REFERRAL MARKETING: The Primary Use Cases

Referral Marketing: The Primary Use Cases

We believe there are three primary use cases for referral marketing software. However, there are a number of ways that you can use referral software to track, incentivize conversions, and increase referrals and revenue.

User-Based Referral Marketing Programs

The most typical use case for referral marketing software is the user-based referral program. The best examples can be seen from social commerce sites like fab.com, software companies like Dropbox, or innovative companies like Uber.

Here, every user is given a unique URL to share with their friends. When the referred user converts as determined by the organization -- the referring party will receive a reward.

With Ambassador, the company may define their own reward structure; options include cash, gift cards, points, vouchers, a discount, or even swag like a t-shirt.

The reward structure can be a single or dual incentive. A single incentive commission strategy is structured so that only the ambassador receives a reward. With a dual incentive commission, both the ambassador and the referred user will receive a benefit for their participation in the referral marketing program.

The major benefit of a dual incentive reward structure is that it creates a win-win scenario, which makes people more likely to promote with their network.

Resellers and Product Integration

Sometimes the best use for a referral marketing program is a way to reward the other members in your business ecosystem. Being able to quantify how much revenue different channels generate will enable you to better scale as your company grows.

You can create a referral program to be used solely by resellers, or you can create multiple campaigns and have a specific campaign dedicated to your various resellers and partners. Some may require a more aggressive revenue share structure depending on your business strategy.

One of the common misconceptions we frequently encounter when talking with potential customers is the idea that you need a large number of brand ambassadors in order to run a successful referral marketing program. This simply isn't true. You can run a very successful referral marketing program by recognizing other businesses in your space, that benefit from your success, and inviting them to participate in your referral campaigns.

Another great way to leverage your referral program is internally. Who is a better business partner than your employees? This works especially well for our enterprise customers, who have thousands of employees. You can adjust the reward structure for your employees to create a meaningful reward for their referrals too.

Traditional Affiliate Model

A simple way to differentiate a referral strategy from an affiliate strategy is by considering the brand ambassador's motive. A referral marketing strategy is when the brand ambassador is sharing links with people that they know.

The reward structure might encourage them to share the product, but they are not wholly driven by the reward. If there is a chance the user would share the product even if the reward structure didn't exist, it is probably a referral.

An affiliate marketing strategy is different because the brand ambassadors are typically motivated purely by the reward structure. This is perfectly acceptable, and most referral marketing software can handle this nuance.

Think Outside the Box!

These are just three traditional use cases for a referral marketing program, but truthfully, there are plenty of creative ways to grow your company using referral software. 

Do you want to learn how to turn more of your customers, partners, affiliates, and fans into revenue generators?Request a custom demo from one of our referral marketing software experts today!