Another Friday Feedback has come and gone.
On May 25th, 2018 our own Andrew Maff sat down with Raul Galera , He is the creator of Referral Candy to talk about how referral traffic works, Also to know a little bit more of Candy Bar and how this is it's a tool that allows physical retailers and not really eCommerce, to run loyalty programs.
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READ UP ON THE BIRTH OF REFERRAL CANDY
Andrew Maff: Raul, how you doing?
Raul Galera: Good. Good. How you doing man?
Andrew Maff: You hearing me okay?
Raul Galera: Loud and clear.
Andrew Maff: You're breaking up a little bit, I'm gonna move. See if I can get a better Wifi signal. Can you hear me okay?
Raul Galera: Yep, loud and clear.
Andrew Maff: There we go. Beautiful. How are you?
Raul Galera: Good man, kinda wrapping up for the day here. It's 9:00 PM here in Spain. So, we're heading towards the weekend.
Andrew Maff: Nice. Let me make sure. So, let's start into this. So, Referral Candy, how did you come up with the idea? how did you get started? Let's get the background of Referral Candy and Candy Bar now as well.
Raul Galera: Okay, cool. So, yes. So, Referral Candy is something that started in Singapore about eight years ago and it was something that was created with the idea of allowing eCommerce stores to basically run customer referral programs and use their customers as a way of turning them into a sales force, pretty much or the marketing team. They will go on and tell their friends about a store they just purchased from. It was a way of leveraging word of mouth. [inaudible 00:05:09] I mean it's more eligible for pretty much eCommerce platforms.
Raul Galera: And Candy Bar is something that we came up with about a year ago, when we launched it. And it's a tool that allows physical retailers and not really eCommerce, to run loyalty programs. So, basically the digital version of their traditional punch cards that we've seen around for many years. This is basically a way of putting those punch cards into your mobile phone.
Andrew Maff: Okay. So, on the eCommerce side, I'm sure you guys have some crazy statistics on the benefits of it, conversion
rates, things like that. What is the average that you see, coming from a shop - let's say, doesn't have anything implemented at all - and then goes on to using Referral Candy.
Raul Galera: So, it really depends on the stage of the company. So, we get, kinda like going on the other side of the question. Like we get a lot of retailers that are starting up and they want to run a referral program from the beginning, that might not be the best strategy for them to follow because they really haven't built that customer base that they're going to leverage using a referral program. And so, on the other side if you're running an eCommerce side and you have a recurring number of orders and recurring numbers of customers that keeps coming back, and you kinda have growing or stable kinda situation, you already have word of mouth. You already have customers coming in because they've been recommended by a friend.
Raul Galera: The only difference is, if you don't have a referral program, there is nothing you can do to basically go out there and tell people, “here's what you can get if refer your friends and here is what your friend can get if you wanna purchase here.” So, I mean, we've seen crazy stats. I mean, we've seen customers who've made a third of their revenue comes from the referral program alone, which is huge considering that referral marketing is one of the cheapest marketing options available out there.
Raul Galera: I mean, if you compare it to cost of running Facebook ads, or Google AdWords, you're basically paying for performance. So, you are given commissions, you are given discounts to your existing customers and the future customers. But at the end of the day, that's a lot cheaper than just driving traffic to your page. So, it makes a lot of sense but the store has to be at a specific stage to be able to make it successful.
Andrew Maff: Yeah. Okay. So, a while back I was working with, I was coming from in-house at an eCommerce place and referrals worked pretty well for us for the most part. But we had some issues just because it wasn't the world's sexist product for the most part. So, getting someone to share it was often difficult. Now obvious it's a less choice and I work with a ton of others and we see the potential for those programs and how they can work. Do you see that I really depend on the social appeal of the product for a referral program to work the best?
Raul Galera: Yes. So, Yeah, I mean the product obviously, if it's an attractive product ... I mean we've seen all these kick-start campaigns that go crazy, that go viral online just because it's a unique product, that makes it different to go viral. So, in that sense if you wanna have that social part, yeah, it kinda helps to have a unique product. But, we've seen successful referral programs from pretty much any industry, so we've had wonderful programs. One of the most successful referral programs we've seen at Referral Candy was through this company that was making flashcards for bar students, for people who were going to study for the bar exam.
