“Having a poor brand image or product experience and expecting your referral program to make customers forget those… is a big mistake.”
In episode 72 of the Customers Who Click podcast, I interview Raúl Galera, Chief Advocate at ReferralCandy about referral marketing and how you can run a successful referral program.
Online stores can use their existing customer base to increase sales through cross-sells and upsells. Referral Marketing goes a step further and rewards existing customers if they bring new customers to you. This way you expand your reach to a new audience whilst improving your customer retention rates and of course: revenue.
Raúl Galera is a Partner Manager and a Chief Advocate at ReferralCandy, a referral marketing tool that gets you more customers by incentivizing referrals. Raúl comes from a Sales background and was already a fan of the ReferralCandy tool so joining the company as a Partner Manager in 2016 was quite serendipitous for him. He has deep experience in referral marketing both from the implementation AND consumer side.
Since 2010, ReferralCandy has generated more than $230M in referral sales for its clients.
04:16 – 08:00 – Referral Marketing Basics – If you are gaining new customers at a rapid pace, it’s very likely people are already loving your product and talking about it. Referral marketing lets you set up a system to help incentivize product-loving customers, activate the power of word-of-mouth, and turn your customers into a sales/marketing arm.
08:01 – 14:09 – How Referral Programs work – Referral programs add “nitro boosters” to your sales numbers. They are a cost-effective way to supplement new-lead generation campaigns such as PPC ads or other methods. They also help offset some of the negative word-of-mouth stories by improving repeat and referral sales, but they may not fix all brand reputation issues.
14:10 – 21:53 – What makes a good Referral Program? – Rewards in your program should be adapted to your customer’s purchasing behavior and frequency of repeat, upsell, or cross-sell purchases without breaking your company’s bank. Promote the referral program by running campaigns for it on email, social media, or your website so your referral program stays on top of their minds. Create unique, irresistible rewards focused on the people that will refer the buyers and less on the buyers themselves.
21:54 – 25:48 – Common mistakes by referral programs – Having a poor brand image or product experience and expecting your referral program to make customers forget those is a big mistake. Anything less than 100 orders per month and a low volume or pace of repeat buyers and/or support tickets indicate that it might be too early for your referral program to generate any meaningful results.
25:49 – 37:42 – Creative use cases of referral program – Offering free products, a discount of 90-95% on joining by the referral link, a tiered reward system for referral programs are all creative methods. PayPal (free $10 if the referred user adds $10 to their wallet) and DropBox (free 1GB storage on referrals) also got viral pretty quickly because customers love free stuff. Rewards should be given on the usage of the product and not just for registering/verifying their email addresses.
37:43 – 47:37 – Trends in Referral Marketing – Referral programs that use influencer marketing are a hot trend as those influencers tend to have a strong connection with their audience. Try the second tier, invitation-only referral programs with exclusive rewards for influencers or create a community where customers can interact with brand advocates.