How A Referral Strategy Can Really Boost Your Sales

Customer acquisition and retention for eCommerce brands
Word of mouth and referral marketing
Current eCommerce marketing trends
The current state of eCommerce, future trends

Raúl Galera is the Chief Advocate at ReferralCandy, an app that allows eCommerce brands to set up and run customer referral programs. ReferralCandy is the leading platform in terms of referral
marketing for eCommerce brands.

Founded over 10 years ago, ReferralCandy has helped over 30,000
brands leverage the power of word-of-mouth and turn their customer base into their marketing team. Referral marketing is a blend of organic content, community marketing, and influencer marketing.

Word-of-mouth is a powerful channel for both successful global names as well as new, niche brands. Referral marketing blends perfectly with brands that have a clear customer-centric approach, making it affordable for companies of any size to attract new customers while retaining existing ones.

if they’d like to try out ReferralCandy they can go to try.referralcandy.com/podcast — this will allow them to get $50 off after your 30-day free trial

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Jonathan Denwood: Welcome back folks to the WP-Tonic show, its episode 605 we’ve got a great guest. We’re going to be talking about how you can use referrals to increase your sales. Basically, we got Raúl Galera. I’m sure I butchered he’s a name, but I did warn him and he seems so reasonably okay with it. I’ve got my co-host, Steven with me as well. And Raúl would you like to do your elevation pitch, your 2o second, just to quickly introduce yourself to the listeners and viewers?

Raúl Galera: Absolutely. So, yeah, my name is Raúl I’m the chief advocate, here at referral candy. What we’ve been doing for a task 10 years is that we are helping e-commerce brands to in short turn their customer base into their sales team or their marketing team by, allowing them to set up and run customer referral programs. So yeah, that’s, that’s what we do. That’s what we have been doing for 10 years. It’s been quite a ride.

Jonathan Denwood: That’s great. And we’re really looking forward to the conversation because it’s not the area that we’ve covered at all, almost in the 600 episodes of the show. So, Steven, would you like to quickly introduce yourself to the new listeners and viewers.

Steven Sauder: My name is Steven Sauder I’m from zip fish.io we make WordPress fast by optimizing the code on-site and also on the servers.

Jonathan Denwood: And before we go into the main part, the interview, I just want to mention one of our great, sponsors that help keep the show going. And that’s Castos, Castos. If you’re into podcasting and I would highly recommend that you should look at podcasting if you’ve got the time, it’s a great way of promoting yourself and your business. if you’re looking to get into podcasting yourself or you’ve had clients ask Castos to give you the platform, basically it’s where you upload your audio files to it provides the RSS feed that enables you to share it with iTunes, Spotify, and all the leading podcasting platforms.

And it gives you analytical data and technical support plus much, much more than that. I was with a more established, provider, and then, I heard that Matt Matheus of the Matt report was becoming the director of sales and marketing and I thought if it’s good enough for Matt, I should look at it. And I decided to jump ship is about half the price of my previous provider. And, they were really helpful. Had over 600 shows to move over. They were really flawlessly. It’s a fantastic interface. They’re great to work with. As we were talking, they found out I was looking for a long-term major sponsor my previous one after three years decided to go elsewhere, which is fine. And they came on board and it’s just been great. So I suggest that you should look at them.

The other thing is we’ve got, do remember to join the WP tonic, group, Facebook group. You’ll find the links all in the show notes. It really does help. And we’re trying to build a real WordPress community there. So Raúl gives us the history of the company. Now, you said it started about 10 years ago. Why did it start and you know, what are some of it, what are some of its main offerings Raúl?

Raúl Galera: So the company started, kind of based on a conversation over lunch. So actually our two co-founders were, were talking to a friend, that had just created an online store a few months before. And this was an online store in and 2009, 2010. So, you know, totally different from what we understand now as an online store. And just to put it into context, but back then, social media or I guess Facebook in particular was kind of starting to take shape and become international and starting to work in a lot of countries, besides the US and so this was kind of like a new channel for this entrepreneur.

He knew that his customers were happy with the products that we’re buying. And he knew that he could leverage, the network of their customers to acquire referrals basically. And so that’s kind of how it started. They figured out there must be a way that we can leverage this, that we can incentivize customers to refer their friends. And that’s how referral candy got started. Pretty much from day one, we kind of partner with, some of the major e-commerce platforms. And so that, that has been a partnership that has allowed us to, grow, over the past decade. And so obviously right now, we’re in a very different position. The e-commerce world is in a different position than it was 10 years ago. But the main offering it’s, it’s still there. As our mission is to allow brands to turn their customer base into their sales team. And just by allowing them to set up and run referral programs very quickly and just have them running on autopilot. So I don’t have to worry that they can just focus on running their stores.

