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Hi there and thank you for listening to The Business Storyteller Podcast! I’m your host, Wilson and in this episode, we’re exploring how brands can grow through word-of-mouth marketing.
Imagine this situation with me: You’ve been eyeing to purchase a product for some time and there are two options that will influence your decision.
Option 1: You keep seeing ads of the product on social media over and over again.
Option 2: Someone you trust reviewed the product and rated it very highly.
Which of these two options would influence your decision to finally purchase the product? Most likely, you’ll go with option 2 and trust the review and rating by someone you trust. That is essentially word-of-mouth marketing or technically known as referral marketing.
Today, we’re seeking to understand what entails referral marketing and I’m delighted to be joined by an expert in this area. It’s my privilege to speak with Raul Galera who is the Partnerships and Business Development Lead at ReferralCandy. Referral Candy is an app that allows e-commerce brands to set up and run customer referral programs. Raul currently leads ReferralCandy’s partnership efforts, working alongside agencies, media, and tech companies.
Hi Raul, welcome to our podcast and thank you for joining us today. How are you doing there in Mexico?
Hi, thank you. My pleasure to be here and I’m doing great. I’ve been traveling around Mexico for a while. Great food, great weather, great people. Can’t ask for anything else.
Nice. Well, I really appreciate you taking time to be on this call with us today. I’ve fairly introduced you a bit but I’m sure listeners would love to know you better from you directly.
Would you like to share with us a little bit about your career journey and what led to your role at ReferralCandy?
Yeah, absolutely. So I joined the company in 2016. Before that, I was actually working for a startup company in Chile. I’m originally from Spain but after I graduated college, I moved to Chile. So pretty much the other side of the world. Started working for a startup there for a couple of years. We were mostly selling recruitment services to other startups and after a couple of years there doing mostly sales, which I personally love, I wanted to get involved into kind of the tech world. Mostly because I was selling our services to tech companies and tech startups. This is really cool. I want to learn more. I want to be involved in this in this world.
And so I actually came across ReferralCandy in AngelList in 2016. Instead of applying to a remote sales job that they had, I actually emailed the CEO directly, Dinesh and say, “Hey Dinesh, I really love what you guys are doing. I want to work with you guys. I’d love to see what options are available.” And we had an interview and the rest is pretty much history.
Wow! Six years with ReferralCandy now and I’m sure you’ve accomplished throughout that sure that period. Well, I’m excited to get our conversation going on how brands can grow through word-of-mouth marketing. Because I also believe as a marketer myself that this is an important strategy for every business and brand.
So, my first question for you is this. Based on your experience in referral marketing, why do you think brands and businesses should place an emphasis on referral marketing at the present time? And then later on, I’ll ask you about the longer term and what do you see for the future? But at the present time, why do you think it’s important for brands?
At the present time, I would say it’s because it’s a really good alternative to traditional customer acquisition methods, which is ads for example. Ads have gotten extremely expensive over the past few years and referral marketing is an alternative that not only it’s more cost-effective, but it’s also a channel that you can absolutely own.
We’re talking about an audience that is your customers and their friends. You can absolutely own it regardless of the tool that you’re using for the referral program, whether it’s ReferralCandy or something else, it doesn’t change the fact that you’re leveraging your own data and your own audience.
Those two main reasons, the fact that it’s mostly performance-based and it’s a million times more profitable than ads. And also the fact that you don’t have to depend on the third-party app to access or to get in touch with the audience that you want to. I think those are the two main reasons why brands should start definitely looking at it if they’re not thinking about it already.
I appreciated how you mentioned we are basically leveraging on your existing customers or clients who already trust your product and you’re allowing them to be the ones who refer more friends to your product.
So we talked a bit about the present but perhaps, let’s go further. Maybe 20 years or 10 years from now. What do you see the future of referral marketing and how do you envision that to look like?
That’s a really good question. I would say that one of the things that Covid has definitely accelerated, obviously not only just e-commerce penetration but also the fact that there’s a lot more competition for any e-commerce store. Before, e-commerce stores had 10 other competitors that they have to keep an eye out for. Now they have 20 or 30.