Raul Galera: And, it's not like its super [inaudible 00:09:28] it's something I can share with my friends without knowing if any of my friends are studying for it and I don't know how many of them would benefit from the discount. But, it worked very well for the student community. So, you online if you search for referral links for this company you will find tons of comments on forums and specialized websites that they were promoting this referral program because it was based on that specific community. And that's also something that I've seen a lot. I've talked to some of our most successful retailers on referral candy and they all have something in common even though they come from different industries; that they have a very active Facebook group, like a very active community.
Raul Galera: And that helps a lot because their customers are not only working like their sales team. So, if someone is thinking about buying a product they will join that group and ask questions. So, they're asking questions and these customers are answering those questions in a sense that they're being part of the sales team but also the customers for team, they'll throw their referral links there.
Raul Galera: It creates a community around that and those people gonna turn into advocates for the brand later on. So, the product does play a part obviously, if you can play well with the rewards. So, If you know what to reward your customers and their friends and you know how to market it well within your community of customers, it can work as well as if you were operating the product.
Andrew Maff: That's was actually gonna be my next question. In terms of rewards, what do you see works the best? Is it always just a standard discount or is it buy one get one free? Or is it money back? What do you guys see as the best practices?
Raul Galera: It depends on the ... What I always recommend is to adjust your rewards to your customer's purchasing activity or purchasing behavior. So, for example, we have lot of subscription [inaudible 00:11:45] or non-native english speakers, subscription boxes. We have a lot of those customers and they ... So, what they do is they offer discounts to both their existing customers and a friend because for benefit's sake; to retain existing customers because they get a discount on their next monthly bill or next monthly purchase. So, for them, maybe giving cash to their existing customers would be nice, Obviously no one is gonna say no to some cash, obviously.
Raul Galera: But giving that discount also helps them to retain the customer that they already have and obviously at the same time they're acquiring new customers. So we've seen also ... We've had many online mattresses companies running their referral programs on Referral Candy and obviously they can give existing customers a discount on their next purchase because who knows when they gonna buy another mattress again.
Raul Galera: So what they did was to give cash to those customers. So, some other times we've seen ... Also I feel like another good answer for this question would be to not focus too much on the reward that you were giving to your affiliate but more on what you can give to the friend.
Raul Galera: So we've seen that, I mean at the end of the day, when was the last time that someone recommended a restaurant to you, or a hotel, or a book? People just recommend just because they want to do something nice for other people. And no one is going to recommend ... None of your friend and family is gonna recommend you something that you're not gonna like or you're not gonna enjoy just because they are getting 10 dollars via PayPal.
Raul Galera: So, I also recommend to always think about what the friend is receiving. So, we've seen referral programs were giving 70% off to the friend And then they would probably give them 10 dollars to the advocate. But a lot of these people, and that referral program works really well, those people would just recommend them because they're doing something extremely nice for their friends like, “here I'm giving you a 70% off discount.” So, think about the social status more than the bribe or what you're giving to the affiliate rather than giving to your customer.
Andrew Maff: Okay. So, in terms of shopping cart platforms a lot of new stuff has happened lately. I don't know if you saw Magento got bought by Adobe, BigCommerce got a huge race I think it was like 2 weeks ago they got a couple of billions or something like that. Which do you have a preference in platform that you guys work with? Or do you just say you love them all so you don't upset anyone?
Raul Galera: We love them all. No, actually, we do have, I mean Referral Candy works with pretty much any platform even if you have your own custom solution setup, you can get and then have it implemented. So, we are available for all of them. Obviously, if you ask any app, Any eCommerce app out there, they'll tell you probably Shopify is one of the biggest ones right now in terms of the number of customers. So, I mean but that doesn't mean that we have a preference for one or another we've had customers from pretty much every single eCommerce platform available right now and in a lot of custom solutions as well.
Raul Galera: We're seeing an increase in that as well. Probably at some point when brands grow they decide to go custom, that's their choice, but we've seen also an increase on the on that side as well.
Andrew Maff: Okay. So, you guys have been around 2016, right? 2016, I think. I'm just guessing.
Raul Galera: Referral Candy started in 2010, 2011.
