New York-based hair care e-commerce brand Folica.com recently rolled out a customer referral program, with a $10 incentive to both the new customer and the referrer. More than 28,000 customers have participated in the program and conversion rates on referrals range as high as 25%. Jessica Bohm, Folica.com director of marketing, explains why.
Q: Tell us about Folica’s history of integrating conversations with existing customers with lead generation activities.
A: We have over 70,000 customer reviews and some of our flatirons have over 5,500 reviews each, so people are talking. We noticed in reviews that customers were speaking about referrals, and we wanted to reward customers for referring friends. Referral programs seem like an obvious choice for companies willing to give out discounts. [Customers] can share referrals through email, Facebook, and Twitter.
Q: You already had a successful affiliate sales model. What does the referral program add?
A: [Folica’s] affiliate program is catered to established businesses. The referral program is more customer-centric.
Q: What types of customers did you aim to reach through the referral program?
A: We were hoping to dive deeper into our current customer segments. We assumed that the refer-a-friend program would reach customers that look like our current customer base. If we tapped into a new customer base, we would be pleasantly surprised.
Q: How is the referral program promoted?
A: We promote the program in both the header and footer of our site, as well as through inline popup displays. We also promote it after checkout, and as a secondary message in our customer emails.
Q: How is it performing?
A: We have captured over 28,000 advocates who have shared Folica with their friends on average three times, and we have maintained an average conversion rate of 9%. That reaches as high as 25% in peak seasons.
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Q: What technology platform did you choose for the referral program, and why?
A: We chose Extole, which was easy to implement. At the time we were heading into the 2011 holiday and wanted time to work on the program before the holiday hit.
Q: How have you adjusted the referral program since the launch?
A: We launched with a microsite approach but have changed to an inline version, which looks more integrated with our site. The initial soft launch only promoted it in the top navigation and a dedicated email, but now every customer sees it at checkout. When we launched we didn’t have the resources to implement it at checkout.
Q: Which social channels have been valuable for lead generation?
A: YouTube is the one we focus most on. We partner with a few hundred bloggers and vloggers with giveaways and review products. Video reviews drive traffic to our site, and we asked for
permission to post some reviews directly on our site. An engaging video review helps conversion rates.
Q: Is there a limit on the number of referral offers a customer can send out?
A: We do have a limit for fraud protection, but if a customer exceeds that limit, we would honor the referrals.
Q: What are your plans for the referral program?
A: Our goal is to increase the program 5 to 10% month-over-month.
Q: How do the leads generated through the referral program differ from other channels?
A: Refer-a-friend incentivizes our best customers to share with their friends. SEO puts us where we need to be when people are looking for us. We want to be everywhere when someone thinks about hair, and we need to participate in all channels to do that.