Raul’s spent the last five years at ReferralCandy helping eCommerce brands turn the loyalty they’ve built with their existing customers into a new customer acquisition channel!
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Before joining ReferralCandy, Raúl was working in sales and business development for a company selling recruitment services to startups.
While looking for a career change, he chanced upon ReferralCandy and what got him interested was the thought of having a tool that leveraged existing customers to create loyalty and acquire new customers.
He applied at ReferralCandy by reaching out to the CEO and the rest he says, is history.
Why Referral Marketing?
Raúl gives two reasons:
- It’s building on something that your business already has, which are customers that talk about your products on different platforms.
- It’s a cost-effective way of acquiring new customers.
He also says it’s a situation wherein everyone wins: existing customers are happy to get an incentive for referring a friend, the friend is happy getting a first-purchase discount, and the brand is happy to acquire a new customer at a low cost and also retain an existing one.
When’s The Best Time To Upgrade Your Referral Program?
Put in place a baseline, which for Raúl would be having a good product and having happy customers, regardless if you’re a startup or an established brand.
From there, build out your referral program but set expectations and goals that are aligned with where you are right now in your business.
Good Levels Of Reward
So many options are available and what a brand implements will depend on different factors, but really think about what would incentivize your customer to refer a friend.
You can offer discounts or free products, and the former will be based on the budget allotted for the program. Companies that sell subscriptions can offer free renewals or additional monthly packages.
What’s interesting to note is that you can also think of giving a bigger discount to the one who was referred, rather than the one who made the referral.
Referrals, Affiliates, And Influencers
Referral marketing, and affiliate and influencer marketing have a similar goal: to find people who will drive new customers to your website and buy your products.
Each strategy comes with different types of rewards, but they are essentially incentivizing your audience to go out and refer more people to your brand.
If you’d like to know more about affiliate marketing, click here to listen to more episodes on the topic.
If we’ve inspired someone to take their first step with loyalty marketing – what do they need to know to give themselves the best chance of success?
Talk to your customers and find out if they’re happy and have the potential of referring more people to you.
A simple test you can do is to run a net promoter score survey, which will give you an idea if you’re in a good place to begin your program.
Once you’ve started of course you’ve got to ‘keep optimising’! So what’s your favourite way to improve loyalty marketing performance?
Try different incentive schemes, monitor the results, and grow your program based on the data you gather.
If someone listening wants to learn more about loyalty marketing is there one cheap/free resource you’d recommend?
Raúl recommends the book Influence: The Psychology of Persuasion by Robert Cialdini which talks about how we are influenced and incentivized as humans.
It provides insights on how we can influence customers to refer their friends, which can be used by those in marketing.
Crystal ball time – what’s coming up in the next 6-12 months that we should be getting ready for in loyalty marketing?
Raúl mentions a couple of things:
- Customer retention has been getting and will continue to get more focus.
- Approaching the busiest time of the year, establish a good post-purchase journey of your new customers.
Raúl on Social media:
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