Optimizing Your Referral Program Incentive Structure
referrals is a time-tested method of dramatically increasing WOM success. The refer/reward structure taps into an innate desire to help one another. Basically, people like to give referrals; they absolutely love being rewarded for it. Such programs present a lot of room for creativity in the structure, cost and development of the referral incentives. Incentives can run across a broad spectrum incorporating both monetary and non-monetary offers. With so many options though, finding the right incentive can be difficult. Businesses must assess a number of financial and demographic components to ensure they are getting the most from their program. In this Webinar, you’ll learn how to optimize your incentive structure to improve your business’ WOM marketing exponentially.
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Optimizing Your Referral Program Incentive Structure
- 1. Choosing An Incentive Structure An Ambassador Presentation @getambassador
- 2. Agenda About Ambassador Why Incentivize? Incentive Structure Incentive Types Incentive Amounts
- 3. About Ambassador Social Referral Platform for Brands Drive word-of-mouth referrals Acquire more customers Increase social presence Turn your customers into Brand Ambassadors Measurable results (ROI) Generate unique tracking URLs Leverage their social influence & reward them for marketing Simple Integration and Management SaaS delivery with API integration Integrates with the 3rd party tools you use Customized widgets
- 4. Why Incentivize? You’re competing for a customer’s time and energy— make it worth their while.
- 5. Choosing an Incentive Structure Single- or Dual- Incentive? $ $ $
- 6. Choosing an Incentive Structure The right structure for the right time. A Penny for Your Thoughts: Referral Reward Programs and Referral Likelihood, Journal of Marketing, 2007
- 7. Choosing Incentive Types Monetary Incentives Offering cash for referrals Pro: Universally attractive to ambassadors Con: Rewards do not recycle into your business automatically Non-Monetary Incentives Offering points, swag, or discounts for referrals Pro: Rewards can be recycled into business Con: Not as universally appealing
- 8. Determining Incentive Amount Need to Calculate Customer Lifetime Value Customer Acquisition Cost Final Result Sustainable Restrained Effective
- 9. Our eBook
Editor's Notes
- Single Incentive: A single incentive structure only rewards the original referrer for the new sale generated as a result of their activity. Dual Incentive: A dual incentive structure rewards both the referrer and the new customer.
- For a smaller brand, a single incentive structure with higher value proves more effective than a dual incentive structure in with both participants receive less of a reward. Based on these results, it is more effective for rewards to be skewed in favor of the original referrer for smaller brands. For a strong, established brand a dual incentive structure works better as a result of existing customers having an established relationship with the brand that deters price sensitivity; meaning that new customers should be targeted and rewarded more than existing customers. Both types of brands should take into account the benefits of an escalating reward structure, where-in referrers are rewarded more for each subsequent referral they loop in. This is based on the assumption that recommendations to close friends and family would have occurred anyway so its important to keep ambassadors engaged. In this case, the structure should be geared towards rewarding referrals to casual acquaintances.