Your customers love what you do. And they’ll refer their friends if you use the right tools and tactics. So check out the referral marketing crash course below see for yourself how to do referral marketing. Be sure to embed this slideshow or tweet out to other marketers you know.
What’s in the course?
Everything you need to know about generating customer referrals and optimizing your virality. Includes practical examples from real online businesses, including Friendbuy customers that are just like you!
Referral marketing crash course
By Tony Mariotti @tonymariotti
I get tons of emails from marketers asking me… How can I run better referral campaigns? What kind of incentive should we use? Should we run a single-sided or double-sided incentive? How often should I refresh my campaign and offers?
These are ALL great questions!
But time and again I’ve noticed that marketers rarely focus on the one thing that will always help increase referrals…LOCATION, LOCATION, LOCATION!
1. Widget Location Increases Referral Program Participation
Here’s a typical conversation:
Marketer: “I want to give my customers the opportunity to share and refer friends after they make a purchase.”
Me: “That’s great! What’s your overall site conversation rate?”
Marketer: “Normal. Three to four percent on average.”
Me: “What are you doing about the other 97% of your site visitors?”
Making your program widely available to all visitors — in many locations, not just your checkout page — is hands down the best thing you can do to increase referral program participation. (The second best thing you can do is A/B testing, but that’s coming later. Yep, that’s a teaser…)
2. Four key locations to install referral widgets to increase user participation
a) Homepage – Trigger an overlay on your homepage or link to your stand-alone referral page
b) User Account Pages – Give logged in customers the ability to share from their account page
c) Post Purchase Page – Make sure you auto-pop that widget and you’ll get 10x more sharing
d) Stand-alone Referral Page – Create a landing page (i.e. yoursite.com/refer) and embed a widget on that page.
Those are just four ‘must have’ locations. I’ve also seen brilliant executions on blogs help desks outbound emails (transactional, newsletters, etc.) …essentially, any real estate you control.
By spreading out your widget locations, you will move the needle in a big way, increasing the visibility of your referral program — from just 3% on the post purchase page — to 100% of site visitors.
Oh, and one more key performance driver is Open Access Sharing. Friendbuy widgets do not force users to login before sharing with friends! Why? Because ‘forced login’ will drop user participation by 90% or more.
One question I get a lot is: “After setting up my widgets, what’s the first thing I should do that will have the greatest impact?”
3. Promote Your Referral Page For Immediate Results
The widgets you’ve placed on your homepage, user account page and post-purchase page will take care of themselves with your regular site traffic.
However, you can get immediate results by promoting the link to your referral landing page.
4. Five ways to promote your referral landing page to get results now:
a) Send a dedicated blast to your email list that links to your stand- alone referral page
b) Post the link to your Facebook fans
c) Post to Twitter followers
d) Post to LinkedIn followers
e) Include a banner in your email templates (order confirmation, newsletters, etc.) that links to your referral landing page.
Promoting your referral landing page to your email list and social followers ensures that you will come out of the gate in full stride.
Schedule your referral page promotion and stick to it, say once a month or every other month.
What’s next? OPTIMIZATION!
5. Referral optimization has two sides:
Sharing Rate (Getting more visitors to refer friends) and Referral Conversion Rate (Getting more friends to convert). The content of your widget impacts the sharing rate and referral visits.
a) Sharer Call to Action (What’s in it for them) – this copy compels the user to share.
Focus on this headline to optimize the sharing rate. You’ll want to A/B test this call to action.
b) Shared Content – this is the offer that friends will see. It compels them to click and visit your site.
Optimize referred visits by A/B testing the shared content.
c) Referral Conversion Rate – this is the greeting for the referred visitor (offer) that
Optimize the referral conversion rate by A/B testing the experience the referred visitor sees when arriving at your site.
6. A/B Testing: Optimize Calls to Action and Shared Content
How do you optimize the sharing rate? Here’s a real world example.
Background: For every referral widget viewed, on average 7% of people will share. You can get that result pretty easily.
However, Naturebox achieved a 50% sharing rate. Here’s how…
Here are a few Calls to Action they tested:
a) “Get 50% Off a NatureBox!”
b) “Get Half Off a NatureBox!”
c) “Get $10 for Free!”
Can you guess which Call to Action won?
“Get $10 for Free,” won by a long shot, lifting the sharing rate to 48.7%, well above a ‘reasonable’ rate of 7%.
The irony, of course, is that all of these offers are the same. NatureBox subscriptions are $20 per month. Mathematically speaking, the referral reward is always $10.
A/B testing the headline made all the difference!
Next, an example of optimizing the shared content to increase referral visits.
Shared Content – this is the offer that friends will see. It compels them to click and visit your site.
Optimize referral visits by A/B testing this shared content.
Birchbox ran a simple A/B test during the holidays, modifying only the title (Facebook title line) of their shared content.
Here are the two titles they tested:
a)“Birchbox – Deluxe Beauty Samples”
b)“Birchbox – The Perfect Holiday Gift”
Can you guess which headline won?
“Birchbox – The Perfect Holiday Gift,” doubled the number of users who clicked on the shared content AND doubled referral purchases. A double whammy!
All performance gains were achieved with just one copy change. Note that this test ran with no incentive, which is always an option for referral campaigns.
But wait! There’s more.
Here is a rundown of campaign metrics and elements to refine and test…
7. Additional Referral Campaign Elements You MUST Test
Referral Performance Metrics
As your referral program evolves and A/B testing is underway, focus on the following key metrics:
- Sharing Rate – Percentage of people who share when presented with a widget
- Referral Visits – Clicks on shared content
- Referral Conversion Rate – Percentage of referred visitors who convert
Referral Incentive Structures
Incentive structures will impact referral program performance.
- No Incentive – Sharing for the sake of sharing Incentive structures will impact
- One-Sided – One party (typically the sharer) gets something good Incentive
- Two-Sided – Both parties (the sharer and their friend) get something good
Types of Referral Incentives
These are the kinds of ‘carrots’ you can put in front of your customers to encourage them to share:
- Store credit
- Cash back
- Loyalty points
- Gift cards
- Access to special features (SAAS and web-based apps)
- Free month (subscriptions)
- Donation to charitable cause
- Special events (in-store or brick & mortar)
- Premiums (physical items like a tote bag)
- Extra entries for sweeps and contests
Types of Offers for Referred Visitors
The following ‘carrots’ for referred friends will boost conversion rates for new customer acquisition.
Everything on the previous slide, plus…
- Discounts (10% off your first order)
- Free trial
- Free shipping
- Limited time offers
You’ve completed the Referral Marketing Crash Course!
a) Best practices for widget placement and promotion.
b) Real world examples of high-performing referral campaigns
c) A/B tests that have massively boosted campaign performance
d) Performance metrics and incentive structures
Everything we’ve covered can be implemented immediately and effectively with Friendbuy. If you’ve come this far, you should give yourself the power to truly knock your referral marketing out of the park. Sign up for a 30-day, no risk free trial. Click here to get started!