Referrals have been a natural part of human interaction for many years. Whether it’s a food you tried or a skin care product you just discovered, you can’t deny that you often trust the recommendations of your friends, family, and colleagues more than any advertisement or marketing campaign.
This highlights that strategies such as word-of-mouth and referral marketing are a bigger deal than most businesses believe and chances are their customers are talking about them right now.
Research suggests that in the US, about 2.4 billion brand-related conversations take place every day and 69% of customers are willing to recommend a brand to other people after a positive experience.
There is nothing more satisfying for brands than when existing customers rave about them in front of their friends. And setting the right referral marketing strategy can help build and nurture long-term relations and acquire loyal clients.
Luckily, some tools like ReferralCandy can make this process a lot easier by helping customize the referral process.
In this exclusive interview for Spotlight, Olivier Adam, a chief growth officer at ReferralCandy, discusses the difference between word-of-mouth marketing and referral marketing and shares effective ways businesses can get high-quality referrals.
Who Is Olivier Adam
Olivier Adam is a senior entrepreneurial leader having 15+ years of experience in sales and marketing leadership. Throughout his career, he has built and led international sales, marketing and operations teams in multiple markets. Currently, he is the Chief Growth Officer at ReferralCandy where he helps oversee the company expansion.
Spotlight: What is the difference between traditional word-of-mouth marketing and referral marketing and which one is a more effective strategy that businesses can leverage to increase sales and ROI?
Olivier Adam: Traditional word-of-mouth marketing refers to the organic, unpaid, and unorganized spread of information about a product or service from one person to another through personal recommendations or conversations.
Referral marketing is a form of word-of-mouth marketing that is structured and encourages existing customers (called advocates) to refer new customers to a business through a referral program. This can include offering rewards to the advocates and discounts to the new customers.
Traditional word-of-mouth will happen naturally, and the only real way to increase it is to provide such a unique offering (product, service, customer experience) to your clients so that they will become advocates without being asked to. Referral marketing is thus much more effective at increasing sales because it is a more targeted and controlled approach. With referral marketing, businesses have the ability to track and measure the success of their referral program, which can help them optimize their efforts and get a better return on investment (ROI).
How can brands build a referral marketing strategy and what are some of the most effective ways to get high-quality referrals?
To build a referral marketing strategy, I think it’s important for businesses to follow these steps:
- Identify your target audience: Determine who your ideal customer is and focus your referral efforts on reaching this audience.
- Set referral goals: Clearly define what you want to achieve through your referral program and how you will measure success.
- Offer incentives: Provide incentives for advocates to refer their friends and family to your business. These could be discounts, free products or services, or other rewards.
- Make it easy to refer: Provide unique referral codes for advocates to share. ReferralCandy automatically does this!
- Thank and reward advocates: Make sure to provide the promised incentives to your advocates quickly, something else ReferralCandy can do automatically.
- Track and analyze: Track the performance of your referral program and analyze the data to identify what is working and what could be improved.
Other than providing excellent customer service and offering a great product or service, one of the most important elements to get high-quality referrals is to make it easy for advocates to refer by giving them easy access to their referral link with the ability to share it through email and social networks.
The global referral marketing software market size is forecasted to reach $713.3 million by 2027. What drives this growth, and why should organizations rely on referral marketing tools?
The global referral marketing software market is forecasted to grow significantly in the coming years due to several factors:
a) The increasing popularity and effectiveness of referral marketing as a way for businesses to drive growth and increase sales.
b) The continuously growing costs of other acquisition channels, primarily ads, squeeze businesses’ marketing budgets which encourages them to look at new acquisition channels.
c) The leads coming from referral marketing are much higher than other sources.
d) Referral marketing gives a much more authentic feeling to your prospective customers than other acquisition channels.
ReferralCandy is one of the key players in the market that provides customized solutions. How does it work and how else does it stand out from similar tools?
ReferralCandy is a referral marketing software that helps businesses increase sales and drive growth through referral programs. It works by providing businesses with a customizable referral platform that allows them to easily create, manage, and track referral programs. Businesses can tailor their referral programs to fit their specific needs and goals, including setting custom referral rules, rewards, and incentives, and customizing the referral process and user experience.
