Use referral to programs drive retention AND growth - The Retention Newsie

Welcome to The Retention Newsie by The Email Marketers.

Every week we bring you the best case studies, strategies, and tips around keeping more customers, turning them into raving fans, and increasing revenue.

Up this week:

• 🧸 How Riff Raff Baby used word-of-mouth for success

• 🔑 8 steps to building a referral program

• 🛍 Gatorade’s new loyalty program, StockX’s customer-centric business model, & more!

Reading time: 4.5 minutes

Riff Raff Baby, a children’s sleep toy company, has had stunning results from their referral program.

Riff Raff Baby’s Founder and Chief of Sleepy Ops, Emma Kruger, recognized the importance of word-of-mouth within the close-knit motherhood community. As a mother herself, Kruger knew that moms often share experiences and recommendations, making them the perfect advocates for a product they love.

"I always knew from my research when launching that a referral program was going to be a major part of our marketing. With much of our target market being moms, and me being a mom myself, I knew that the best people to promote our product were other moms," explained Kruger.

Tapping into this powerful network proved to be a game-changer for Riff Raff Baby, generating an impressive 35% of their total sales through referrals.

Kruger understood that busy moms don't have time for complicated promotions. That's why Riff Raff Baby opted for a straightforward, clear referral program. Customers can easily share their referral code without the hassle of creating an account, making it simple for them to spread the word about their products.

One key to a successful referral program is making it easy for to participate.

Anyone can participate in their referral program, whether they have purchased already or not. After 5 referred friends purchase, they get gifted a free Riff Raff sleep toy.

This encourages participation and builds brand goodwill.

Their results are impressive:

1 in every 4 customers came through a referral, ten times the industry benchmark of 2.35%. Over 2,000 happy customers have made at least one successful referral, with the top referrer bringing in an astonishing 400 new customers alone.

The company has built a loyal community of parents who genuinely love their products. By creating sleep toys that solve real problems for families, Riff Raff Baby has earned the trust and advocacy of its customers.

Referral programs capitalize on retention, spreading the love from current loyal customers to prospects.

7 Steps to Referral Program Success

Referral marketing is set to be the fastest-growing customer acquisition channel in 2024. By incentivizing existing customers to refer friends and family, businesses can generate leads that are 2x more likely to convert than those from other marketing channels.

Follow these seven steps to turn loyal customers into vocal advocates.

Step 1: Define your Goals: Begin by setting clear, measurable objectives for your referral program. Are you aiming to increase sales, generate leads, or reward loyal customers?

Step 2: Design Your Program: Decide between a single-sided (reward only for the referrer) or double-sided (both parties rewarded) structure based on your goals and target audience.

Step 3: Choose Rewards Wisely: Strike a balance between motivating customers to refer others and protecting your bottom line. Popular rewards include gift cards, discounts, and free products or services. The best perks both incentivize referrals and make the original customer more likely to purchase again, enabling both retention and growth.

Step 4: Create a Killer Offer: The incentive for the referred friend is just as important as the referrer's reward. Make sure it's something valuable that they can use immediately, such as a discount or free trial.

Step 5: Build with the Right Tools: Use referral software to streamline the technical aspects of your program, allowing you to focus your energy on marketing elements like messaging and promotion.

Viral Loops, Referral Candy, and Referral Rock are a few excellent options. Viral Loops is one of our favorites, with great integrations and plans starting from $35/month.

Step 6: Promote, Promote, Promote: Spread the word about your referral program through various channels, including email, social media, paid ads, or website pop-ups. Clearly communicate the benefits and value for both referrers and referees to encourage participation.

Step 7: Track and Optimize: Regularly monitor key metrics such as referral counts, top referrers, and conversion rates to gauge the success of your program. Use these insights to continually fine-tune your referral program.

By following these eight steps, you can create a referral program that not only rewards your loyal customers but also attracts new ones.

• Abandoned cart emails have a 41.18% open rate.

• The differences between product and brand differentiation, and why only brand differentiation will last.

• Gatorade launched a new omnichannel loyalty program.

• Three rules to create customer loyalty.

• Tesla's referral program is not ending, just pausing, according to Elon Musk.

We help 8-& 9-figure e-commerce brands increase revenue and build strong customer relationships through retention marketing: Email, SMS, direct mail, subscriptions, memberships, loyalty programs, and more.