Tony Mario!i, COO, Friendbuy

How Top Brands Use Referral Programs to Drive Customer Acquisition

@thuelmadsen#KISSwebinar

Join us on Twi!er

Tony Mario!i COO

Friendbuy !

@tonymario!i

Your presenters

Thue Madsen Marketing Associate

KISSmetrics !

@thuelmadsen

@tonymariotti#KISSwebinar

Join us on Twi!er

Introduction to Friendbuy www.friendbuy.com

Friendbuy is a customer referral platform. Marketers build campaigns, A/B test and track results to accelerate customer acquisition without

the hassle of ge!ing dev teams involved every time they want to make changes or generate reports. Referral programs are incredibly cost

effective, delivering single-digit CPAs.

We’re going to cover best practices that top brands use to drive referrals and customer acquisition:

The following best practice examples come from

companies that actually sell something.

!

What follows should be especially helpful to marketers who are

looking to acquire new, paying customers today.

!

Referral programs can drive anywhere from 7% to 30% of your new customers, and a CPA

well under $10 bucks. That’s what we’re going to talk about…

WATCH WEBINAR RECORDING NOW

People always ask: “How do I get more referrals?”

!

That’s easy. !

Focus on two things that really move the needle.

!

User participation &

Optimization

Again, two things really ‘move the needle’ for referral program performance.

User Participation Optimization

User Participation Location ma!ers

Homepage & Navigation

Best practices: !

• Site-wide

• Highly visible (upper-le#)

Order Confirmation Page

Best practices: !

• Pop-up overlay

• Varied offers

User Account Page

Best practices: !

• Embedded

• On bu!on click - if you have to

• PURLs

Stand Alone Referral Page

Promote / drive traffic from: !

• Homepage & Navigation

• Dedicated email blasts

• Trigger emails & newsle!ers

• Social following

• Customer service follow up

• Email signature

Dedicated Email Blasts

Best practices: !

• Single call to action

• Clear offer

• Schedule (monthly / quarterly)

4 Blog pages

Stand alone blasts, transactional (registration confirmation, order confirmation), newsle!er templates, receipts / invoices…

5 Help desk pages / support ticket signatures / scripts

2 Email

Your ‘reach’ may be bigger than you think…

3 Social followers

Twi!er, Facebook, LinkedIn…

1 WebsiteHomepage, navigation, order confirmation, user accounts, product pages, stand-alone referral page…

LOG IN WITH GOOGLE

Start Your Free KISSmetrics Trial

Optimization Increase sharing rates and

referral conversion rates

Shares !

Widget Impressions !

= Sharing Rate

What to measure

Conversions !

Referral Visits !

= Referral Conversion Rate

Referral Visits

Sharing Rate - optimize call to action

Best practices: !

• Clear call to action

• What’s in it for them

• What their friends get (if double-sided)

• Address book importing

1 Get Half Off a NatureBox!

2 Get $10 for free!

3 Get 50% off your next NatureBox!

4 Get $10 when you snack with friends!

The irony here is that a NatureBox costs $20. So all

the offers are mathematically the same. But #4

outperformed the rest and drove up sharing rates.

Sharing Rate - optimize call to action

Sharing Rate - optimize design

+ 42% sharing rate

• Red, italic headline • Background image

Referral Visits - optimize shared content

• Purple bracelets • Green bracelets • “Expires in 24 hours!”

• Woman on beach • “Expires in 24 hours!”

A B C

+ 35% Gain

Referral Visits - optimize shared content

Doubled referral visits and referral sales

Referral Visits - optimize shared contentHey Pal,

You're one of my smartest friends, so you're

probably pre!y fed up with overpaying for razors.

I was, so I joined Dollar Shave Club. They deliver

great blades to me every month for just a few

bucks. No more schlepping to the drugstore and

no more overpriced, ridiculous shave tech that I

don't need.

Razor plans start at just $3/month. Check it out

and let me know what you think.

P.S. When you use this link to join, I get $5. Cha-

ching!

Doubled referral sales

Best practices: !

• Message is on-brand

• Always testing

Referral Conversion Rate - welcome referred visitors

Best practices: !

