6 referral marketing best practices to turn customers into word-of-mouth marketers

6 Referral Marketing Best Practices to Turn Customers into Word of Mouth Marketers

Agenda

1.  Overview of Retail Landscape

2.  What is a Referral Program?

3.  6 Best Practices for Referral Programs

4.  Expected Results and Case Studies

5.  Q&A

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Welcome Webinar A0endees

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About Retail TouchPoints

ü  Launched in 2007

ü Over 26,000 subscribers

ü  To provide executives with relevant,

insightful content across a variety of

digital medium

Free subscription to our weekly newsletter: WWW.RETAILTOUCHPOINTS.COM/SIGNUP

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Panelists

Angela Bandlow VP of Marketing

Extole

Alicia Fiorletta Associate Editor

Retail TouchPoints

MODERATOR

Ashley Futak Senior Marketing Manager

Extole

Overview of Retail Landscape

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Consumers Trust Social Media Connec)ons More Than Brands

of U.S. consumers say they trust brand and product recommendaBons from

friends and family.

of consumers say they trust posts created and shared by brands and companies on their social accounts.

Only

Source: Forrester Research, "How To Build Your Brand With Branded Content"

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As If You Needed Addi)onal Proof…

Source: Nielsen, Social Media Report 2012

of social media users learn about brands, products and services through social networks.

of users hear about their friends' and colleagues' experiences using those products and services.

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A New Era Of Brand-‐To-‐Shopper Communica)on

"The days when companies could Bghtly control brand messaging and progress consumers along a linear purchase funnel have long ended. Social media has fundamentally changed the consumer decision journey. Consumer decisions and behaviors are increasingly driven by the opinions, tastes and preferences of an exponenBally larger, global pool of friends, peers and influencers."

Source: Nielsen Research, Social Media Report 2012

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Iden)fying The Value Of WOM

Source: MarketShare

WOM increases markeBng effecBveness by up to 54%

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ü  A discount code or coupon for “Liking” or Following a brand page (35%)

ü  Access to limited-‐Bme offers for sharing social content (35%)

ü  Discounts on e-‐Commerce purchases for referring friends and family (20%)

Retailers find the most effecBve incenBves for social communicaBon to be:

Source: 2013 Social Commerce ImperaBves survey, Retail TouchPoints

59% of Retailers have a Social Commerce strategy in place in 2013, up from 48% in 2012.

How Retailers Are Keeping Pace

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Learn From Some Of The Thought Leaders

Bonobos PoWery Barn

What is a Referral Program?

Extole: the Leader in Referral Marketing

© 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

Drive acquisition through customer word of mouth:

•  Launch world-class customer referral programs

•  Tap into a new high- value marketing channel

About Extole:

– Founded in 2009 – 300 leading brands

TRY BRAND

“X”

The Challenge: Rising Above the Noise


WOM recommendations break through the noise

3000 brand impressions

/ day

92% of consumers trust

recommendations from friends, 33% trust online ads

- Nielsen 80% of all

purchase cycles involve some form

of WOM recommendation

- Forrester WOM recommendations

convert at 3-5x other channels

- WOMMA

Overview of a Referral Program

A referral program is an end-to-end program to:

• Engage a brand’s customer advocates

• Foster sharing of referrals from advocates

• Convert friends into new customers

• Monitor performance and optimize results


Folica: Turning Advocates into Marketers

GOAL: • Acquire new customers via referrals from existing customers

PROGRAM: • Advocate: $10 credit •  Friend: $10 off first purchase

PROMOTION: • Website, Facebook, email,

Twitter & newsletters

INDUSTRY: Retail, Health & Beauty

© 2013 Extole, Inc. All rights reserved. Proprietary/Confidential.

Promoting the Program

19 © 2013 Extole, Inc. All rights reserved. Proprietary/Confidential.