I feel like e-commerce or brands are starting to go more into their own niche. They’re going to realize that if you’re selling a product, you’re not just selling a product. You have to sell a product that’s specific or has some sort of specific component for the target niche that you’re going to work with. And so, by focusing on those niches of customers, we are also going to start creating communities around your customer base.
Those communities can be physical communities, and in terms of Facebook groups or Slack channels, or could be just literally creating a strong enough brand that people would tag you on social media or will be following your blog, or will be updated on what you’re up to. But it’s a matter of creating a deeper connection with your customer base that goes beyond just your products. I think that’s something that brands are definitely going to start.
I already see it and I think it’s definitely a trend that’s going to continue mostly because at the end of the day, it’s making sure that you’re always having your audience ready and available to hear from you. You’re kind of cutting the dependence on again, social media and especially ads, which is what brands have traditionally used to acquire new customers.
I joined ReferralCandy in 2016. That was my first encounter with the e-commerce world. Back then, you could see YouTube videos and courses about e-commerce that tell you, “Just put 50 dollars on Facebook and see what happens.: If you put 50 dollars on Facebook these days, I’ll tell you what happens, “Nothing.” The world has changed a lot in the past six years. We’re going down that route of getting more specific and making sure that you’re probably not covering such a large customer base but a more engaged, more loyal customer base.
That’s an interesting insight you mentioned because I remember back in 2016, I was also doing social media marketing for Piktochart, and like you said, 50 dollars for our ads and it’s getting somewhere. You get engagement, but now it’s so hard even for PPC ads and social media ads. So I like how you say that it is indeed relational.
I think that is going to be the future like even more brands I think are focusing now on community. And at the same time, using that community to leverage on referral marketing. Thanks for sharing that insight about the future and I’m excited to learn more from you.
In relation to this, let’s talk about ReferralCandy and how has ReferralCandy itself benefited from referral marketing or word-of-mouth marketing?
That’s a really good question. We do have an affiliate program on ReferralCandy and we work with affiliates that have some sort of presence on blog or YouTube, or whatever it is and they’re able to promote our app there. But it’s funny because the way that we do it for our brand is B2C. So in the sense that customers are referring their friends and these friends are making purchases that they are gonna buy for their own. It’s a product that they’re going to use I’ll say on a personal level. So not necessarily a B2B purchase.
But if we run a referral program in the same way, it will be stores referring each other, so it’s B2B. It’s actually quite different, the way that referral programs are ran on B2B and B2C. I would say that the incentives are different in the sense that when you’re running a B2C referral program, like let’s say that I just bought this t-shirt and I want to recommend it to you. I’ll tell you all about it and I’ll end up convincing you and you go and make a purchase for yourself and I’ll get something in exchange. I’ll probably get a discount on a future purchase, a future T-shirt that I might buy, or maybe I’ll get a free T-shirt or something like that. I’ll get that kind of reward myself.
But if again you’re in the market for a T-shirt, you might listen to my recommendation because we know each other and you trust my recommendation. B2B, that part is pretty similar in the sense that if you’re in the market for a new software for your company, you’re not spending your money but you still want to make sure that the money that you’re spending from your company is well spent. You’re probably going to ask for recommendations.
Now, whoever’s giving you a recommendation, their incentives are going to be slightly different. Because if somebody who’s a user of software that they’re recommending to you, they might make a recommendation or they might say whether they’re enjoying the software or not. But giving them a discount and a future subscription of that software might not really move the needle for them because they’re not paying for it. And so the incentives between a B2C and B2B referral program might look pretty similar from kind of the outside view, but they’re actually quite complex because of those dynamics of like I might benefit in myself personally from making recommendation or is it my company or is it something that’s going to affect me directly or not?
So I guess that’s kind of a long answer to say that we haven’t got a lot of referral marketing for ReferralCandy. Probably the closest thing that we have right now besides our affiliate program is our collaborations with agencies. There are a lot of e-commerce agencies and marketing agencies out there that have customers that could need a referral program software. So we work with them and they are able to obviously send those customers. But again, the dynamics there are also different because the main incentive of those agencies is to make sure that their clients are making money, which is our incentive as well. So again, it’s funny how all these dynamics kind of work.