Jonathan Denwood: Great over to you Steven.

Steven Sauder: Yeah. So like to dive into a little bit just like how it works, right. Cause like referral systems like feel very like complex to me, and I’m sure like, you guys like make that far simpler and like how that runs and stuff. So I have an online store, there has to be some way of hooking that into the checkout, right. Or some way of tracking links. So let’s say I have a customer base, right. And I want to implement a referral system. Do I like to send them a link to go sign up for referral candy? And then they get a link from you guys? Or how does that like handoff work? How do I get people, you know, sharing links to their referral, then giving people whatever the reward is? Like it’s generally some sort of cash value or store credits or something like that.

Raúl Galera: So for the, for the rewards, so yeah, it’s all pretty much automated on, our end. So for the rewards we typically recommend going with either coupons or a cash reward. If you’re selling a product that can be easily resold, to the same customer, we typically recommend going with a coupon because you’re also incentivizing them to come back and buy from you again, after they have referred a friend, but kind of going into the specifics on how it works. So yeah, we integrate with the checkout, and that’s how we are able to identify who was the customer, and also like all their information about the purchase that might be, interesting for us to kind of like qualify the referral.

The way it works from the consumer perspective is that we give every single customer a unique referral link that they can share with their friends. So I can share that referral link on, on a group chat or on Facebook or, you know, whatever it is. When a friend clicks on the referral link, they’re taken to a landing page with the offer. So let’s say, you know, here’s the 20% off that your friend gave you and the coupon code. And then the friend it’s being redirected to the store so they can complete the purchase, apply the coupon code. And we’re able to track the whole referral process from the moment that they clicked on the referral link until the moment that they went through the checkout, and verify that the person that clicked on the link, it’s also the person that went through checkout. So that’s kind of how we track it.

Then that new customer, that friend also gets automatically invited to join the referral program. So there are a few ways that we can do this either with a popup or with an automated email. It all runs through referral candy, but they never see referral candy it’s called a kind of like white-label in a way. Everything seems like part of the branding from the company, they never see any sort of, you know, referral candy branding anywhere.

Steven Sauder: Cool. When somebody is implementing this, how long does it take to set up? Is this something that you have to dedicate, you know, 10 hours to a hundred hours to, like, if I have a Woo Commerce store and I want to like create this referral program and launch it?

Raúl Galera: No, time at all, man, we actually, so we have a plugin for, Woo Commerce. And so just the integration it pretty much happens automatically. Really after that, you have to obviously set up your, your rewards, and you have to, add some marketing assets for us to be able to apply them to, the emails and the pages that are related to the referral program. But typically, we just need a logo and a banner, and we literally do the rest. So the setup time, especially in Woo Commerce, I mean in less than 30 minutes, you can get it up and running.

Steven Sauder: So then as far as like accounts go, if, I am a user and I’ve referred my friend, my friend has made a purchase therefore, I have a reward. I know like a lot of, e-commerce stores have, like, log-in sort of things, right. Like a Woo Commerce, right. I have a customer portal that I can go and look at my order history and stuff like that. Is there a separate login then for me to go look at my rewards that I need to bounce over to. So I kind of have like these two different login systems one’s for the referral and one’s for my online store.

Steven Sauder: Yup. That’s exactly how it works. If you click on you, let’s put it this way. So when you get, the email that invites you to join the referral program, you also have access to not only your referral link, so you can have it, available anytime in case you forget, and you want to grab it to send it to a friend. There’s also a section there that’s called your rewards. And if you click there, it asks you to create an account basically to just enter a, create a password so we can create an account for you. And then there you’re able to see, how many times people have clicked on your referral link. How many of those have turned into purchases and also how many of those purchases have qualified as a referral? Cause that’s, that’s another thing that we, that we do.

We allow merchants to set up conditions, on what qualifies as a referral purchase. Most of our merchants, you know, will take pretty much any, any, any purchase, in terms of, you know, amounts, but some of our clients,, want to make sure that only purchases over certain amounts qualify as a successful referral. So that’s why we also need to have access to the checkout. So we’re able to say, okay, this purchase is over a hundred dollars, so, therefore, qualifies as a referral. And so, yeah, there’s usually, like a waiting period between, the moment that the purchase happens and until we verify it, and then we send out the rewards automatically. So yeah, they can kind of keep track of all the steps.

