10 Mistakes to Avoid When Choosing a Referral Program Software
Your carefully crafted sales pitch will always fall flat compared to a friend’s recommendation.
The Nielsen report "Global Trust in Advertising" clearly indicates that the recommendation is the most potent weapon in the fight for customer trust. And that's what referral marketing is all about – it is the most effective marketing strategy based on strong attachment and confidence in the recommending person.
“The most credible advertising comes straight from the people we know and trust. More than eight-in-10 global respondents (83%) say they completely or somewhat trust the recommendations of friends and family.”
I hope that I whetted your appetite for some referral marketing. If you have a big development team, plenty of resources, and time to spare, you can launch a referral program on your own by simply coding it. But, this is not the topic that I’d like to explore with you today. Referral program software makes referral marketing easier for businesses of all sizes. And with this piece, I would like to offer you some advice on what to look out for when choosing a referral program software. And trust me, the sea of possible providers is all but finite.
In short, your referral program software should:
- Be scalable and offer flexible pricing.
- Support multiple reward types and referral flows.
- Be adaptable and easy to manage.
- Offer fraud prevention tools.
- Be marketer- and developer-friendly.
- Offer quick integration with your store and 3rd party tools.
- Operate on mobile and offer extensive white-label capabilities.
- Allow for A/B tests and referral flow experiments.
- Come with built-in analytics tools.
- Offer round-the-clock customer support.
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1. Avoid unscalable referral program software providers
Scalability is one of the most important elements determining your chances of success. When choosing a referral program software, you must keep in mind that the scale of referrals can drastically peak or dip. And your referral provider should be flexible enough to adjust not only the resources for handling your project but also the price you pay. After all, managing 100 referrals versus 10 000 is an entirely different story regarding IT resources and cloud capabilities. Therefore, you should always opt for a referral program software that gives you the best of both worlds – fast response times for referral peaks and decreased pricing when your referral campaign is going slower than usual (which is perfectly normal). Other questions that you might ask before settling for a referral program software are:
- What are the limits to your plan?
- Are high-level plans still affordable, and do they offer the referral features you need?
- Is there a free trial?
- What kind of onboarding am I getting?
2. Look for referral software that accepts multiple reward types
One of the biggest referral marketing sins is offering customers ho-hum incentives in a cheap attempt to save cash. If you want to release a successful referral program (which I am sure you do), then you must offer rewards that are attractive enough for customers to take their time, risk their friends’ trust and refer your brand. A pen with your logo won’t do the trick. That’s why it is crucial to choose a referral program software that accepts multiple reward types – both product-based and non-monetary incentives (e.g., discounts, cashback, gift card credits). While you are at it, it is also important to examine what kind of a customer referral program workflows are supported – are you going to reward only the referrer or also the referee? Or perhaps both?
Gilt ran a fantastic campaign that combined their referral and loyalty programs into one, creating an e-commerce discount wonderland for both new and premium users. But, there’s a catch. If you use different providers for discount campaigns, loyalty programs, and referrals, then combining all this data bombarding your app will give your dev team a headache. That’s why it’s best to look for a referral provider who is ready to help you with more than one incentive. When your referral software accepts many types of deals, your marketers are free to get that sweet ROI through experiments and A/B tests.
3. Choose a referral provider that is ready for Plan B
Sometimes things may go south, and it’s okay. Just be prepared for the unexpected and ensure that you have the right tools to manage your referral program in case of trouble. You might think here about a user-friendly dashboard, a simple way to deactivate referral codes, or put a stop on a campaign if you notice signs of referral fraud.
4. Avoid unprotected referral program software
Speaking of fraud, you should look for referral software that gives you plenty of options to secure your referral program. You need to take both technical and practical steps to safeguard your referral codes from dishonest users. The most popular type of referral fraud includes creating fake email accounts and email aliases or publishing codes on the internet via sites like Reddit.
That’s why you need a referral program software that can define successful referrals in more creative terms than just pasting a referral code. Moreover, you would need a tool that can help you monitor suspicious email and IP addresses.