Thanks for giving us an insight on that and I really appreciated the distinction that you mentioned on referral marketing for B2B and B2C is different. The dynamics are different. So, I’m also keen to learn more from you.
Now, I believe that every business leader and that’s most of the people who are listening to our podcast. They actually know the importance of referral marketing, but especially for aspiring leaders who are perhaps starting a new business, it might not be part of their business strategy yet. Maybe it’s due to their lack of resources or expertise in implementing these.
For brands and businesses who haven’t tried out referral marketing, what would be some practical steps that you have to help them get started?
I would say that referral marketing is something that is built on top of word-of-mouth, which is the organic side of it. If you have a good product, if you have a good purchase experience, good past purchase experience as well. In other words, if your customers are happy, they’re likely going to buy from you again and they’re also likely going to refer their friends. Mostly because we love to talk about things that we’ve done, things that we’ve purchased, and obviously, buying online. It’s part of our daily lifestyle.
So it’s definitely something that we talk about it and especially if you’re buying products that are visible, like the example that I mentioned earlier, T-shirt or something that you can order. New pair of sneakers. Your friends are probably going to ask about it. You’ll have the opportunity to sell that to your friends. So what I’m trying to say is that word-of-mouth happens organically. We’re constantly sharing the things that we’re doing or buying.
And so I will try to make sure that that’s already happening in your store. It’s hard to track because if you don’t have a referral system if you’re not giving referral links or coupon codes, it’s hard to track. But something that our customers have told us many times is that they started looking into referral program software options like ReferralCandy because the customer support team said, we have customers asking if we have some sort of referral structure. That’s a really good sign if your customers are asking for it because they are referring your product and they’re saying, well I might as well get something out of this, right? I would say that’s probably an early sign. If you’re looking for one, that’s the early time.
Now, in terms of getting started, I think just shoot for customer satisfaction. Run maybe a net promoter score survey. And if it’s over nine, you should definitely be launching a referral program. But beyond that, if you know that your customers are happy with your product, which is something you can tell by your reviews, by how often your customers are coming back.
There’s little downside to launching a referral program. The worst that can happen is that your customers are maybe not interested in the reward options, and then you can just change it for something different. So, I would just say that focus on customer satisfaction first, and then launching a referral program will be extremely easy. It’s also a lot easier if you’re a more mature brand that’s been around for a while than if you’re a startup that has maybe a smaller number of customers.
But those are kind of more minor details that might affect whether your referral program is going to be successful in the short term or in the long term. But in terms of referral programs being good for your business, those are the things that you should look for. It’s customer satisfaction and maybe look for those early signs of word-of-mouth that might be happening already in your store.
Yeah, that’s a great insight and I appreciated how you mentioned about the main thing is it comes down to customer satisfaction because these are your existing clients, your existing customers who already love you. And if they are talking about it then there’s a possibility for us to also reward them and giving them more incentive to talk more about it.
Thanks for giving us an insight, especially for new business leaders. I think sometimes it can be tricky to begin referral marketing. It can seem like it’s a very complicated thing but actually, it’s not that. You just need to focus on making sure that your customers are satisfied and they’re talking about you. There’s no doubt that referral marketing is perhaps one of the most effective marketing strategies I would say. But what do you think are some challenges to expect while doing this?
I would say that the main challenge at the end of the day is getting the attention and I think that might sound simple but it’s honestly probably one of the main blockers that we see when referral programs don’t work. It’s mostly because there’s not enough promotion around it. Getting the word out there is always difficult as consumers were bombarded with content marketing. And so it’s a matter of making sure that you have the right message at the right time and your customers are notified and reminded about the referral program because they might get an email once after they make a purchase but then forget about it.
So if they can get notified about the referral program with different touch points, whether it’s post-purchase or on your monthly newsletter, or on an Instagram post or story, anything along those lines. If they can get multiple notifications about it, that’s going to go a long way in terms of making sure that your referral program actually works. It really is just getting the word out there and sometimes it’s the hardest part.
