Advocate Marketing Reward Budgeting 101: How To Put A $ Value On Customer Advocacy

Truman Tang

This post is the first in a two-part series on how to budget for your advocate marketing program. It discusses how to place a value on customer advocacy and create a point economy for your program.

One question that marketers ask me all the time is, “How much should I budget for my advocate marketing program?”

We all know that the value of happy customers and raving brand advocates is immeasurable.

But if you want to get buy-in for an advocate marketing program, you need to put some numbers on it for the higher ups.

The most effective advocate marketing programs run as games. In Influitive’s AdvocateHub software, when an advocate completes a challenge, such as writing a product review or submitting a referral, they’re given a specific number of points. When your advocates get enough points, they can redeem them for prizes such as company swag, gift cards, or conference passes. They also climb the leaderboard as they collect more points.

What you probably want to know now is: how much are all of these rewards going to cost me?

However, before you can focus on reward costs, you need to know how many points you’ll be giving advocates when they do something for you. I call this a “Points Economy”.

Here are four steps to determining your Points Economy:

1. Understand your goals

The first key to advocate marketing success is to set goals.

Goals are the light that guides you along your advocate marketing journey. They give you a sense of direction and help you realize the full potential of your investment.

So, grab a cup of coffee and ask yourself what you want to achieve from your advocate marketing program. For example, is getting high-quality referrals a top priority? If so, how much is a referral worth to you? How much are you willing to give away in exchange for one?

2. Base your Points Economy on your biggest target

In most advocate marketing programs, advocates receive points when they complete a challenge on your behalf. Reward points are the currency of your program. By creating a Points Economy, you will be able to determine: 

  1. How much a single point is worth to your company in (which will help you create your rewards budget)
  2. How many points you should award for different types of challenges (more on this later)

To determine this number, start by looking at your goals. If getting referrals is your top goal, decide how many you want this year. For example, you may want 100 referrals this year.

Now ask, how much you’re willing to pay for them. Let’s say that’s $20 each.

Since giving a referral is a high-value activity, you’ll want to reward advocates with a large number of points when they send one your way. For example, you may give advocates 100 points for every referral.

So, your Points Economy would be $20/100 points = $0.20 per point.  

referralebook_ebook_coverTo learn more about how to set reward rates for referrals, read page 9 in this free eBook.

Build your dream referral program 

3. Use your Points Economy to place a value on advocacy

Once you set your Points Economy to $0.20 per point, you can base all of your other advocacy activities on this number.

For example, you might be willing to pay $1 every time an advocate shares one of your blog posts on LinkedIn. Since your Points Economy is $0.20, you would give them 5 points for sharing your post.

Or, you might be willing to give an advocate $100 if their referral lead turns into a customer. In this case, you would award them 500 points when the deal closes.   

4. Award a different amount of points for different acts of advocacy

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As you can see in the examples above, it’s important to vary the number of points that you give away.

The general rule of thumb is: the easier/less valuable the task, the lower the point value. If you gave out 100 points for a LinkedIn share (instead of the 5 I recommended above), your advocates would rack up points pretty easily, and you would likely have to overspend on rewards. Unless you’re generating a lot of value from those Linkedin social shares, keep the reward small.

You also can’t give someone 1 point for a referral and 1 point for a LinkedIn repost. If all of your point values are low, your advocates won’t see the benefits of going out of their way to give you a referral (which is a much bigger and more personal ask than a social media share). They won’t think it’s worth their time if you don’t reward them appropriately for their efforts.

Your advocates will like seeing their points adding up on your leaderboard. Watching their points increase can motivate them to advocate for you. You’ll need to find a balance between easy low point challenges and harder high point challenges so advocates can see their points steadily increasing, or take a big leap in the leaderboard for doing you a bigger favor.

Ultimately, the more challenges they complete, the more value you will get from your advocate marketing program.

Estimating your reward costs

This post is the first in a two-part series on how to budget for your advocate marketing program. Now that you know how to put a value on individual acts of advocacy, the next post will discuss how much you should budget for your rewards (coming soon!).

Video: How to find budget for advocate marketing

2 Responses to Advocate Marketing Reward Budgeting 101: How To Put A $ Value On Customer Advocacy

  1. […] they might not be battling each other, you can still incentivize them to compete by implementing a points and recognition system in your program every time they complete an activity. Leaderboards, badges and opportunities to […]

  2. […] is the second piece in a two-part series on how to budget for your advocate marketing program. This post focuses on creating a […]

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