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How Top Brands Use Referral Programs to
Drive Customer Acquisition
Tony Mario!i, COO, Friendbuy

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@thuelmadsen
#KISSwebinar
Join us on Twi!er

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Tony Mario!i
COO
Friendbuy
!
@tonymario!i
Your presenters
Thue Madsen
Marketing Associate
KISSmetrics
!
@thuelmadsen

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@tonymariotti
#KISSwebinar
Join us on Twi!er

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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:

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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…

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People always ask:
“How do I get more referrals?”
!
That’s easy.
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Focus on two things that
really move the needle.
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User participation
&
Optimization

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

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User Participation
Location ma!ers

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Homepage & Navigation
Best practices:
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• Site-wide
• Highly visible (upper-le#)

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Order Confirmation Page
Best practices:
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• Pop-up overlay
• Varied offers

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User Account Page
Best practices:
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• Embedded
• On bu!on click - if you have to
• PURLs

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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

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Dedicated Email Blasts
Best practices:
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• Single call to action
• Clear offer
• Schedule (monthly / quarterly)

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Your ‘reach’ may be bigger than you think…
1 Website
Homepage, navigation, order confirmation, user accounts, product pages,
stand-alone referral page…
2 Email
Stand alone blasts, transactional (registration confirmation, order
confirmation), newsle!er templates, receipts / invoices…
3 Social followers
Twi!er, Facebook, LinkedIn…
4 Blog pages
5 Help desk pages / support ticket signatures / scripts

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Optimization
Increase sharing rates and
referral conversion rates

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What to measure
Shares
!
Widget Impressions
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= Sharing Rate
Conversions
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Referral Visits
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= Referral Conversion Rate
Referral Visits

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Sharing Rate - optimize call to action
Best practices:
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• Clear call to action
• What’s in it for them
• What their friends get (if double-sided)
• Address book importing

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Sharing Rate - optimize call to action
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.

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Sharing Rate - optimize design
+ 42% sharing rate
• Red, italic headline
• Background image

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Referral Visits - optimize shared content
A B C
• Purple bracelets • Green bracelets
• “Expires in 24 hours!”
• Woman on beach
• “Expires in 24 hours!”
+ 35% Gain

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Referral Visits - optimize shared content
Doubled referral visits and referral sales

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Referral Visits - optimize shared content
Hey 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:
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• Message is on-brand
• Always testing

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Referral Conversion Rate - welcome referred visitors
Best practices:
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• Welcome overlay
• Friend incentive
• Email capture
• Reveal code

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Referral Conversion Rate - welcome referred visitors
Best practices:
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• Session-based
• Dynamic message

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Referral Conversion Rate - welcome referred visitors
Best practices:
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• Dedicated landing page
• No distractions

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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

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Calls to Action - quick tips
Tip 1: Verb + What’s in it for me?
Tip 2: “I want to ___________.”
• Get $10 in store credit.
• Get a free month.
• Give $10, Get $10
• Share and earn $10

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Referral Benchmarks
How are you doing?

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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.)

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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.)

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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.)

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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.

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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

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Examples of Campaign Metrics
Example companies by size

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Where to start optimizing (30 day snapshot - 3 companies)
a Rockin’
b Work on sharing rate
c Work on conversion rate

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Party Foul
!
The biggest mistake people make . . .

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

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Recap
Follow best practices and avoid
common pitfalls.

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Recap
User Participation Optimization

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Do’s and Don’ts
Do Don’t
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
User
Participation
Optimization

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Looking for more?
!
For additional in-depth articles about the topics
we’ve covered, you can check out
friendbuy.com/blog

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Questions?
Tony Mario!i
COO
Friendbuy
@tonymario!i
tony@friendbuy.com
Thue Madsen
Marketing Associate
KISSmetrics
@thuelmadsen
tmadsen@kissmetrics.com

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THANK YOU
Tony Mario!i
@tonymario!i
tony@friendbuy.com