Imagine you’re sending a newsletter to your new customers. In most cases, you would launch your email marketing tool and start the process of creating a campaign. Now what if you didn’t have a tool, where would you start?

Sure, if you’re not in a rush to get the newsletter out, and your developers have a lot of free time, you could hack something together.

But what if you had to send it by EOD? With smart content according to their geographic location. And include a link to their most recent purchase. Then would you start by tinkering with code or simply Googling, “email marketing technology?”

All too often, businesses that build DIY referral programs find themselves in a similar position.

Sure, they’re able to build a basic referral program with basic tracking and reporting capabilities. But what happens when the referral program matures beyond entry-level functionality? If the in-house program wasn’t designed around flexibility and extensibility, it can create very large barriers to scale.

Some of those barriers include:

An inability to automate manual activities like enrollment workflows and referral commission payouts at scale. When your referral program is small, managing things manually isn’t a problem. When you have hundreds or thousands of customers and just as many approved referrals every month, automation is the difference between referral marketing success and failure.

Difficulty integrating with other critical systems like Salesforce, Marketo, Mailchimp, Magento, and Shopify. The process of developing direct integrations with big vendors like Salesforce and Magento requires a lot of time and technical aptitude. This is something your in-house development team might be able to tackle, but asking them to do it means asking them to prioritize it over other important initiatives. That said, if you don’t invest in those integrations, it will significantly hamper the value you — and your customers — can reap from a referral program.

Clunky browser-based mobile experiences that kill engagement and sharing. Because referral marketing isn’t most companies’ core competency, the vast majority of DIY referral programs have poor (or nonexistent) mobile experiences that feel bolted on. With mobile usage skyrocketing, these second-rate experiences can kill referral engagement. Mobile-first functionality can be added on after-the-fact, but doing so requires significant mobile aptitude and technology that’s flexible enough to incorporate it.

One of the biggest benefits of buying referral marketing software from an established vendor is that it virtually future-proofs your program.

Best-in-class referral marketing vendors build their solutions around flexibility, scalability, and extensibility, and their teams are constantly working on new features to make their customers more successful. This allows your business to easily implement new features and functionality on-demand, with relatively little back-end development.

Referral Marketing: Build vs. Buy

In most cases, in-house referral programs are built for the here-and-now. While this approach might offer the basic functionality to capitalize on referrals in the short-term, it can create development nightmares as your business — and your referral program — grows.

As with any high-value marketing channel, it’s important to consider the scalability, flexibility, and extensibility of your referral marketing program from the very start. The last thing you want is to find yourself in a position where it’s virtually impossible to bolt-on functionality that would help you optimize and scale referral revenue.