Steven Sauder: Cool. That’s really awesome. So one question I’ve always had about referral programs. If I send it back to you, Jonathan is, if I refer a friend and let’s say my wife also refers the same friend, and let’s say they clicked on my link, and then they clicked on my wife’s link, like, who gets the referral? How do you sort that out? Are there different options for like, how that works? How do you resolve that kind of, issue?

Raúl Galera: yeah, so it, it, it kind of depends on the platform. So we have some platforms in which the referral detection happens, based on the cookie. And so whatever cookie was, was identified first, that’s the one that will qualify. For other platforms, we, do the referral identification based on the coupon code. So, for some platforms, they advocate has a unique coupon code. And so whatever coupon code is applied to the checkout, that’s how we’re able to identify that the referral so that it depends, the answer is it depends on the platform that the merchants are using.

Steven Sauder: that makes sense. Cool. Back to you, Jonathan.

Jonathan Denwood: So what’s one of the main challenges that you find that your users have, you know, which referral candy really helps overcome?

Raúl Galera: Yeah. So one thing that I always, bring up when, when I talk to a merchant, is the fact that if you have a product that your customers like, and you have a recurring, you know, the flow of orders, on your online store, and you’re a somewhat established a business, you already have referrals happening in your store. So if your customers like your product, it’s very likely that it’s coming up in conversations with their friends. So the main challenge that I see a lot of merchants face that they don’t know how many purchases are they getting from referrals versus all their channels. They just don’t have that data because they don’t have the platform in place. And you know, and it it’s something that could be fixed. You don’t necessarily need referral candy to get a rough idea of how many customers are coming from referrals. You could just do a survey at the checkout, you know how do you hear about us? Something like that could give you a, an estimate. But that’s the first, the first challenge.

The second one is the fact that if you don’t have a referral system in place, there’s little, you can do to incentivize your customers to refer more. So if you run a net promoter score survey on your store and you ask your customers, will you be willing to refer? You’re probably going to get, I mean, again, if everything falls in place, if your customers are happy, that net promoter score is going to be pretty high. It will fall anywhere between 80, 90, 95%. But the reality is only a fraction of those that say that are willing to refer. It will end up doing it. And there’s nothing. I mean, there’s nothing wrong with it. It’s just really that, you know, there’s a lot of distractions that happen in our daily lives, and we just forget about things. and so if you have that little incentive, in which your customers know not only what they can get for themselves, but also what they can get to their friends, that’s a huge incentive that we realize is that customers, a lot of the times they refer because they want to provide something useful to their friends, not necessarily because they’re getting some sort of, reward in exchange.

Identifying, referrals that might be already happening on your store, tracking those, and then obviously, incentivizing customers. Those are the main things that our customers are probably either not aware of, or, or they’re lacking that before they come to us. And after they, set up referral candy, they can have a little bit more control and more visibility on what percentage of my purchases are coming from referrals. And how can I incentivize that and also about customer behavior too so.

Jonathan Denwood: That’s great. Well, we’re going to go for our break. When we come back, we’ll be delving more in the world of referrals with referral candy back in a few moments. Folks.

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Jonathan Denwood: we are coming back the first half is gone really quick. Before we go into the second part of the show, I want to tell you about a webinar that I’m doing with Uncle Spencer you know spencer from Friday’s show. And if you’re not listening to our table shows, you should do. It’s very irrelevant. Look at the world of WordPress and technology every week. It’s a blast. So I’m doing a webinar on the 9th of July. That’s the second Friday of July at 10:30 AM Pacific standard time. You can watch it on the WP tonic Facebook group page, or our YouTube channel, basically sign up and we’ll give you-, there should be a signup form, which you find in the support and show notes of this show. And we will just send you a quick email just before the show goes live. You can join us live, and then ask us any questions.

What the webinar’s going to be about. Well, it’s going to be about marketing automation around mostly membership websites as the key pillar, but fundamentally it’s about marketing optimization and how you can use a small group of plugins to build something that’s at one fifth, the cost, and more flexible and more powerful than click funnels. More and more your customers are going to be asking you about marketing automation and how you can set it up in WordPress. We’ve got a really easy solution, which you can utilize for all your clients. So it’s great value the webinar. So please join us on the 9th of July. So back into it, I listened to some of your previous interviews, and one area I would like because scratching my own niche, really well is, your own experience of trying to market referral candy to other partners. because I’ve got my own referral, offering on my own website and I’ll set it all up and I’ve been busy with other things and it’s been set up for over a year and I’ve got half a dozen referral people that have joined it, but I haven’t honestly, it’s just sitting there really.

have you got any insights, let’s start with what you feel is one of the major things that you need to know if you’re going to get the ball rolling, which you did in your own business, around building relationships and partners, is that, is that a good start to this conversation Raúl?

