Hello again, David from ReferralCandy here!
In the last email, we talked about referral rates. We used these benchmarks:
Baseline = 1%
Better = 5%
Best = 10%
Super Awesome = 15%+
In today's email, we'll look at what separates each tier and look at some examples.
Yesterday's email left off with a question:
"What separates the Baseline referral programs from the Better ones ...
the Better from the Best...
and the Best from the Super Awesome?"
The answer is actually very simple.
The difference between a good referral program and great one is YOU.
Specifically, how seriously you take your referral program.
Put another way, we can view the benchmarks like this:
Baseline = you set up the referral program, but don't tailor it to your store
Better = you offer significant rewards
Best = you offer significant rewards + you actively promote your program
Super Awesome = incredible product + significant rewards + active promotion
What separates each tier is how integrated the referral program is into your marketing strategy. Is referral marketing an important piece... or is it just bolted on?
Let's look at some examples of companies who are doing it right.
Example: Dropbox
Remember Dropbox from my first email? They have a Super Awesome referral program because they do all of these:
Incredible product + Significant Rewards + Active Promotion
Let’s look at these 3 factors and see how we can apply it to your store.
Incredible product:
Okay, not everyone can have a industry-changing tech startup. That’s fine. But the takeaway here is that they have a product that gets their customers so excited that they'll want to tell their friends regardless of incentive. How can you make your customers rave about your product?
Significant rewards:
They reward both Friend and Advocate with something that makes them sit up and pay attention. They also have automatic reward fulfillment -- so they can apply rewards instantly, delighting their customers.
Active promotion
The referral program is open to all customers: the more Advocates, the more new customers they can get. The referral program has a dedicated page on their website, and they promote it in emails, like this:
We have customers that put these best practices to use, and as a result, they have extremely effective and profitable referral programs. Take a look:
Example: You Need A Budget
You Need A Budget has a very strong referral program for their personal finance app. In addition to having a great product, they use REALLY smart rewards:
First, their software is usually a one-time purchase, so using cash payouts as an incentive is critical in nudging people to spread the word. Discounts or store credit won't make sense.
On the other hand, the Friend’s reward is a *discount* for this personal finance software. Why? Well, look how this plays out: the Advocate identifies a Friend who needs help with managing their money. The Advocate recommends this particular budgeting software to help, AND makes it cheaper in the process with a discount.
Relevant referral reward within context of product = higher referral rates!
Active promotion is also a key part of their success. They use ReferralCandy's social network integrations to nudge their Advocates to spread the word. Check out these tweets:
Active promo of your referral program = more word of mouth sales
How successful your referral program will be is up to you. The effort you put into promoting your referral program can increase your store's monthly revenues anywhere from 1% to 5% to 10% and beyond.
Imagine adding a few % to your sales numbers every month.
That could be the difference between continuing sales growth and a series of painfully missed targets.
In the next email, I'll show you how the ReferralCandy app works and address some common questions.
Talk soon,
David Fallarme
Director of Marketing @ ReferralCandy
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