Advocate

In referral marketing, an advocate is the existing customer of a business who refers a new customer in exchange for a reward.

Businesses are increasingly relying on their brand advocates to grow their customer base. Referral programs are executed in different ways. However, most of them try to reward the advocate for their behavior with a compelling incentive.

For most companies, advocates receive their reward after the new customer referred by them enters a referral code. Generally, referral programs have three stages:

The number of friends that an advocate can refer to a brand varies from business to business. Some brands prefer not to limit the number of referred customers from an advocate. Others, however, build up their strategy around a maximum number of referrals from an advocate in a certain period of time. 

Advocates are an integral part of a referral program, bringing customers that are more valuable than average in terms of retention rate and customer lifetime value (CLV):

Moreover, examining the activity of customers with a high referral rate will give you an idea of where your program is really excelling and what features are creating the most buzz.

Advocates can have a significant impact on reducing customer acquisition cost (CAC) for a business. Compared to other methods of attracting new customers (for example, paid acquisition), this approach is considerably less expensive. 

It's essential that your referral program gives advocates a worthwhile incentive. Since you expect your advocates to bring you valuable referred customers, you should create value for them too. Use reactive discounts and loyalty programs to maximize advocate rewards:

Check out our ebook, “Setting up your referral program with Talon.One” to learn how to power your own business with a cutting edge referral scheme.