Why referral widgets fail to create long-term customer relationships


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The referral-centric approach vs. the advocate-centric approach

Marketers and sales teams alike are focusing on finding new ways to break through the marketing noise. To accomplish this, business have discovered the importance of a relationship focused sales approach that expands on customers good interactions by using an advocate-centric referral program as a primary strategy. But like any business practice there is more than one way to go about collecting referrals and recruiting advocates. The referral-centric approach and the advocate-centric approach are two different methods that prioritize different types of referral interactions.

The referral-centric approach emphasizes ease of use by having the program built around a widget to get a one-time referral from an essentially anonymous advocate. This approach is usually considered a fair option for an ecommerce company that wants to sell their products but doesn’t care who is buying them and are not interested in generating repeat referrals or sales from a customer.

The advocate-centric approach emphasizes the advocate experience and data from your advocate as the primary importance with a fully built referral program to support it. This approach is optimal for generating repeat referrals, building long term relationships, and increasing customer engagement and ROI.

In essence, a referral-centric approach vs. an advocate-centric approach is equivalent to the comparison between a one-night stand and a monogamous relationship. Both are a form of interaction but with different intentions and very different results.

With a one-night stand you gather hardly any information because you aren’t interested in having contact with the person again. Once you achieve your desired interaction you don’t try to continue building the relationship.

However, when you are trying to have a monogamous relationship, you get their contact information, learn their name, get to know their interests, and try to understand the person you’re interacting with in order to build a successful long-term relationship that continues to benefit both parties.

When trying to decide what approach blends with your business model consider the pros and cons of both methods.

The pros and cons of the referral and advocate-centric approaches

Referral-centric approach

• A widget can be placed on existing site
• Low barrier for advocate to register

• No registration other than email address so no advocate data
• No way to accumulate rewards
• No way to encourage repeat referrals from advocates
• Requires web developer to place on site
• Requires IT to perform security review
• Ad blockers block widgets

Advocate-centric approach

• Full profile of advocate data and program activity
• Can utilize reward structures that encourage repeat referrals
• Minimal IT needed
• Holistic view of all referral activity available for advocate

• Registration (1st time only) is an extra step (only if not using SSO)
• Goes to a different page to make a referral

Unfortunately, while both approaches have their pros, the discrepancies of any relationship building capabilities in the referral-centric approach removes much of a referral program’s ability to positively influence the holistic experience of customers. In addition, it creates a barrier to implement a relationship focused sales approach which is what the referral methodology is based on and what generates referral program’s unparalleled results.

Discover how an advocate-centric approach can impact your ROI. Calculate what your advocate-centric referral program ROI can be with an ROI Calculator.

Trisha Winter
Trisha Winter brings 20 years of technology marketing and management experience to her role as CMO at Amplifinity. With a lifelong passion for brand advocacy and referral marketing, Trisha provides strategic leadership to Amplifinity's brand presence and oversees a full range of marketing initiatives across industry sectors. She shares her expertise on the transformation of marketing as a speaker and author of numerous articles, blog posts, and white papers. When not being awesome in the office, she enjoys spending time with her family, reading and doing laps at the pool.


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