One of the smartest ways small-business owners can increase their revenue is by creating an effective brand ambassador program. A company that has successfully executed on this strategy is SoFi, a marketplace lending and student loan refinancing firm. I’ve watched SoFi grow exponentially over the past several years, and one of the reasons for its growth has been its paid brand ambassador program, according to Dan Fell, SoFi’s business development director. "The majority of SoFi’s business comes from referrals and word-of-mouth,” Fell explains. "As such, they view paid brand ambassadors as an extension of their word of mouth marketing channel, which is quite powerful."
A brand ambassador is a person who is willing and able to promote a company’s product or service. It's usually someone external to the company, and whose efforts contribute to increasing the company’s revenue. A paid brand ambassador typically has garnered a lot of credibility in his or her industry and is considered to be a thought leader in the space.
The term brand ambassador is often used synonymously with affiliate partner, but in reality, they can be different. An affiliate partner often gets paid from driving leads or sales to another company for financial gain by receiving a referral fee without necessarily believing in the product or service. On the other hand, a brand ambassador believes in the product or service first, then tries to get paid from recommending the product or service to their networks. As a result, the motivation can be slightly different, but this underlying factor can affect the success of a brand ambassador program.
If you're interested in setting up your own brand ambassador program for your company, you should consider doing the following.
Clearly Define and Track Your Marketing Goal
You should first have an idea of why you want to implement a brand ambassador program. “If the goal is anything other than increasing revenue," Fell says, "then paying for a brand ambassador will be a waste of time and money.” You should also have an idea of your customer acquisition costs so you can still turn a profit after paying a brand ambassador. SoFi has a culture of understanding acquisition costs by putting itself in its customer’s shoes to find out where they're making buying decisions. For instance, many of SoFi’s refinance customers are putting in key search terms in Google to “save on debt” or “pay off student loans,” so Fell targets very influential bloggers that write about these topics and pays them to write articles that discuss loan refinance as an option to lowering student loan debt.
Once you've determined your goals and who your ambassadors will be, you should see if the program is actually working. “In the age of the Internet, it is much easier to provide brand ambassadors dedicated links that will allow you to track sales that result from their marketing efforts,” Fell says.
While offer codes can also be effective, direct links provide a much more streamlined way to track the efforts of a brand ambassador. Fell also suggests considering whether you have the resources to monitor and be responsive to your brand ambassador community. SoFi has one dedicated employee to manage link tracking for the entire organization and another person to manage payment; this setup has been key to the success of the SoFi program. Don't worry if your program doesn't generate sales immediately; if an ambassador can generate strong readership in their community, even with over 20 Facebook shares or 10 retweets on Twitter, this will go a long way to provide a potential pipeline for sales down the line.
Find the Right Ambassadors for Your Customer Base
Look for brand ambassadors with influence and credibility. "One of the best ways to assess a brand ambassador’s influence is to find out how much site traffic they generate through their online platforms, how many followers they have on Twitter, and how many likes they have on Facebook,” Fell says. (SoFi's magic number for assessing credibility is whether the ambassador has 20,000 page likes on Facebook; however, you'll find out pretty quickly what platform delivers the highest throughput for your product or service.)
There's also the important matter of finding a brand ambassador who truly likes your product. You should find out if the brand ambassador’s values line up with those of the product or service you are selling. A good rule of thumb is to spend a lot of time on the brand ambassador’s website and perform due diligence on their blogs and platforms. Fell consistently asks himself if the brand ambassador would recommend the product without being financially rewarded—and he checks their social media profiles to see for himself.
Find ambassadors who make your life easier by delivering good content, and in return, you should try to do some of the heavy lifting for the brand ambassador. "Design collateral to help [ambassadors] with the marketing and make it easy for them to implement,” Fell advises. When the brand ambassador shares content related to your product or service (or another that you believe in), make sure you market their content. For example, SoFi’s business development team has a good habit of retweeting a lot of the content that their brand ambassadors write on topics that are tangential to SoFi. Instead of just retweeting a brand ambassador’s article on student loan refinance, SoFi will also share a brand ambassador’s article on getting more income or anything personal finance related.
Pay Market Rate for Good Ambassadors
The company and the brand ambassador should try to establish a win-win relationship. "One of the best ways to secure a win on both sides is to make the financial incentives attractive,” Fell says. A company can do this by offering to pay a flat fee or a referral fee based on actual revenue generated. SoFi has incorporated a culture of experimentation: a fixed fee might work for one ambassador while a referral fee might work for another.
Regardless of the structure, however, good brand ambassadors will demand above market rate for their ability to influence a consumer’s buying decision. For instance, SoFi has a referral program that's available to anyone who visits and shares the product. It pays them the market rate of $100. As such, a brand ambassador will demand to get paid more than the market rate available to everyone else.
"It makes good financial sense to pay the brand ambassador a bit more than what is paid in the referral program because you are relying on the brand ambassador to deliver much more in terms of sales or leads," Fell explains.
Like Fell, I'm a strong believer in paying for things that deliver a strong return on investment, and paying for brand ambassadors falls in line with this premise. Follow these tips, and you, too, might excel as SoFi has.
Read more articles on marketing.
Photo: Getty Images