Refer-a-friend brings in better new customers than other acquisition channels. They spend more, are more valuable over their lifetime as customers, and refer other new customers three to five times more frequently than customers you get elsewhere. Advance Auto Parts knows this. That’s why the auto-parts retailer runs refer-a-friend on the Extole platform. But how do set up and optimize your program to make sure you’re getting the best customers possible?
Heath Bradbury, Advance Auto Parts’ Manager of Digital Marketing & Innovation, has learned a thing or two about that in the years he’s driven the brand’s program. Eight of them, in fact. And he shared them with a large audience at Shop.org Digital Summit in Philadelphia. Here’s what he revealed.
Key #1: Promote
The more people see the opportunity to refer friends, the more people will become advocates. And the more who become advocates, the more friends they’ll share with. And the more friends who’ll convert into new customers. The classic marketing funnel: it’s as simple as that. So make your program visible in as many places as you can to create as many everyday advocates as you can.
Key #2: Give your customer service team the right tools
Like a pit team in a racing crew, your customer service team provides critical support. Make sure they understand how the program works and give them the tools to keep your customers satisfied. The most common question they’re going to get is, “Where’s my reward?” So make it extra-easy to answer that and resolve any potential issues.
Key #3: Don’t ignore email
— Erin Calvo-Bacci (@erincalvobacci) October 7, 2015
Social gets all the headlines, but it’s email that’s usually the highest-volume source of referral conversions. So make sure your program lets people share quickly and easily by email. Things like having emails come directly from the advocate, as opposed to from the brand, make it more likely friends will open them.
Key #4: Leverage for customer & product insight
Referrals can tell you a lot about what value propositions resonate with your customers. Using Extole’s platform Advance Auto Parts can see exactly what people are saying to friends and family about the brand when they share referrals. That’s marketing gold — unfiltered sentiment that reveals what your customers really think about your brand and products, and how they describe them in their own words.
Key #5: Know your advocates
These are the people who like your brand enough to give you the ultimate compliment: recommending someone else buy your stuff. Just like you’ve got different kinds of customers, you’ve got different kind of advocates. Some refer more than others. Some have bigger networks. Some drive more new customers. Know who your most valuable advocates are and take special care of them with things like special rewards or surprise-and-delight gifts.
Key #6: Be thoughtful in structuring your program
Speaking of special rewards…what are you going to offer as a reward? To whom? How many rewards are you willing to give out? How flexible are you willing to be? Of course all of this may (and probably will) change over time as you optimize your program. But have a plan when you start.
Key #7: Start simple. Then optimize. Then automate.
OK, this one’s really like three bonus tips rolled into one. Referrals are a channel, and like other channels they’re going to end up with multiple campaigns. Starting simply, with one campaign, lets you see results start to come in while keeping confusing and customer service issues to a minimum. In the end, that’ll drive more sales. You can benchmark success and quickly identify where within your referral funnel you’re doing well and where you need work.
Once you test, tinker and optimize, you’ll want to automate as much as you can, from quality control to reward issuance. After all, it’s not like you don’t have 10,000 other things on your plate. Referrals will pay dividends, but you should probably pay attention to those other things, too…
Hope we see you next year at Shop.org!