5. Always go for a marketer-friendly referral program software
You don’t want Dan from IT to run your referral program (sorry, Dan). You want a professional marketing team to have the final say regarding how your referral incentives play out. Therefore, you need to avoid referral solutions that overcomplicate the referral flow and require a lot of ongoing development work from your IT team. Questions that you might ask include:
- What is the dashboard like?
- Is the platform user-friendly?
- How many operations can the marketing team handle on their own?
- Is it easy to customize it without coding?
Another thing to consider is whether the referral software of your choice allows for role-based access to let you run affiliate programs and limit the number of users with admin rights. This is especially important if you are looking for a referral solution for an enterprise-grade organization with multi-layered dependencies and multiple teams engaged in a single project.
6. Avoid hard-to-integrate referral software
The fact that Dan from IT shouldn’t run your campaign doesn’t mean that the IT team won’t be involved in its development. Feeding the referral program software with your CRM data and integrating it with your store or app will require some development work up-front. This is why API-first referral solutions are becoming so popular these days. With the API-based referral software, your IT team can integrate all needed components in less than a day. Here is what you need to look for to get your hands on a developer-friendly referral program software:
- Easy to set up 3rd party integrations, including e-commerce stores (e.g., Shopify or BigCommerce).
- SDKs for the most popular programming languages.
- API-first infrastructure and speedy webhooks.
- High platform availability with no maintenance downtime.
- Quick and easy data export and import with tools such as CSV.
7. Go for a referral program software that takes care of CX
The customer experience (CX) is a crucial battleground for digital marketers these days. PwC research shows that 32% of customers will walk away from a brand after a single bad experience. With the number of customer touchpoints and devices growing, it is increasingly challenging for marketers to devise a concise user journey. When thinking of excellent customer experience and referral program software, you need to look for referral solutions that are mobile-ready (e.g., offer referral links in the form of QR codes) and that give you plenty of white-label options to keep your brand style unified.
8. Choose referral providers that encourage experiments
To better understand what drives engagement, you need to strategically segment your audience and A/B test element of your customer journey. You should split test plenty of characteristics of your referral scheme. Here are some of them:
- Referral landing page (layout, colors, fonts, and more).
- Terms and conditions of your referral program.
- Referral reward type (cashback, products, discount).
- Reward value.
- Copy tests (interestingly, usually copies focused on “giving” and not “getting” win).
- Referral link sharing options.
The best referral program software should let you conduct such experiments with speed and confidence. This usually means that marketers would get a dedicated space that allows them to manage the referral program with little to no developers’ involvement.
9. Avoid referral software that won’t let you track your performance
To track your referral sales, you’d better invest in referral program software with a built-in tracking system. You won’t get far with your project without means to evaluate data and optimize your program. Questions you may ask at this stage include:
- Can I track referral statistics in real-time?
- How can I attribute revenue coming from a referral program?
- How can I identify top referrers and possible brand advocated?
- Can I export referral data to 3rd party analytics tools?
10. Choose referral program software with transparent support policy
Learning a brand-new tool on your own is never a piece of cake. To boost your chances of success with a new referral software you’d need to get some help. This is why it is so important to research the support policy of different referral vendors before making the final decision. You can ask:
- What forms of support are on the table (email, slack, phone)?
- What is the timezone of the support team? And what business hours do they have?
- Do you get access to the knowledge centers and documentation?
- What is the maximum response time in the given plan?
- Is there a steep learning curve?
So what kind of platform would I recommended?
Having worked with different referral marketing platforms and being faced with bazillion customers requirements, the one thing I know for sure is that there is no simple answer to this question. Your best option will always depend on the type and size of your business. A great referral program is going to be different for e-commerce, SaaS or tourism industry.
What I do know is that Voucherify ticks all the right boxes when it comes to picking a secure and flexible referral software that will help you accelerate the oldest marketing channel there is – word-of-mouth.
Build a referral program with a reliable vendor today