Yeah, and just to kind of like go off a bit, how do you see ReferrralCandy being able to support businesses or business leaders in terms of managing these challenges that you just mentioned?
We try to automate pretty much everything, so we have whenever brands launch a referral program on ReferralCandy, we have a set of widgets and automated emails that we can just literally just turn on the platform. And then we take care of either notifying customers after their purchase or remind them once in a while, whatever cadence they want to set up for that. That’s totally automated inside of the platform.
So we built a system that kind of like knows when to notify customers and got to make sure that they’re staying top of mind. On top of that, if they can post stuff on their social media channels, it’s always appreciated. It’s definitely going to help. We try to automate as much as possible. ReferralCandy as a company, we have the mission of helping small and medium-sized businesses.
Even though we still work with really big companies as well, we have the same mentality of let’s try to make sure that we’re automating as many tasks as possible because we understand that even big companies can be understaffed. And so if there’s a manual work that we can remove from our customers, it’ll go a long way and especially if we can do it in a way that that we know it’s going to work because we’ve tested it on thousands of referral programs. So that’s kind of the mentality about it.
That sounds like a game-changer for a lot of businesses because it’s automated for them. It’s easy. For our listeners who are listening to this, be sure to check out ReferralCandy. We’re going to leave a link. This is already essentially word-of-mouth marketing, even from the podcast itself.
Well, I’d love to dig deeper and also tap into your expertise in referral marketing. So far, we’ve talked about the benefits. We talked about some steps to get started and also the challenges. If you could give three tips for doing referral marketing successfully, what would that be?
Okay, so I would say that, first of all, adjust your referral program rewards to your customer’s purchasing behavior. So if you’re selling a product that your customers can buy on a somewhat regular basis, or if you’re selling a subscription, even more, make sure that your rewards are adjusted accordingly. And so they can, for example, get either a free subscription or a discount on a future purchase. That way, you’re not only incentivizing them to refer their friends and acquire new customers but you’re also retaining those existing customers that you currently have because you’re giving them a discount to come back to your store.
Second one would be to invite past customers. It sounds fairly simple, but it really helps a lot. So when you launch a referral program on ReferralCandy, we can automatically invite customers to join the referral program after a purchase. But the reality is that by the time that you’re thinking about launching a referral program, you’re probably been in business for a while. So you probably have hundreds or thousands of customers that have bought from you before that would be happy to refer.
And so if you can notify those past customers, something as simple as, “Hey, we now have a referral program”, which by the way, you can also automate on ReferralCandy. It definitely goes a long way because again, the more customers you have on your referral program, the higher the number of referrals is going to happen and the more customers that you can acquire and then have them join the referral program as well. It’s kind of like a cycle that starts all over again. So we’ve talked about rewards. We’ve talked about inviting past customers.
And then, as I mentioned earlier, promotion. Promotion is absolutely key. I would say in a nutshell, there’s not enough promotion that you can do for a referral program. It’s also the message that your customers are probably going to be more open to receive than what you typically get after you buy from the store. Tap into me as a consumer, that you buy something and then all you get after that are coupon codes to go back and make another purchase.
You might think, well it would have been great to get that coupon code like a week ago and actually make the purchase, but now I’m not necessarily thinking about it. But that’s a different kind of type of message like, “Hey, how are you enjoying your new product, your new phone case, or new T-shirt, sneakers, or whatever it is? Have you told your friends about it? Do you know that your friends can get x amount off?”
A lot of times, people will refer just to do something nice for people they care about and at the same time, one of the reasons why I was focusing on customer satisfaction earlier is because if you have a product that your customers don’t like, trust me, there’s no referral incentive that you can give them to get them to refer you. Especially to a friend or family member.
Yeah, those are really great insights and I think steps that business owners can really look into to be able to do this successfully. Well, we’re in our final question now and I’m sure you’ve seen businesses and help brands to thrive in doing referral marketing successfully. What are some of your favorite examples that are nailing it at referral marketing?
