Choosing the right reward for your Advocate program is a balancing act between what your customers want and what your business can afford to offer. In this article, we review the major reward types and when they’re recommended to use.
This reward type is very easy to communicate to both new and existing customers, so it makes sense that it’s the most popular choice. It gives the recipient a reason to make a first or repeat purchase, and provides an obvious benefit when shopping. Many brands use these rewards to create a simple slogan such as “Give $10, Get $10” to make the benefit clear for both parties.
Recommended for: Industries with regular purchases; B2C
Similar to dollars of credit, percentage discounts (e.g., 20% off) provide direct value to new and existing customers.
Percentage discount rewards are a great alternative to fixed-value account credits because they automatically scale relative to the value of the purchase. This setup can be especially motivating for participants if your business model uses different pricing tiers. The reward becomes more valuable when the participant make a more expensive purchase.
Third-party gift cards, like Amazon or pre-paid Visa gift cards, are often used to reward referrers in industries with low purchase frequencies. Some examples include:
Online insurance and mortgage brokers
Travel booking websites
Gift cards are also popular for the B2B market because they allow you to reward the advocate, not just the company they work for. The person referring their colleague likely isn’t paying the bill for your service, so a discount, credit or free time may not be a motivating reward. However, a gift card they can personally use might be. Learn more about Gift Card Rewards.
Recommended for: Industries with low purchase frequencies; B2B
Coupon codes can be incorporated into your program widget or microsite, and used to reward your participants and any friends they refer.
Advocates typically earn rewards when a referral they’ve made converts. After a successful conversion, the advocate is automatically notified via email. Then, they receive a unique coupon code that they can redeem for a reward.
For referred friends, the code is typically intended to be used during their initial checkout. You can set up a friend widget that shows the discount code within your program’s landing page, or during checkout to ensure the referred user receives their reward at the correct time. Learn more about Fuel Tank Rewards.
By rewarding your promoters with exposure to paid features for a limited time, they learn the value of upgrading. It increases the likelihood that they’ll pay for a premium subscription once the reward period has ended. Or, better yet, they will continue to refer new friends in order to keep receiving free premium access.
This type of reward is particularly helpful in subscription-based products, with monthly and/or yearly billing, and which have a number of plans at different price-points.
For example, offering a reward in the form of a free month of service can provide the flexibility for users to choose which product/plan to purchase (and on which billing cycle) as the reward's value will scale with the value of their purchase.
Product rewards can take the form of branded gifts or company swag. Company shirts, socks, stickers, mugs, or other items can all be repurposed as referral rewards. For example, the referred friend might receive a bonus gift in their first order, and the promoter will be able to add a special gift when they place their next shipment.
Product is a lesser-used reward because of the logistical challenges and shipping costs it can involve.