Raúl Galera: Yeah, I think so. I would say just kind of as a bottom line, what we’ve seen that, makes a referral program, well, it makes the, you know, the ball starts rolling is promotion. So make it accessible to whoever your audiences, make it accessible, whether it is by having a call to action on your website or including it in some sort of like post-purchase flow. If we’re talking about e-commerce stores, just make sure that customers are aware of it and kind of make it easy for them to sign up. In my case. So I personally, in terms of building partnerships at referral candy, there’s a couple of things, that I’ve built over the past few years. One of them it’s, it’s an affiliate program. We use referral candy for referral candy.

We have an affiliate program and, and we, we haven’t really, do a lot of promotion around it, besides the fact that we just, included some call to actions on our website, that of people to find the affiliate program, and kind of like, you know, sign up for it and start referring. So mostly because I come to re come to realize that there’s, a lot of people out there that do I feel like the marketing, you know, in terms of the kind of like pay based on performance, people that are really good at affiliate marketing and they just join affiliate programs and just, you know, kind of, that’s how they make money. So we just opened it to anybody. And so we didn’t really have to do a lot of promotion. A lot of people found it, and kind of the same way with, how we work with agencies. So, that’s probably like 80% of my job is to, to work with, our agencies and their merchants.

I did a lot of outreach I did a lot of, you know, email and LinkedIn, to get people, to connect with us. And I was successful at connecting with people of being able to present referral candy, but, I realized that the higher quality, agencies for us, I guess not necessarily higher quality, but those are converted faster with those that came inbound. Those that already had some sort of need from a client, and just wanted to learn about a referral solution. And so we just made it easier for them to find us. So we started putting content out there about how we work with agencies. We created a section on our website specifically for agencies, so they could learn more about how we work and everything. So, so it’s really all about making it visible and accessible and also easy for people to join and then promotion that, you know, stay in touch with those affiliates and kind of remind them, about the structure that’s in place.

Jonathan Denwood: before I turn it over to Steve and what I think, what you’re saying is like, with most things, if you just set it out and leave it, is this going to wither You basically, you have to water, the garden, you got to get the ball rolling. I’m using a lot of metaphors here, but you basically, you got to focus on it. It just isn’t going to happen on its own.

Raúl Galera: Yeah. I mean, there’s a lot of things that you can automate. But at the end of the day, what’s really important is to make sure that you have some sort of system to touch base with people that need to be aware of this. So it doesn’t have to happen, manually it’s for a lot of things. It’s probably something you can set up, automatically whether it’s an email drip campaign or you know, some sort of like, you know, touch, touching base type of, system. But that’s the main part of it. So just to make sure that whoever’s our audience it’s aware of it, I would say that’s the bottom line.

Jonathan Denwood: Over to you, Steven.

Steven Sauder: should everybody have a referral program? Like, is this something that just like help works in every industry or is there like some industries that like referrals are definitely more important than others?

Raúl Galera: So, oops. So I would say that, so I mean, we haven’t really seen, an industry, so, okay. Just for context, we mostly work with B2C. So, B2B, we’re not super familiar and we haven’t really had enough, customers on the B2B world to be able to draw some conclusions from that. But in terms of B2C, we haven’t really found that industry, in which it didn’t work. and we’ve worked with, companies that sell, you know, from, food supplements to companies that sell, furniture or mattresses, which have a totally different price point and product and even customer behavior.

I would say if I had to pick one vertical, that works really well. It’s not necessarily in terms of the industry but in terms of customer behavior. So if you’re selling a product that your customers can buy on a regular basis. So if I mean, if you’re in subscriptions, referral program makes a lot of sense because you have a really engaged audience because they’re getting your product automatically every month or every week or whatever it is. So you’re staying top of mind. And then they can really see the benefit of getting that discount or getting that reward because they’re going to get it applied to their next subscription. So I would say, the ones that can benefit the most are our subscriptions. And then those that have recurring customers, or intend to have recurring customers, that works really well. But yeah, I mean I don’t really know, in which B2C industry in wouldn’t work, we, there might be levels of success, but really, yeah.