Advocates Share Over Email


Advocates Share via Facebook


Advocates Share via Twitter


Friends Receive Offer via Sharing Messages


The Bottom Line

RESULTS: (After 30 days) • Advocates……………….. 6,000+ • Shares per Advocate…… 4 • Total Shares…………….. 21K • Email Open Rate……….. 93% • Conversion Rate………... 16%


6 Best Practices for Referral Marketing Programs

social referrals

amplify brand reach

Best Practices for Referral Programs


1. Creating a Compelling Offer

•  What to consider: –  Compelling offer for customer advocates –  Unique offer for the friend –  Balanced offer structure –  Testing and optimizing

•  Offers – what will resonate with your customers? –  Free goods, discounts, exclusive product, loyalty points –  Related products –  Gift cards –  Charitable donations


1. Creating a Compelling Offer


2. Promoting the Program

•  What to consider: –  Promotion across owned assets

•  Website •  Email lists •  Communities •  Social networks

–  Promoting at key customer touch points •  Order confirmation pages •  Purchase confirmation emails •  Pop-up messages and banner ads within digital products

–  Keeping promotions fresh with a clear CTA



Email Website

Facebook

Post Transaction



36%

21%

11%

11%

6%

4% 3%

3% 2% 2% 1% Homepage

Post-purchase

Newsletter Email

In-Product

Other

Dedicated Email

My Account Page

Dedicated Page

'Drip' Remarketing Email

Header/Footer

Social Media Post

Participation by Promotion Placement


3. Making it Easy for Advocates to Share

•  What to consider – Messages: Default or Advocate Created

•  Sharing channels

– Email – PURL – Facebook – Twitter



•  Email Sharing

–  1 to 1 share –  Personal recommendation –  Highest conversions

•  Default Messages

–  Read like a story with a personal touch –  Tells the friend about the offer they will

receive –  Include what the advocate gets if the friend

converts



•  PURL (Personal URL) Sharing

–  Personalized links which brands can provide to advocates to share programs with friends across channels and platforms

–  Simple, flexible, can be used for 1 to1 or 1 to many sharing –  Less control for brand

•  Default Messages –  N/A



•  Facebook Sharing

–  1 to many share with friends –  Social context –  Higher amplification than 1 to 1 shares

•  Default Messages

–  Read like advocate speaking directly to friends

–  Include rationale for why they are sharing with friends



•  Twitter Sharing

–  1 to many broadcast share –  Highest amplification, lowest conversion

•  Default Messages –  Condensed message to world at large (140 characters) –  Use @TwitterHandle for brand to increase SEO –  Use hashtag (#) for program


4. Personalizing the Friend Experience

•  What to consider

–  Make it short and to the point –  Describe the offer –  Make it personal –  Keep the CTA simple


4. Personalizing the Friend Experience


5. Keeping the Program Top of Mind


–  Remarketing –  Advocate Dashboards


5. Keeping the Program Top of Mind: Remarketing

10.5%

increase in advocates engaged

14%

of all advocate shares

29.5%

of all final conversions


5. Keeping the Program Top of Mind: Advocate Dashboard


6. Monitoring and Optimizing the Program


–  Visibility into program funnel –  Ongoing testing

•  Offer

•  Promotional placements and copy

•  Default sharing messages

•  Remarketing –  Optimization


6. Measure and Optimizing

advocates

shares

referrals

conversions

shares per advocate

clicks per share

conversion rate


6. Monitoring and Optimizing the Program

Launch

Referrals grew From 15 to 3,000

Largest Acquisition Channel

Optimization Period

Financial Services Example


Expected Results & Case Studies

social referrals

amplify brand reach

The Referral Marketing Funnel

advocates

shares

referrals

conversions

shares per advocate

clicks per share

conversion rate


The Referral Marketing Funnel

30-50% email open rates

20-60% of customers become

advocates

Advocates share an average 5.4X

3-5X conversion rate

advocates

shares

referrals

conversions

shares per advocate

clicks per share

conversion rate


Channel Performance

TMW H I T E P A P E R | A P R I L 2 0 1 2

A 101 Guide To Social Referral Programs

Amplifying Your Brand Reach Via Social Referral Programs

7

Brands can optimize the performance of their social referral programs by testing

and optimizing offers, effectively promoting the program, and testing messaging

by sharing channel.

