A MarketingSherpa email subscriber recently asked for relevant case studies on referral marketing campaigns. If you’re also looking for ideas and tactics to launch or optimize your own referral programs, here are four case studies that have some interesting examples.
(And if you find this blog post helpful, click on one of those Twitter, Facebook or other referral buttons at the top of this blog post.)
Triggered email nets 75% of referral program signups for Roku
Roku, a video-streaming device for television, discovered that about 25 percent of its customers heard about the company from a friend or family member. The team already offered rewards to customers who sent referrals via email, Facebook or Twitter.
To get even more customers to participate, the team planned a triggered email campaign to Roku’s newest customers. They offered incentives for both the referrer and the newly referred customer — a free month of Netflix for each friend who tries Roku, along with a 10% discount to the newly referred customers.
Of all the channels through which customers could send referrals to contacts, referrals sent via email drove 70 percent of all sales in the program.
“Email has been the biggest way to promote [referrals],” said Lomit Patel, Senior Director, Direct Marketing, Roku. “The newsletters definitely help, but these individual emails after purchase have had the most effect.”
Hall and Yoon tell the story of Steve Hughes, now the CEO of Sunrise Strategic Partners. He was walking through a Tropicana factory when he noticed some workers on break taking the excess pulp (a waste product in orange juice production) and mixing it into juice they would drink themselves.
Instead of ignoring the workers or just assuming their behavior was odd, Hughes got curious and asked them about it. They explained that it made the juice taste fresh squeezed. This interaction gave Hughes the idea to launch Tropicana Grovestand “the taste of fresh-squeezed orange juice,” which after four years became a $500 million brand.
That is just one example of turning waste into profit. Throughout history, curious business people have not only used this process to launch complementary brands in their own company like Hall and Yoon’s Tropicana example, they’ve also launched entirely new companies off their company’s waste (Kingsford was created when Henry Ford turned wood scraps from Model T manufacturing into charcoal briquets) and launched new brands off other companies’ waste (I interviewed TerraCycle CEO Tom Szaky back in 2007, and since then, the company has made everything from pencil cases to furniture out of other brands’ waste).
Even though it is obvious content marketing for Google, it’s still a very good book. It’s six years old at this point, so I’m sure you’ve heard the term Zero Moment of Truth (ZMOT) by now, but there are still many good ideas you can get from the book to improve your content and other digital marketing.
The power of ratings and reviews
As he explains in the book, Lecinski’s ZMOT term is a play off a quote from Procter & Gamble CEO A.G. Lafley (p. 11, Lecinski, 2011):
The best brands consistently win two moments of truth. The first moment occurs at the store shelf, when a consumer decides whether to buy one brand or another. The second occurs at home, when she uses the brand — and is delighted, or isn’t.
That got me thinking of creating my own play off of ZMOT that ties into Lafley’s Second Moment of Truth.
In much of the book, Lecinski explains how important ratings and reviews are for a range of products thanks to how friction-free getting this information is on the internet versus the pre-internet days. No longer are people only reading the print edition of Consumer Reports to get reviews on cars and washing machines, now they search reviews on everything.
“When I go to a presentation at, say, a Hilton Hotel, I tell the audience this: ‘There are more reviews online for the Bounce Dryer Bar than there are for the hotel we’re sitting in right now.’” he says (p. 38, Lecinski, 2011) He says that 70% of Americans now say they look at product reviews before making a purchase (p. 10, Lecinski, 2011).
For B2C marketers, the holiday gift-giving season is the time of year when we drive the most revenue. So, to get the most out of the last 24 shopping days of the season, we thought a bit of insight and inspiration from your fellow marketers could be helpful. Here are a few of our favorite tips from ecommerce marketers interviewed at the MarketingSherpa Media Center at IRCE that you can apply immediately to your marketing efforts.
Whether you’re working at a startup like Mitch Goldstone, ScanMyPhotos.com, and Gaston Frydlewski, Hickies, Inc., or are part of a larger organization like Mark Friedman, Steve Madden, these tips can be applied to your customer-first marketing efforts this holiday season and throughout the upcoming year.
Tip #1: Turn those holiday shoppers into brand advocates by going above and beyond in your customer service
“When someone receives their order, their digitized photos, they [become] my marketing team,” said Mitch Goldstone, CEO, ScanMyPhotos.com.
Since ScanMyPhotos.com digitizes physical photographs, Goldstone and his team are often privy to a very personal aspect of their customer’s lives, their old family photos. Because of this, it is important to the team that they humanize the customer experience as much as possible.
Watch the full interview below to learn how thinking outside the box when it comes to customer service (sending flowers along with completed orders), has resulted in ScanMyPhotos.com customers becoming brand advocates and content contributors.
Tip #2: Utilize user-generated content to drive more traffic to your ecommerce site this season
Are you getting the most out of those blog and social media posts that your brand is tagged in? Is there really a better way to advertise your product than letting your customers do your bragging? Take a note from the playbook of Mark Friedman, President of Ecommerce, Steve Madden, and make sure you’re using this user-generated content to its fullest extent.
Every week (as the name suggests), I write the Marketing Sherpa Chart of the Week email newsletter. And so, every week, I come across interesting research and data, along with sources that add analysis and color to that research.
Usually, that analysis is confined to the MarketingSherpa Chart article. However, this week, my cup especially runneth over with good ideas and analysis that I thought you might find helpful on your ecommerce sites, especially as you set the groundwork for your holiday marketing initiatives.
When I interviewed Tom Collinger, the Executive Director of the Spiegel Research Center at Northwestern University, and Edward Malthouse, professor at Medill Northwestern and the Research Director of the Spiegel Center, we went well over our allotted time.