Steven Sauder: That’s a really interesting point that, like, I never thought about that, like B2C works far better because like, you’re looking for that social interaction and engagement, right. That human-to-human connection. I’m like, oh, I have a friend that wants something or I can post something on my Facebook. And once you get to that B2B kind of market, that sort of the human connection is like a little bit more difficult. And every business is trying to figure how to do that. But like, if it’s just a person recommending something to their friends, that’s a very casual sort of introduction. Like, hey, you know, you can save five bucks and I’ll say it five bucks or whatever. That’s cool.

when I’m thinking about what to give, right, like a coupon or amount of money, like, how does someone start thinking through like how much money or how much of a coupon, to kind of put out there for their customers, like what’s, incentive enough to get somebody to do something and what is profitable enough for me not to lose money every time somebody refers, or maybe, maybe it’s good to lose money to get the referral, to keep people around, like, how do you start calculating those numbers? Or what do you start thinking through?

Raúl Galera: Yeah. So, I mean, obviously the first, the first thing you want to look at, is your own financial system, make sure, you know, see what you can afford and also what you’re spending on other channels, to be honest because the referral marketing can be very cost-effective in the sense that you’re only paying for what you’re getting. And if you’re running ads for something that can get potentially really expensive to acquire that first customer. So, yeah, kind of like keeping them balance of, what you’re willing to get from it, and also what you can afford in terms of, acquiring that the new customer.

Also, look at what other promotions you might be having on your online store. So if you have a 10% after you sign up for a newsletter, or, you know, anything along those lines, maybe increase a little bit more, so you make it more, more attractive. we’ve had customers that- I mean, merchants, that we’re running the same promotion for referrals and also for a newsletter sign up and they didn’t really see a difference because it was a lot easier to get a 10% discount by signing up to a newsletter than referring a friend.

So that’s one thing. And then, kind of like some other best practices that we typically recommend. So you did mention one, which is the, I get five, you get five, so make it easy for customers to pitch. if you make it complicated in the sense that, okay, so you get a 10%, but only if you make a purchase over this amount and it has to be one of these three products, then it gets, it gets a little complicated, or if you have to refer multiple friends to acquire that reward, that can also get a little frustrating because you’re doing your job. You’re referring people, but you’re not seeing that reward kind of immediately. And so make it easy to understand, you know, the get five, get five.

If you want to, make it like, kind of like dig deeper into the psychology of the rewards, something that I’ve mentioned earlier, think about why your customers are referring and in most of these cases is going to be because they’re just showcasing the product to somebody that they, trust with somebody that they love. And so they’re probably going to make that recommendation anyway. And so if you want to incentivize the friend to make that first purchase or the customer, that’s making the referral. We’ve also seen that that works really well. We actually have a lot of merchants that offer a bigger reward to the friend, so they can introduce the brand to that new customer, rather than, you know, going forward kind of like the affiliate or the commission, type of incentive.

Again, just things to keep in mind, I guess it really depends from one company to another based on their behavior. But, those are kind of like the things that I would as a baseline on how to build your referral program on top,

Jonathan Denwood: we need to wrap it up and go for bonus content, Steven. So we’re going to wrap up the podcast part of the show. So Raúl, what’s the best way for people to find out more about you and referral candy?

Steven Sauder: Yeah. So just referral candy.com, or if they have any questions they can just email me directly. That’s R AU L g@referralcandy.com. Be happy to take questions there,

Jonathan Denwood: Make sure that the details are in the show notes, Steven, what’s the best way for people to find out more about you and your business? Steven Sauder: Head over to, Zip fish.IO run a speed test, see how much faster we can make your website.

Jonathan Denwood: Yes. And Steven and his crew really did help. The WP tonic website becomes more of a speed machine. It’s a rather large website. It was getting a little bit around the weight around the waist was let’s put it, was building up a bit and they needed to be put on a diet, and Steve and his crew helped out with that. So if you’re looking to make your WordPress website a bit more of a speed machine, go over to them. So we are going to bonus content now, folks, which you can watch on the WP, Tonic YouTube channel, please go over there and subscribe. It really does help the show. We normally always have bonus content, the whole of the interview plus the bonus content. Plus there’s a lot of other, lessons things around WordPress business in general. So do go over and you’ll find the link to get to the YouTube channel in the show notes. We will be back next week with another great interview we’ll see you soon folks bye.

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