• Welcome overlay

• Friend incentive

• Email capture

• Reveal code

Referral Conversion Rate - welcome referred visitors

Best practices: !

• Session-based

• Dynamic message

Referral Conversion Rate - welcome referred visitors

Best practices: !

• Dedicated landing page

• No distractions

1 Offers for sharer & friend

2 Calls to action for sharer & friend

3 Shared content (copy & images)

4 Shared email subject line

Elements for testing

5 Referred visitor experience

Tip 1: Verb + What’s in it for me?

Tip 2: “I want to ___________.”

Calls to Action - quick tips

• Get $10 in store credit.

• Get a free month.

• Give $10, Get $10

• Share and earn $10

Referral Benchmarks How are you doing?

Sharing

Sharing Rate Several Friendbuy partners have exceed a 50% sharing rate, a worthy optimization goal for anyone.

The sharing rate will vary by widget location (homepage, user account pages, order confirmation page, etc.) So ge!ing as many widget placements as possible is highly encouraged.

Here are sharing rate benchmarks (aggregate across placements):

• 7% – meh

• 15% – solid

• 30% – you’ve nailed it

How you can improve Sharing Rate

• A/B test offers (store credit, free gi#, etc.)

• A/B test content (copy, design, images, etc.)

Referral Visits

Visits per share The tricky part here is that Facebook and Twi!er don’t report impressions, busting the normal click-thru rate marketing calculation - the number of friends who see shared content on Facebook, Twi!er or an email message and click to visit your website. While email reporting does include opens, unique opens, and CTR, the best way to approach this - in aggregate and normalized across all channels - is to measure the number of visits per share. That levels the playing field.

Here are referral visits (per share) benchmarks:

• 1 visit per share – meh

• 2 visits per share – solid

• More than 5 visits per share – you’ve nailed it

How you can improve Visits Per Share

• A/B test offers (store credit, free gi#, etc.)

• A/B test shared content (copy, design, images, etc.)

Referred Visitors Conversions

Referral conversion rate The referral conversion rate is the percentage of referred visitors (friends) that convert when they get to your site.

Referred visitors should convert at a higher rate than your organic conversion rate.

Here are referral conversion rate benchmarks.

• Less than 4% - meh

• 10% - solid

• More than 15% - you’ve nailed it

How to improve the Referral Conversion Rate

• A/B test offers (store credit, free gi#, etc.)

• A/B test shared content (copy, design, images, etc.)

Cost Per Acquisition

CPA Referral programs yield ‘single digit CPA’s.’ That is to say, your new customer acquisition cost is less than $10.

Compared to display advertising ($40 CPAs), Pay Per Click ($30) and retargeting ($10), referrals are extremely efficient.

Here are customer referral program CPA benchmarks:

• $9 CPA - meh

• $5 CPA - solid

• $2 CPA - you’ve nailed it

Key Takeaway: Single-digit CPAs.

Revenue

Li! on Revenue Referral programs contribute to the bo!om line in a very meaningful way.

Here are revenue li# benchmarks:

• Less than 5% - meh

• 5 to 15 % - solid

• 30% - you’ve nailed it

Examples of Campaign Metrics Example companies by size

Where to start optimizing (30 day snapshot - 3 companies)

a Rockin’

b Work on sharing rate

c Work on conversion rate

Party Foul !

The biggest mistake people make . . .

Don’t force a login or registration 90% drop off!

Recap Follow best practices and avoid

common pitfalls.

Recap

User Participation Optimization

Do’s and Don’ts

Open access Let anyone refer Force a login

Availability Make it visible, everywhere Bury it in your footer

CTA’s & Offers Be clear & concise Be wordy or vague

Test Measure and optimize Set it and forget it

Do Don’t

User Participation

Optimization

Looking for more? !

For additional in-depth articles about the topics we’ve covered, you can check out

friendbuy.com/blog

Questions?

Tony Mario!i COO

Friendbuy @tonymario!i

tony@friendbuy.com

Thue Madsen Marketing Associate

KISSmetrics @thuelmadsen

tmadsen@kissmetrics.com

THANK YOU

Tony Mario!i @tonymario!i

tony@friendbuy.com