Our February newsletter went out yesterday. The Opinion piece is reproduced below:

What It Takes To Run A Social Referral Program

Vijay Sundaram

I was briefing an analyst this week when she popped the astute question: Why can’t businesses run their own social referral programs in-house?

Let’s first level set. Social referrals are referrals generated by consumers, through their social connections, on behalf of the products and services they use. This makes unprecedented sense today, given the coevolution of two factors: first, the instant ability to seek and offer opinions through online social networks; second, a dramatic change in consumer behavior whereby most people seek advice from others before making purchase decisions.

Making social referral programs an institutional competence, results in a superior customer acquisition and retention strategy for a business, directly lifting its topline.

Here’s what it takes.

Strategy: Social referrals must be tied and integrated into existing marketing campaigns like product launches, promotions, and membership drives. Programs must be constructed so consumers are motivated to refer others, yet be seen as authentic and credible. Programs must clearly tie into corporate objectives and be measurable.

Platform: At its core you need a system that manages campaign traffic, sets up referrals across multiple social channels (Facebook, Twitter, email, blogs, etc.), sets up and tracks incentives, and runs the analytics to measure and assess performance. The platform must ensure security, privacy and regulatory compliance, while quickly identifying abuse. All is lost if the user experience is anything but blindingly simple.

Ecosystem: Businesses undertaking digital marketing programs need to work with existing partners like agencies, rewards sites, redemption sites, and email service providers. No program gets executed in isolation. A social referral platform must come integrated and connected with these partners, absolving you of the grunt work.

Work with a platform partner who’s seen the whole process end-to-end. One who has worked across industries and diverse programs and made a fair share of mistakes, so you can skirt them.