There’s one example that I always bring up because I think they’ve really captured what a referral program should be about. There’s a brand called Baronfig. They’re based in New York City and they’ve been with us for a real long time. And if you go on their website, they have a call to action on the top navigation bar that says “Get $10”. And if you click there, you go to their referral program landing page.
What’s interesting about that referral program landing page is they have a section called ‘Note from the team’ and there, they explain why they are running a referral program. One of the things that they say, which I think it’s genius, is the fact that they say, “Instead of spending money on advertising, we’d rather give the money to you. Your help is tremendously appreciated. It helps us grow our small studio.”
I kind of have it memorized. That’s pretty much how it is, right? They are sharing with you the fact that they are a small company that every referral helps. Also, I particularly liked that part of instead of spending money on advertising, giving money to all these multi-billion dollar companies, we’d rather give the money to you. A customer that loves us and enjoys your product is referring us to friends. That’s one particular example that I like to bring up because they’ve been able to capture the essence of a referral program and what in my opinion should be about.
Yeah, I love the approach that you mentioned and I think it comes back, tying back to what you said earlier, that is customer satisfaction. Ultimately making customers feel that we care about you more than the advertisements that we’re going to put out there, and we’re going to give it back to you. And yeah, I can kind of feel that even as a consumer myself, I’d appreciate if a brand would do that to me.
I think that’s a really good example that our listeners should really check out. Well, thank you so much, Raul for coming here and sharing so many valuable lessons with us. I’ve certainly gained new learnings about growing brands through referral marketing. I’m sure our audience has also benefited from your sharing. I think you gave us some practical tips and takeaways that business leaders can right away consider and implement it if this is not yet part of their business strategy.
As a wrap-up to this episode, I’d love to ask you some fun questions to help our listeners learn about what inspires you. Are you ready? My first question for you is, what is your favorite movie?
Okay, so can I actually answer two? So it would be either ‘Pulp Fiction’ because I love Tarantino. And ‘Space Jam’.
My second question for you is this, what is a productivity app on your smartphone that you would highly recommend?
Probably the one I use the most is Google Calendar. I’m a very forgetful person, so I need constant reminders. My Google Calendar app on my iPhone, especially the little widget that you can put on the actual page with all the apps. That has saved my life way too many times. I know I’m not inventing the wheel here but it’s definitely the one that I used the most.
I also live on my calendar. Love it. It’s part of my daily life. And my last question for you is this, if you’re not doing what you’re doing right now at ReferralCandy, what do you envision yourself doing?
From when I was little, I’ve always wanted to kind of run my own business, but not necessarily like a digital business, but more like a physical one. I’ve always had this kind of dream of like owning a bar, a restaurant, or something. Kind of something social. For some reason, nobody in my family has ever run any kind of business like that. Yeah, that’s something that I hopefully one day will be able to do that.
Nice, and do you know in which location you would do it in any city around the world?
Not really. It’s funny like whenever I go to a restaurant, I’ll tell my girlfriend like, “You know what I would do if I had this restaurant, I would do this or I would offer this or like make sure that the customer always gets the drink as soon as they sit down.” Little things like that and for some reason, again, I don’t know why. But it’s definitely something I would like, but I haven’t really thought about in terms of what type of cuisine or where we’re located or anything like that.
Well, I wish you all the best and I hope you’ll be able to do that one day and pursue your passion in that area. Thanks for sharing some of the fun insights that we can learn to know you better and what inspires you. Before we conclude, I’m sure our listeners would also love to stay connected with you or reach you. If they’d like to do that, how can they do that, Raul?
Connect with me on LinkedIn and then also on referralcandy.com to learn more about us. And if they want to email me directly, my email is raulg, so that’s my name and the initial of my last name, @referralcandy.com
We’ll be leaving all of that in the show notes as well. If you’d like to stay in touch with Raul or know more about how ReferralCandy can help your business to set up and run customer referral programs, feel free to reach him. Once again, thank you Raul for coming on this episode of The Business Storyteller Podcast. That’s all for today’s episode and until the next one.
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