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The Art of the Social Referral




Word of Mouth marketing has been around since the town crier stood on the street corner hawking the day’s news. But with the dawn of the internet and social media specifically, the concept has expanded. We’ve gone beyond what one housewife tells another during their weekly bridge game. Now, we have one person broadcasting their opinions to hundreds, even thousands with a single Tweet or Facebook post.

These social referrals are extremely valuable to a marketer. So much so, that it’s often worth rewarding customers for spreading the word among their friends. But managing and tracking such a program can be overwhelming so I asked Angela Bandlow, VP of Marketing for Extole to offer some tips for making the most out of social referrals.

Will you start by explaining was social referrals are? Can you share an example?

Angela: Social referral programs are end-to-end marketing programs that enable brands to reach out to highly-engaged, loyal advocates and turn them into “social advocates” – who, in turn, refer the brands and products or services they sell to their friends and social communities. Social referral programs, by nature, tap into consumers need and want to share information and content with their peers, resulting in Consumer-to-Consumer (C2C) social marketing. If brands can properly harness the power of C2C marketing, they can tap into a new, high-value marketing channel. This new channel cannot only help brands produce highly qualified new customers and sales, boost traffic and awareness and give them deep insight into customer behavior across their social graphs, but also foster consumer-generated content to increase their search engine result placement.

As an example, Extole powers a social referral program for Folica, an online retailer of hair care products. Folica knew from reading its product reviews that new customers often purchased from the site because friends had told them about it. Wanting to reward and accelerate such word-of-mouth recommendations online, Folica teamed up with Extole to launch a social referral program to track, manage, and monitor referrals from its loyal customer advocates. The program offers existing Folica advocates a $10 credit toward future purchases on Folica.com for friend referrals that result in purchases. The referred friends receive a $10 credit as an incentive to make the first purchase from the e-retailer. To generate excitement around the program, Folica promotes the referral program via an email to its 850,000 email subscribers. The company also promotes the program on Facebook and has added a “send to a friend” link to the top of every product page on Folica.com. In the first 30 days, the referral program saw a 93% open rate on emails shared with friends and a 16% conversion rate.

Is it all about Facebook or are there other means of encouraging social referrals among customers?

Consumers are sharing more online every day – whether it’s updates, conversations, recommendations, photos, tweets, posts, shares, or +1s. Currently, consumers share four billion things on Facebook, 200 million things on Twitter, and one billion things on Google+ every day and Mark Zuckerberg predicts that every year, consumers will share twice as much as the year before.

To drive the highest participation in a social referral program, brands should utilize all of their available owned assets to promote the program, including corporate website, email lists and social networks – Facebook, Twitter and Google+. In addition, brands should enable a cross channel approach for their advocates to share with friends to drive the highest possible volume of shares, amplification and conversions. Across our over 200 customers, we have seen that even with the explosion of online and social sharing, email is an incredibly powerful sharing channel, which sees the greatest volume of social referral program sharing and the highest conversion rate.  Sharing via social channels (Twitter and Facebook) sees the highest amplification and number of clicks per share, but sees lower conversion rates. To launch an effective social referral program, marketers need to build a cross-channel approach to harness the power of traditional, as well as social sharing between customer advocates and their friends and social communities.

Many people use their Facebook to feed their Twitter etc. Should we be customizing the message by social media outlet?

Customizing messages by social channel is an important element of a social referral program, as they speak to different audiences. One best practice is to provide channel-specific default messaging that advocates can customize to increase sharing and the effectiveness of the messages. Following are best practices by channel.

  • Email

The email message should read like a story with a personal touch. It should tell the friend about the offer they will receive and what the advocate gets if the friend converts.

  • Facebook/Google+

The Facebook/Google+ message should sound like your advocates are speaking to their friends directly. It’s the advocate’s rationale on why they are personally sharing the offer with their close network of friends. Using an @Brand within the Facebook share message will also help with SEO initiatives.

  • Twitter

The Twitter message is more of a message to the world at large—people you don’t necessarily know. It should be less personalized, condensed, quick and to the point. The message can be no more than 140 characters in length, including the URL. It’s also beneficial to use an @TwitterHandle and the name of the brand within the post to increase SEO and social tracking value, as well as a hashtag (#) attributed to the social referral program.

We often hear that social media marketing isn’t measureable so we don’t know what the ROI is. What are your thoughts on the measurability of social media?

Social media and ROI have always been a hot topic, with marketers trying to understand the real value it’s driving (or not driving) for brands. Brands have made significant investments in building social marketing presences and amassing social followers, but still have yet to understand the real value behind these social marketing initiatives. As we move into the next phase of social media marketing, what’s top of mind for every marketer is how to drive measurable results from their social marketing investments. Tapping into the power of consumer-to-consumer (C2C) dialogues across channels enables brands to drive quantifiable results via social referral programs.

At Extole, we measure the ROI of social referral programs across participation, amplification, friend clicks, referral traffic, click-through rate (CTR), and conversion rate. The ability to track and measure across these dimensions and channels enables brands to optimize the program for ongoing success. Below are the metrics that should be tracked on every social referral program:

  • Number of Advocates: Program participation is measured by the number of customer advocates sharing the program. The number of advocates will vary based on the size of a brand’s existing customer base.
  • Shares per Advocate: Program amplification is measured by the number of times each advocate shares.
  • Number of Social Shares: Program reach is measured by the total number of social shares. Social shares can come in the form of email, sharing a personal URL (PURL), tweet, Facebook post, Google+ post, etc.
  • Number of Friend Clicks:  Friend clicks reflect the volume of new referral traffic driven by a social referral program.
  • Clicks per Share: CTR of social referral program is measured by number of friend clicks per social share, which vary based on the sharing channel.
  • Number of Conversions: Conversions are the number of new friend sales, opt-ins or redemptions resulting from the social referral program.
  • Friend Conversion Rate: The friend conversion rate reflects the number of sales per friend clicks and varies based on the sharing channel.

Is ROI something a small marketer needs to worry about?

All marketers should worry about ROI. If they aren’t measuring the effectiveness of social media initiatives, then how will they know they work? Marketers must set goals and expectations for their social media initiatives and understand what metrics will quantify success. Is it sales? Is it traffic to your website? Is it conversion rate? Brands both big and small can launch social initiatives that drive ROI.

For someone just starting out in social media marketing, what is the most important and / or first thing they should do?

Every marketer should be thinking about a strategy to harness the power of their social advocates and get their customers to market on their behalf. By gaining a better understanding of consumer behavior across channels, marketers can drive measurable social marketing results for brands in the areas of participation and amplification, friend clicks and referral traffic, CTR, conversion rate and even improved SERP. With C2C marketing via social referral programs, marketers can create cross-channel marketing initiatives that combine reach, amplification and conversion and effectively measure their social marketing efforts.

  • http://www.facebook.com/nick.sisco.10 Nick Sisco

    Referrals from business networking require documentation and tracking in order to measure and then evaluate networking effectiveness. Referral Metrics was created to serve this need. http://www.referralmetrics.com