6 Referral Marketing Best Practices To Turn Customers Into Word-Of-Mouth Marketers

1. 6 Referral Marketing Best Practices to Turn Customers into Word of Mouth Marketers

2. Agenda 1.  Overview of Retail Landscape 2.  What is a Referral Program? 3.  6 Best Practices for Referral Programs 4.  Expected Results and Case Studies 5.  Q&A

3. #WoM Type ques)on here Welcome Webinar A0endees

4. #WoM Follow This Webinar On Twi0er #WoM

5. #WoM About Retail TouchPoints ü  Launched in 2007 ü  Over 26,000 subscribers ü  To provide executives with relevant, insightful content across a variety of digital medium Free subscription to our weekly newsletter: WWW.RETAILTOUCHPOINTS.COM/SIGNUP

6. #WoM Panelists Angela Bandlow VP of Marketing Extole Alicia Fiorletta Associate Editor Retail TouchPoints MODERATOR Ashley Futak Senior Marketing Manager Extole

7. Overview of Retail Landscape

8. #WoM Consumers Trust Social Media Connec)ons More Than Brands of U.S. consumers say they trust brand and product recommendaBons from friends and family. of consumers say they trust posts created and shared by brands and companies on their social accounts. Only Source: Forrester Research, "How To Build Your Brand With Branded Content"

9. #WoM As If You Needed Addi)onal Proof… Source: Nielsen, Social Media Report 2012 of social media users learn about brands, products and services through social networks. of users hear about their friends' and colleagues' experiences using those products and services.

10. #WoM A New Era Of Brand-‐To-‐Shopper Communica)on "The days when companies could Bghtly control brand messaging and progress consumers along a linear purchase funnel have long ended. Social media has fundamentally changed the consumer decision journey. Consumer decisions and behaviors are increasingly driven by the opinions, tastes and preferences of an exponenBally larger, global pool of friends, peers and inﬂuencers." Source: Nielsen Research, Social Media Report 2012

11. #WoM Iden)fying The Value Of WOM Source: MarketShare WOM increases markeBng eﬀecBveness by up to 54%

12. #WoM ü  A discount code or coupon for “Liking” or Following a brand page (35%) ü  Access to limited-‐Bme offers for sharing social content (35%) ü  Discounts on e-‐Commerce purchases for referring friends and family (20%) Retailers find the most effecBve incenBves for social communicaBon to be: Source: 2013 Social Commerce ImperaBves survey, Retail TouchPoints 59% of Retailers have a Social Commerce strategy in place in 2013, up from 48% in 2012. How Retailers Are Keeping Pace

13. #WoM Learn From Some Of The Thought Leaders Bonobos PoWery Barn

14. What is a Referral Program?

15. Extole: the Leader in Referral Marketing Page 15 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL. Drive acquisition through customer word of mouth: •  Launch world-class customer referral programs •  Tap into a new high- value marketing channel About Extole: – Founded in 2009 – 300 leading brands TRY BRAND “X”

16. The Challenge: Rising Above the Noise Page 16 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL. WOM recommendations break through the noise 3000 brand impressions / day 92% of consumers trust recommendations from friends, 33% trust online ads - Nielsen 80% of all purchase cycles involve some form of WOM recommendation - Forrester WOM recommendations convert at 3-5x other channels - WOMMA

17. Overview of a Referral Program Page 17 A referral program is an end-to-end program to: • Engage a brand’s customer advocates • Foster sharing of referrals from advocates • Convert friends into new customers • Monitor performance and optimize results © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

18. Folica: Turning Advocates into Marketers Page 18 GOAL: • Acquire new customers via referrals from existing customers PROGRAM: •  Advocate: $10 credit •  Friend: $10 off first purchase PROMOTION: •  Website, Facebook, email, Twitter & newsletters INDUSTRY: Retail, Health & Beauty © 2013 Extole, Inc. All rights reserved. Proprietary/Confidential.

24. The Bottom Line RESULTS: (After 30 days) • Advocates………………..6,000+ • Shares per Advocate……4 • Total Shares…………….. 21K • Email Open Rate………..93% • Conversion Rate………...16% 24 © 2013 Extole, Inc. All rights reserved. Proprietary/Confidential.

25. 6 Best Practices for Referral Marketing Programs social referrals amplify brand reach

27. 1. Creating a Compelling Offer •  What to consider: –  Compelling offer for customer advocates –  Unique offer for the friend –  Balanced offer structure –  Testing and optimizing •  Offers – what will resonate with your customers? –  Free goods, discounts, exclusive product, loyalty points –  Related products –  Gift cards –  Charitable donations Page 27 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

29. 2. Promoting the Program •  What to consider: –  Promotion across owned assets •  Website •  Email lists •  Communities •  Social networks –  Promoting at key customer touch points •  Order confirmation pages •  Purchase confirmation emails •  Pop-up messages and banner ads within digital products –  Keeping promotions fresh with a clear CTA Page 29 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

31. 2. Promoting the Program Page 31 36% 21% 11% 11% 6% 4% 3% 3%2%2%1% Homepage Post-purchase Newsletter Email In-Product Other Dedicated Email My Account Page Dedicated Page 'Drip' Remarketing Email Header/Footer Social Media Post Participation by Promotion Placement © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