You can see their data and some of their analysis in this week’s Chart of the Week article — Ecommerce Chart: Star ratings’ impact on purchase probability. But if you’d like a deeper understanding of their research into how online reviews affect sales, I’ve included a lightly edited transcript of our conversation below. To make the transcript easily scannable for you, I call out key points with bolded subheads
Bringing evidence to the answer of how newer forms of consumer engagement with brands drive financial impact
Daniel Burstein: Why don’t we jump in and you give me a high level of the type of work you’re doing here? I believe, Tom, we may have had you as a source in the past at one point.
Much of the buzz about Amazon’s agreement to buy Whole Foods has focused around the new physical distribution channel, especially for fresh food, that Amazon will now be able to leverage. And bricks-and-mortar retailers — especially grocers — are woefully behind in the use of technology in commerce. Of course.
But if that was the case, Amazon could have bought any retailer. Why Whole Foods specifically? Why a company that was likely more focused on the Amazon rain forest than Amazon.com until today?
Whole Foods Market is a high-touch, decadent customer experience company. Amazon is a low-touch, high-efficiency company. This is not a natural fit. It would have been more of a natural fit for Amazon to start experimenting with a regional, low-price-oriented supermarket like Southeastern Grocers (sure, they wouldn’t get the instant national presence, but they would acquire a large testing lab to optimize the business model).
While Amazon acquired Zappos, Soap.com, Diapers.com, etc. — it is not a particularly acquisitive company. And while much news has been made about a hedge fund’s involvement, this acquisition doesn’t reek of financial engineering like so many other M&A deals have.
As marketers become fully entrenched in the hectic holiday season, it’s easy to just keep to the schedule while letting customer engagement opportunities pass by.
Derek Kazee, Director of Retention Marketing, Ebates, and I spoke about this issue in the Media Center at MarketingSherpa Summit 2016 about how his team overcame the biggest holiday season obstacle — cutting through the noise.
By reacting quickly after some holiday inspiration, Derek and his team quickly mobilized to engage with members about current and upcoming promotions in a fun and informative way.
“I got an idea to do something different, which was actually to remind and to preview all of the promos we were going to launch because I was having trouble keeping track of it myself,” he said.
Derek came into the office with that idea and challenged his team to come up with something that would be informative, non-promotional and engaging at the same time. As a result, one of the copy writers rewrote “’Twas the Night Before Christmas,” and it was designed in just one day.
If you’re an entrepreneur running a startup and begin to find some success, you will likely face a crossroads:
Should I bootstrap, funding the business myself with personal savings and/or ongoing revenue?
Should I procure funding and give away ownership interests to a venture capitalist or private equity firm?
To help you make this decision, we interviewed Brian Fricano, Founder/CEO, Sustainable Supply. He is an entrepreneur who has weighed the pros and cons of each option and made this decision for his own startup.
Brian and his wife launched Sustainable Supply seven years ago as a business with a social mission. “The core of what we were trying to do was sell products for commercial buildings that save water and save energy,” Brian said.
Profitable from day one
They started the business without any outside funding, according to Brian.
“Bootstrapping has forced us to be profitable from day one,” Brian said.
Without a cushion of outside funding, the company had to be creative, and launched with a “drop shipping” model, in which products are shipped directly to customers after they purchase and not to a retailer’s warehouse.
“We signed up dozens of suppliers that were willing to drop ship on our behalf, so we were able to become a virtual distributor, never taking possession of inventory,” he said.
Not only did the drop shipping model allow Sustainable Supply to start operations without the need to invest in inventory, it also tied into its social mission by reducing the carbon footprint and pollution generated from shipping products twice (first to the retailer, and then to the customer).
Success brings offers of capital
Sustainable Supply was successful, and was named the fifth-fastest growing retailer on the Inc. 500 list of America’s fastest-growing companies. This attracted the attention of venture capitalists interested in investing in high-growth startups.
This decision has worked for his company for two reasons. First, Brian would have diluted his ownership if he accepted the investment.
“Our growth after that has [grown four times over] since we made the Inc. 500 list. Had we brought on investors, we would have given away too much too early in the process,” Brian said.
Sticking to its social mission
In addition, his company has a social mission. Its tagline is “Build. Work. Green.” While there are a few exceptions, most venture capitalists are focused on growth and profitability, and less concerned with a social mission.
“Each venture capitalist has its own specialty, not a lot are specialized in sustainability…there’s not a lot out there that have a social component to them,” Brian said.
But I had a deeper conversation with Joe Peppers, the Ecommerce Market Sector Leader at The Weitz Company.
But previously, Joe went to West Point and served three tours of duty in Iraq as a Captain in the U.S. Army, before going on to work in ecommerce for Amazon, Apple, Fanatics.com, and now The Weitz Company.
I discovered some interesting lessons from military service that can be applied to ecommerce, so we sat down to talk about it…
Personally, I have two big takeaways from this conversation.
Additionally, Mark mentions the company’s community of rabid Steve Madden fans in social channels and through the SM Mag.
“It’s crazy how people feel about the brand. We incorporate that into the site, and that gives others some perspective of how some people are wearing it. You’re getting to see not only the product that they bought, but their complete look and how they put it together,” Mark said.
Of course, because the business is 80% wholesale, Steve Madden can’t just leave partners out in the cold. To balance its relationship with partners, Mark mentions the team employs a variety of tactics, including:
Syndicate product photography done in-house
Syndicate product reviews that were written on SteveMadden.com
Infographic: How to Create a Model of Your Customer’s Mind
You need a repeatable methodology focused on building your organization’s customer wisdom throughout your campaigns and websites. This infographic can get you started.
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