Leveraging Alternative Channel Referrals to Grow Your Business
by Anna Johnson
Magic bullets, a sure thing, winning the lottery, fairy dust, and closing a million-dollar deal with little to no work are the stuff dreams are made of. This kind of thinking is tempting when facing the daunting challenges of doubling your customer base, but diligent planning and a keen ability to discover unconventional referral audiences is a more advantageous path to net new business. To learn how, Channel Management Insights sat down with Lynn Roberts, residential new channel development at Cox Communications (a broadband communications and entertainment company) who shared her insights on how to tap into alternative channel referrals.
Characteristic of a Good Referral
The single most important characteristic of a good referral prospect is someone who has a close connection to your customer. For Cox Communications, one of the best places they uncovered the most productive source of referral leads was none other than their own employees. “Employees are extremely important for any business. But for Cox, our employees interact with our customers on a day-to-day basis. Our field technicians, in particular, are installing video, data, phone, and home security products in people’s homes. When a customer has some of our products, but not all of them, there is an opportunity for the field installer to refer new business,” says Roberts.
Their next step was to look beyond their employees and identify their customers’ trusted relationships, such as moving companies, leasing agents, and utility companies. “A positive customer experience results when leasing agents or companies in the moving segment can provide a concierge service to their customers. Referrals from the moving segment have a high sales conversion rate and a lower channel acquisition cost,” adds Roberts.
Key Components for Good Program Adoption
“One key component is frequent communication. For example, in the case of our employees, we can plan, communicate, and run a new incentive program at any time.” Roberts continues, “In addition to the e-mail updates, program participants can track their referral progress directly on the website. This type of reinforcement is very powerful. Real-time results can be very motivating, especially during incentive programs that involve contests.”
Don’t underestimate the value of a self-service and comprehensive website for partners to visit in order to learn about the program. Cox utilizes a comprehensive program Website as a repository for all program information. “At our site, participants can submit and track referrals, download flyers, and check their balances on their Cox Rewards Card, a Visa debit card that Cox contributes to when a referral converts into a sale.” says Roberts.
The ability to measure referral conversion rates is also very important. Conversion reports aren’t just important for the company but can be especially motivating for the referral partner participating in the program. “Tying referral rewards to sales conversions is a key component to the success of the program. But you can’t do that unless you have a reliable way of measuring conversion rates and tying them back to the person referring the business,” advises Roberts. “Making the metrics transparent to all participants involved helps promote trust and a shared responsibility to making the program a success.”
Key Components for Ongoing Participation
Many times lead referral programs have low conversion rates when leads aren’t followed up on in a timely manner. When participants realize that their leads are not followed up on in a reliable manner, they may choose to stop participating in the program. “We can collect leads through the portals, but it’s the back-end of our referral program that routes leads to skilled sales professionals for follow up. No lead goes untouched,” says Roberts.
Creating Value in Strategic Referral Relationships
“In order to ensure ongoing participation in affinity partner referral programs, take time to understand your partner’s business and make sure your program is aligned with their business objectives,” states Roberts. Whether your objective is subscriber acquisition or retention, implementing referral programs with strategic partners can help you achieve your goals. “Strategic agreements with partners can include several components – special customer offers, financial compensation for leads generated by the partner or their representatives, executing reciprocal marketing tactics, and more. In order to be successful, it’s important to understand your partner’s goals, and tailor the affinity relationships to assist them in achieving desired business results. We have structured affinity programs and incorporated the LeadPro platform in several different ways, based on partner business objectives,” says Roberts. “We have programs in place that leverage on-line lead generation through banner ads, call center transfer programs, and in-bound demand generation.”
Future of Referral Programs at Cox
Cox Communications has a simple referral program with a sophisticated process to ensure seamless integration with affinity partners and reliable payment of incentives to people who refer business. There was no magic bullet or fairy dust that ensured the success of their program. Instead, it was thoughtful planning and hard work that began in 2009. Since the launch, Cox has experienced success, adding over 100+ leasing agents and strategic partners to the program while enjoying a 50% growth rate in their second year and continued year-over-year growth. “We have a great program and we’re committed to our approach. The future success of our referral program revolves around staying disciplined in our processes and adding the right partners,” states Roberts.