SquareTrade incentivizes social shares, deploys direct mail for sweeps

Given the Justin Bieber-level hysteria that typically accompanies the debut of a new Apple product, SquareTrade, a warranty provider for consumer electronics products, saw a marketing opportunity in the October launch of Apple’s iPhone 4S.

“One of the products SquareTrade sells is an extended warranty on iPhones, so we wanted to come up with a way of getting the attention of our customers that SquareTrade is doing something big,” says Vince Tseng, VP of marketing at SquareTrade.

A month before the iPhone’s unveiling, SquareTrade upgraded its customer referral program, which compensates consumers with $10 for each friend they refer who purchase a warranty from SquareTrade, by rewarding consumers with $100 for every five referrals that convert. Consumers referred by friends receive a $5 discount on any resulting warranty purchase.

“IPhones are inherently very social devices. We wanted to make sure we were able to give every possible incentive to give brand advocates a reason to talk to other people they know with iPhones,” says Tseng.

Working with social marketing firm Extole, the company seeded the campaign with a direct-mail component targeted to previous customers who were not members of the referral program. More specifically, SquareTrade sent fliers to consumers who had purchased iPhone warranties or had purchased multiple warranties calling them to join the program, says Tseng.

“We believe that social media programs can be amplified by using media that is not just social media but leveraging face-to-face interactions as well,” says Tseng. He adds, “The situations where you don’t have something concrete to provide the user become a lost opportunity. Few people are going to remember a name when told, but if they’re given something to go check out, you have a higher chance of engaging the consumer.” The initiative led to 10,000 sign-ups for the referral program.

Having reinforced its referral program, SquareTrade added a Facebook sweepstakes that gave away 50 Apple iPad 2 tablets over the course of five weeks. Consumers who entered the sweepstakes were automatically enrolled in SquareTrade’s referral program and asked to refer friends via email, Facebook, Twitter, Blogger or posting an embedded code to their personal websites. If a winning consumer had entered the giveaway via a referral, the referring friend also received an iPad 2.

“A giveaway that doesn’t incentivize people to share makes it much less effective,” says Tseng.

The campaign has resulted in more than 20,000 opt-ins for the referral program and more than 1,000 products sold at the $100 price point, says Tseng, who expects the campaign’s 100,000 social media shares to further build results.

“We anticipate dividends of the program to continue rolling in beyond the initial push,” he says. “People who haven’t bought yet now know about SquareTrade.”

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