32. 3. Making it Easy for Advocates to Share •  What to consider –  Messages: Default or Advocate Created •  Sharing channels –  Email –  PURL –  Facebook –  Twitter Page 32 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

34. 3. Making it Easy for Advocates to Share •  Email Sharing –  1 to 1 share –  Personal recommendation –  Highest conversions •  Default Messages –  Read like a story with a personal touch –  Tells the friend about the offer they will receive –  Include what the advocate gets if the friend converts Page 34 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

35. 3. Making it Easy for Advocates to Share •  PURL (Personal URL) Sharing –  Personalized links which brands can provide to advocates to share programs with friends across channels and platforms –  Simple, flexible, can be used for 1 to1 or 1 to many sharing –  Less control for brand •  Default Messages –  N/A Page 35 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

36. 3. Making it Easy for Advocates to Share •  Facebook Sharing –  1 to many share with friends –  Social context –  Higher amplification than 1 to 1 shares •  Default Messages –  Read like advocate speaking directly to friends –  Include rationale for why they are sharing with friends Page 36 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

37. 3. Making it Easy for Advocates to Share •  Twitter Sharing –  1 to many broadcast share –  Highest amplification, lowest conversion •  Default Messages –  Condensed message to world at large (140 characters) –  Use @TwitterHandle for brand to increase SEO –  Use hashtag (#) for program Page 37 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

38. 4. Personalizing the Friend Experience Page 38 •  What to consider –  Make it short and to the point –  Describe the offer –  Make it personal –  Keep the CTA simple © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

41. 5. Keeping the Program Top of Mind: Remarketing Page 41 10.5% increase in advocates engaged 14% of all advocate shares 29.5% of all final conversions © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

43. 6. Monitoring and Optimizing the Program •  What to consider –  Visibility into program funnel –  Ongoing testing •  Offer •  Promotional placements and copy •  Default sharing messages •  Remarketing –  Optimization Page 43 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

45. 6. Monitoring and Optimizing the Program Page 45 Launch Referrals grew From 15 to 3,000 Largest Acquisition Channel Optimization Period Financial Services Example © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

46. Expected Results & Case Studies social referrals amplify brand reach

48. The Referral Marketing Funnel Page 48 30-50% email open rates 20-60% of customers become advocates Advocates share an average 5.4X 3-5X conversion rate advocates shares referrals conversions shares per advocate clicks per share conversion rate © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

49. Channel Performance Page 49 Facebook PURL Email Twitter Email Facebook PURL Twitter Facebook PURL Email Twitter Email Facebook PURL Twitter Clicks per Share by Channel Conversion Rate by Channel highest in social channels—Twitter is highest; email is lowest. Conversion rate is highest in one-to-one sharing—email is highest; Twitter is lowest. © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

50. Quantifiable Marketing Results Page 50 30% Referrals 2.3M Stories 500K Revenue$ Entertainment / Media Consumer Electronics Online Health & Beauty 233% AOV 5000 Customers 433% Conversions Financial Services Automotive Online Apparel Awareness Referral Rate Conversion Rate Customer Acquisition Revenue Average Order Value 6 Months 11 Months 30 Days 150 Days 30 Days 45 Days © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

51. Women’s Retailer: Boosts Referral Sales 4x Page 51 GOAL: •  Drive WOM recommendations to boost sales and build community PROGRAM: •  Original Offer: $10 for advocate, $10 for friend •  Double Rewards: $20 for advocate, $20 for friend RESULTS: (Per Month) Original Double •  Advocates………… 10K+…… +33% •  Share Rate……….. 2.3……… +57% •  Friend Clicks……… 12K+ …... 3x •  Sales………………. 1000+….. 4x Retail: Apparel © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

52. Roku: Driving Sales via Customer Referrals Page 52 GOAL: •  Drive new customer acquisition through word of mouth referrals PROGRAM: •  Advocate: free month of Netflix RESULTS: (After 6 months) •  Advocates……………….. 40k+ •  Referrals per Month.…… 10k •  Revenue…..…………….. $250K •  Customer Referrals…….. +30% INDUSTRY: Consumer Electronics © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

53. Conclusion •  Word of mouth is a critical marketing channel •  Referral programs harness the power of brand advocates to drive new sales and acquisition •  Best Practices Recap: 1.  Create a Compelling Offer 2.  Promote the Program 3.  Make it Easy for Advocates to Share 4.  Personalize the Friend Experience 5.  Keep the Program Top of Mind 6.  Monitor and Optimize the Program Page 53 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

54. Q&A •  Submit all questions via the Questions section of your GoToWebinar Control Panel and send to either presenter Next Steps •  Download this presentation at: http://rtou.ch/womwebinar •  Download Extole’s Ultimate Referral Marketing Guide – extole.com •  Stay Current on Extole News and Happenings! –  extole.com/blog/ Page 54 © 2013 Extole, Inc. All rights reserved. PROPRIETARY/CONFIDENTIAL.

55. | 877 739 8653 | hello@extole.com | Contact Us 625 2nd Street St. #101 San Francisco, CA 94107 Thank You

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