Sharing Channels

There are a number of ways in which advocates share a referral program with their

friends, including email, personal URL (PURL), Facebook, Twitter, Google+, etc. Shar-

ing, clicks per share and conversion rates vary according to sharing channel. Making

sharing easy, and testing and optimizing messaging according to sharing channel are

important components and directly related to social referral program success.

Clicks/Share

Shares/Advocates

Conversion Rate

Conversions

Social Shares

Friend Clicks

Advocates

Facebook

PURL

Email

Twitter

Email

Facebook

PURL

Twitter

Clicks/Share

Shares/Advocates

Conversion Rate

Conversions

Social Shares

Friend Clicks

Advocates

Facebook

PURL

Email

Twitter

Email

Facebook

PURL

Twitter

The Social Referral Funnel

Social referral program effectiveness is measured by:

�� Advocate participation

�� Shares per advocate and number of shares

�� -YPLUK�JSPJRZ��YLMLYYHS�[YHMÄJ��and clicks per share

�� New conversions and conversion rate

Clicks per Share by Channel Conversion Rate by Channel

(TWSPÄJH[PVU��JSPJRZ�WLY�ZOHYL��PZ�highest in social channels—Twitter is highest; email is lowest.

Conversion rate is highest in one-to-one sharing—email is highest; Twitter is lowest.


Quantifiable Marketing Results

30% Referrals

2.3M Stories

500K Revenue $

Entertainment / Media

Consumer Electronics

Online Health & Beauty

233% AOV

5000 Customers

433% Conversions

Financial Services

Automotive

Online Apparel

Awareness

Referral Rate

Conversion Rate

Customer Acquisition

Revenue

Average Order Value

6 Months

11 Months

30 Days

150 Days

30 Days

45 Days


Women’s Retailer: Boosts Referral Sales 4x

GOAL: • Drive WOM recommendations to boost

sales and build community

PROGRAM: • Original Offer: $10 for advocate, $10

for friend • Double Rewards: $20 for advocate,

$20 for friend

RESULTS: (Per Month) Original Double

• Advocates………… 10K+…… +33% • Share Rate……….. 2.3……… +57% • Friend Clicks……… 12K+ …... 3x • Sales………………. 1000+….. 4x

Retail:

Apparel


Roku: Driving Sales via Customer Referrals

GOAL: • Drive new customer acquisition

through word of mouth referrals

PROGRAM: • Advocate: free month of Netflix

RESULTS: (After 6 months) • Advocates……………….. 40k+ • Referrals per Month.…… 10k • Revenue…..…………….. $250K • Customer Referrals…….. +30%

INDUSTRY: Consumer Electronics


Conclusion

•  Word of mouth is a critical marketing channel

•  Referral programs harness the power of brand advocates to drive new sales and acquisition

•  Best Practices Recap: 1.  Create a Compelling Offer 2.  Promote the Program 3.  Make it Easy for Advocates to Share 4.  Personalize the Friend Experience 5.  Keep the Program Top of Mind 6.  Monitor and Optimize the Program


Q&A

•  Submit all questions via the Questions section of your GoToWebinar Control Panel and send to either presenter

Next Steps •  Download this presentation at: http://rtou.ch/womwebinar

•  Download Extole’s Ultimate Referral Marketing Guide – extole.com

•  Stay Current on Extole News and Happenings! –  extole.com/blog/


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6 referral marketing best practices to turn customers into word-of-mouth marketers

Business

referral marketing

amplify brand

social referral

default messages

conversion

customer acquisition

consumer electronics

sharing channel