Subscription growth hack (by PayKickstart)
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We all know it on some level – referral marketing works and the referral program software you use matters.
Just think back to when a friend told you about a movie, restaurant, or event. How did their recommendation affect your perception of it?
If you’re like most people (82% of Americans to be precise), it could’ve been the deciding factor in whether or not you went at all.
Referral program software gives you – the business – the ability to harness and direct word of mouth. The software you choose is a big deal and there are a few key considerations you should have in mind before choosing.
This article sheds light on how to choose the best referral program software the first time so you can reap the benefits.
Social status has evolved over the millennia to form a complex web of interpersonal interactions. You increase your social credibility and by extension your social status by helping others.
When you do the opposite and hurt other people then you reduce your social standing.
A good recommendation falls into the first category – it increases your social status.
People are happy to share products, services, and experiences they loved with their social circle because it improves the goodwill they enjoy. It also earns them respect and prestige. If the recommendation is bad then the person giving it risks losing trust and social standing.
Before anyone refers a product, it goes through an internal vetting process. They ask themselves, “If I put this out there, how likely is it to be rejected or ignored by my social circle? Or how likely is it to be accepted and praised by them?”
If it will be praised and accepted then people recommend it.
That’s why, before you implement a referral program, be sure your product or service is great. When you give people an extra incentive to share, it becomes a no brainer.
In essence, the best friends of your best customers become new customers. They spend more money, refer more people, and help you improve your products. Everyone wins.
If your product isn’t quite there yet then no amount of slick software will help your referral program take off.
A lot is riding on the back of your referral program software. When executed well, you can increase your acquisition between 10% and 30%. When done poorly, it can turn off current and prospective customers.
Below are the key considerations when choosing referral program software.
It’s about your customers but let’s be honest, this is about you. A referral program is only there to grow your business so what do you want out of it?
All of these are reasonable considerations but by no means cover all the motivations for a successful referral program.
Before you start vetting software, be sure to have a clear picture of your end goal.
The current marketing tools landscape is complex. The average small business marketer uses 12 tools to manage data and campaigns. Some use more than 31 tools to stay on top of everything.
Whether you’re using more than thirty or just a handful, your referral program software should play nice with your current marketing stack.
Do you have thousands of customers who are currently using your solution? If so then the price may not be a big factor because once you implement it the program will quickly pay for itself.
If you’re like other businesses then cost is a consideration and it’ll take time to understand and scale your referral program.
The main thing is to choose a solution which won’t break the bank while you’re trying to ramp it up. Decide on a maximum budget and an ideal budget and shortlist the referral program software that meets those criteria.
There seems to a headline every night that talks about a security breach here or a company that misused data there.
Consumers are more conscious of their data than ever and will skip over a business that doesn’t take data security seriously.
It may take a bit of time to understand the legal jargon they use but it’s a worthwhile investment.
There’s no one size fits all referral program. Some people may want to run a mobile app referral program while others are focused on generating leads. Another group may only consider new customers a valid referral.
Different referral program software caters to different needs. For example, PayKickstart lets you choose from a number of criteria such as new leads or customers.
Other software may be specialized for mobile app installs. Get clear on the type of referral program you want to run (and possible changes) from the beginning.
We’ve spoken about the features your referral program must have in a previous post so I won’t go into that here.
When I mention features, I mean the ones peculiar to your use case.
For example, you may have specific campaign customization needs that most software can’t handle or want to segment and automate specific activities.
Be sure to check all of the features contained in the referral program software before you sign up. It’s important to note that not all features will be mentioned on the website so if you’re considering a tool that checks all the other boxes, reach out to the sales team.
It may be something they’re working on or have but don’t mention on their website.
Referral marketing is a tried and tested way to increase acquisition and drive down costs. Your product needs to be on point before you launch your program but the software you use is just as important.
I’ve gone through some of the major considerations to keep in mind while looking for the best software for your situation.
Be sure to refer to this list while you’re actively shopping so you don’t miss something and choose the wrong software.
Let me know what you think about how to choose referral program software in the comments and don’t forget to share.
Daniel Ndukwu is a regular contributor to the PayKickstart blog. He has extensive experience with online businesses, conversion optimization, and subscription revenue models. When he's not writing insightful content, he works with other entrepreneurs to help them grow their bottom line.Read More About Daniel Ndukwu