We also place a great deal of importance on offering robust analytics and reporting capabilities, providing businesses with detailed insights and data on the performance of their referral programs. This allows businesses to track and measure the success of their referral efforts and optimize their performance.
In addition to its customization and analytics capabilities, ReferralCandy stands out from similar tools through its excellent customer support and wide range of integrations with other marketing tools and platforms. These features make it easy for businesses to use ReferralCandy as part of their overall marketing strategy and get the most out of their referral programs.
You’ve partnered with some top-notch platforms such as Mailchimp, Klaviyo and Shopify. What value do these bring to your users and how do they help in your company's growth?
We get a lot of feedback from our users and some of these include suggestions on our existing and potential integrations. These partnerships provide convenience and ease of use for our merchants. They allow information to flow seamlessly and automatically between the platforms.
For example, our Shopify and Klaviyo integrations work well together: An order is generated on Shopify, we receive the order details, and send the information to Klaviyo to invite that customer to become an advocate. When someone they refer makes a transaction on Shopify, we receive the information again and provide the tracking through our dashboard to the merchant. So the dozens of integrations we have help our merchants to more efficiently manage their referral programs and get the most out of their referral efforts by automating the whole process.
In addition to providing convenience and ease of use for our users, our partnerships with these best-of-breed platforms can also contribute to the growth of both companies. By partnering with well-respected and widely used platforms, we are able to reach a larger audience and showcase the value of our product to a wider range of potential users. This can help us to drive growth and increase our customer base and eventually push out more valuable features.
Based on your experience, when is the best time for businesses to get started with referral marketing programs?
Based on my experience, the best time for businesses to get started with a referral marketing program is once they have initial commercial traction. It can vary from business to business, but a good rule of thumb would be for businesses to launch once they have at least 100 orders a month. The reason for this is that a referral marketing program relies on your existing clients, as such, running a program only really makes sense when you have a few clients you can leverage to help you drive additional sales.
That being said, it is important for businesses to take the time to properly plan and set up their referral program. This includes identifying their target audience, setting referral goals, and deciding on the most appropriate incentives and rewards. By taking the time to carefully plan their referral program, businesses can maximize the success of their efforts and see the best return on investment.
With the digital space teeming with influencers, how should businesses qualify and leverage influencers to generate referral sales?
To qualify and leverage influencers to generate referral sales, businesses should first identify the goals of their influencer marketing campaign and determine which influencers align with those goals. It is important to choose influencers who have a genuine connection to and understanding of the products or services, as well as a large and engaged following.
Businesses should also consider the type of content that the influencer creates and how it aligns with the business' brand and messaging. It is absolutely pivotal to work with influencers who create high-quality, authentic content that resonates with their audience.
Once the appropriate influencers have been identified, businesses should establish clear expectations and guidelines for their collaboration, including the terms of their partnership and the types of content that will be created. By following these steps and carefully qualifying, and leveraging influencers, businesses can effectively generate referral sales and drive growth through influencer marketing.
The challenge with this is that finding quality influencers for your business is extremely time-consuming and can be very expensive as many influencers ask to be paid upfront. This is one of the reasons why we launched InfluencerCandy last year to help address these problems.
ReferralCandy also launched InfluencerCandy. What is it and what value does it bring to small businesses?
InfluencerCandy is an influencer marketing platform that helps businesses connect with and collaborate with influencers for the purpose of promoting their products or services. We decided to build InfluencerCandy as we noticed that the influencer field is extremely challenging:
- There are thousands of influencers and the quality varies significantly
- It is currently a very tedious and manual process to find, reach out to and vet influencers individually
- It is very hard to track the performance of individual influencers, they might create nice quality content but it might not engage or drive any sales
As such, we decided to build InfluencerCandy by leveraging our 10+ years of experience in working with eCommerce merchants and helping them grow their businesses.
InfluencerCandy can automate the search for relevant influencers, covering what would take weeks to do manually. It will reach out to selected influencers and set up a revenue structure that is valuable for both the business and the influencer. Finally, it will track all sales generated by the influencer and calculate the appropriate rewards due.
Thank you for your time, Olivier Adam. Best of luck to you and ReferralCandy!
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