider marketing tech stack, to often astonishing effect.

If your brand is like most brands, your primary goal from tracking and being guided by data is to raise one metric in particular: Customer Lifetime Value (CLTV).

CLTV is undoubtedly a hugely important metric, but because it’s based on what your customers have actually spent with you, it’s also a limited measure of their real value to your business.

Why? Because some of your most valuable customers are valuable because of what they’re doing when they’re not on your website making purchases – namely, recommending your brand to their friends and family, be that via a WhatsApp message, phone call, during a walk in the park or down the pub on a Friday night. 

These brand advocates often sit at the centre of an ever-expanding, organic network of new customers. They might have introduced ten friends over the years – all of whom have gone on to introduce ten of their friends – all of whom have introduced ten friends, and so on.

Without Referral Intelligence®, you might have no idea that these people even exist, let alone about their relationships with your other customers. But with that knowledge, you can start to look beyond your customers’ CLTV to focus on their wider value to your business.

The fact is, if you’re not considering the extended lifetime value of your customers (which Referral Intelligence® enables you to see), you’re probably not getting the full picture – nor optimising the touchpoints on your customer journeys that you should be.

Referral Engineering® enables you to do just that.

Let’s take a closer look at how that works...

Find out who customers really are and how they will behave

You can track exactly who has been referred, and who has not, at your ecommerce checkout.  Our unique Name Share® function – which lets a new customer simply enter the name of the person who referred them for an exclusive reward – ensures you know exactly who’s who.

Unlike ‘simple’ referral widgets, our platform also enables you to A/B test by cohort, so you can test different marketing tactics on two similar groups to see what works best. 

This empowers you to measure all sorts of things. For example, you can gauge how altruistic your customers are by A/B testing CTAs: who responded to a ‘give 10% off’’ CTA vs. who responded to ‘get 10% off’?

You can then use these results to start segmenting and targeting your audiences with pinpoint accuracy.referral-marketing-programmes-mishandle-human-connections

Relentlessly optimise the next customer touchpoint

It’s currently possible to integrate over 35 best-in-class marketing tech platforms (and counting) with Mention Me. That means, for example, that you can configure your e-mail systems to automatically send the right emails to individual people, depending on their behaviour.

A follow-up email to someone that had responded to the ‘get 10% off’ message might contain another personal benefit for them – a discount, for example, or coupon offer. Whereas, for the ‘give 10% off’ audience, you might choose to send an email where the content is more focused on your business’s charity work or green credentials.

Track Propensity to Refer® and nurture customer advocacy

You can infer all kinds of data from our Referral Engineering® platform to understand exactly what your best customers look like. 

Has a person referred? How many times have they referred? What NPS score have they given to your business? How willing might they be to write a positive review?

The answers to these questions are all indicative of how loyal to your brand a customer is – and how willing they’ll be to refer their friends and family in your brand’s direction. 

We call this willingness (or lack thereof) their Propensity to Refer®. Knowing a customer’s (or audience’s) Propensity to Refer® means you can make better informed decisions about how to nurture them throughout the lifecycle.

For example, if a particular audience segment has a low Propensity to Refer®, you can focus on driving other actions that nurture advocacy and increase this – such as following you on social media or signing up to your newsletter.

Spreading the wealth of Referral Intelligence® 

Ultimately, you can combine Referral Intelligence® in different ways to completely optimise your approach to referral marketing by:

  • Identifying your biggest advocates and giving them offers that encourage more referrals
  • Encouraging prospective customers to take the plunge and place their first order
  • And (for other existing customers) optimising your strategy between sales and referral, based on their Propensity to Refer®.

This combined approach will help you increase customer acquisition, nurture brand advocacy software and also increase average order value (AOV).

But that’s not all. Referral Intelligence® has even wider applications than this. You can feed the data you get from Referral Engineering® directly into your other marketing tools and channels to improve their performance. 

Target your most valuable customers (whatever channel they’re using)

If your brand advocates are your most valuable customers – with the highest extended lifetime value – then how can you find more like them?

Enter our Referral Engineering® platform, which enables you to define lookalike audiences that you can then reach via other marketing channels. We’ve partnered with social agency Nest Performance to help our clients target lookalike audiences in exactly this way – with spectacular results.

SPOKE Menswear, for example, ran A/B tests on Facebook to explore how referrer lookalike audiences compared to their other seed audiences. The customers acquired through paid social, based on Referral Intelligence®, now account for 17% of all new customer revenue, and SPOKE has increased its conversion rates by 65%.Spoke referral programme

SPOKE Menswear used referral data to target lookalike audiences on paid social

Seraphine has also benefited significantly from using lookalike audiences, creating a robust social strategy that’s delivered a 20% increase in new customer acquisition.

Optimise your non-referral campaigns with Referral Intelligence® 

Our platform includes powerful dashboards that show the results of campaigns in real-time. It also provides comprehensive reporting tools that give insights into when customers are referring in their sales journeys, their AOV, your best-performing promotions – and so on.

As well as using these insights to optimise your referral campaigns, you can use them to inform your non-referral campaigns and channels. (As an example of the wider applicability of Referral Intelligence®, we’re currently using it to help direct mail businesses track direct mail performance and improve conversion rates.) 

And it works the other way around, too – your non-referral insights can be leveraged to enrich your Referral Intelligence®. It’s possible, for example, to associate five-star reviews placed on review platforms with the customers that gave them. You can then target these customers as probable brand advocates (or reward them in  other ways). 

We’re constantly adding to the 35+ integrations in our platform – all based around specific, real-world use cases. With each marketing tech platform we add to our integrations list, the value of Referral Intelligence® grows still further.  

Referral Intelligence®: a smarter way to understand your customers 

However you use it (and we hope we’ve shown there are plenty of ways you can), Referral Intelligence® is a reliable source of rich, actionable, widely applicable customer insights in a world where the traditional sources of such insights are beginning to dry up. 

So how will you use it? Download our eBook, 'A Beginner’s Guide to Referral Engineering®' for some more ideas and inspiration.


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