Andrew Maff: Oh, really? I thought it was 2016 for some reason. Okay. So, anything? Any new features? Anything fun coming soon that you want to spill the beans on?
Raul Galera: Yeah. Well, we are, we actually decided to start working not only with eCommerce but also brick and mortar store because we actually realized that we have a lot of customers that have their own physical location as well. So, we are bringing referrals to the real world and something that's in our pipeline it's too basically create an army-channel solution where you can run referral programs whether you have a physical store or an eCommerce store and have everything combined and you don't have to switch platforms. That's kinda like our long-term type of vision, to help those retailers that are also working in the real world.
Andrew Maff: So, you call Candy Bar kinda like of a digital punch card, correct? Is that same concept, does it go from brick and mortar to also online for the same seller? If I were to go to a store and buy I don't know a phone cover and I would essentially get points and I would go to your side and order it one day. Is that all in the same thing?
Raul Galera: Yeah. Not right now, but that's the idea to have everything under just one platform. So, right now we are actually bringing to ... So, Candy Bar right now is just 100% loyalty so you go to the store, you go to the restaurant, coffee shop whatever it is and you get a stamp for every purchase that you make. But something that we want to bring obviously as referrals as well. So if I discovered a new restaurant that I really like and I have a lot of friends that I know are going to really like it too I'm gonna get rewarded for bringing them to a physical location.
Raul Galera: And the idea is that in the near future you'll be able to redeem those points and those rewards that you are getting in the physical world, take them to your online shop and being able to cash those rewards online as well.
Andrew Maff: So, you are almost taking every single customer and turning them into an influencer and advocate of your brand and influencing to bring other people in, right
Raul Galera: Technically, I mean, the best part about turning your customers into sales people is that they don't sound like sales people, like I do. So, if you can have someone selling your product for you, that is not a salesperson and obviously going back to what I said earlier; none of your friends is gonna sell something that you're not gonna like just because they are getting $10,$20. No one's gonna do that.
Raul Galera: So, it's the power of word of mouth also includes the fact that it's coming from very reliable stores. You can go online you can search for reviews but at the end of the day the best reviews are the ones that someone that knows you, can give you.
Andrew Maff: Yeah. I like that. It's interesting because social is essentially digital word of mouth for the most part and not in so many ways. So, it's interesting that you guys are finding a way to combine the two of them and advocate it hopefully into all, one attempted platform for the most part.
Andrew Maff: That's interesting, that's pretty cool. That's the goal there. I really ... There definitely seems to be, I feel like a lot of companies try to do a really clear cut between eCommerce versus brick and mortar and it's not always necessary especially for sellers who have a brick-and-mortar but also realize that they need to be online. That's interesting that's awesome I'm really excited to see that one come out.
Raul Galera: Oh yeah. It's just ... It's kinda crazy when you think about it but it's a completely different world when you work with physical retailers than when you used to work with eCommerce.
Raul Galera: You're used to having everything ... A lot of things a lot of things are automated. Everyone is hoping for innovative and obviously eCommerce stores have different problems than brick and mortar stores do.
Raul Galera: So, it's very interesting and at the end of the day, like you said; there's has to be a way of connecting those two worlds. So, for retailers that have two lives, we can, probably with technology that can help them both of them that they never leave that same platform. I think you are basically saving a lot of time for them.
Andrew Maff: It's awesome, Raul. I really appreciate it. I don't wanna take anymore of your day. Thank you so much.
Andrew Maff: Feel free if you wanna give closing remarks on Referral Candy were they can find you.
Raul Galera: So, they can find us at referralcandy.com and candybar.co. Also, if they have any follow-up questions they can get in touch with you or me here over our Facebook.
Raul Galera: So I'll be happy to take all those questions. And basically if you have an eCommerce store that ... it has a recurring number of orders and customers, you can use that existing customer base to turn them into your marketing department basically.
Raul Galera: So, it's one of the most cost effective marketing channels out there and agencies like you guys can really help reset us get started on this type of marketing as well. We've been working on this for a while now and it's been a pleasure. So, Thanks again for inviting me here.
Andrew Maff: Man, anytime. Appreciate it. We'll have this thing up on YouTube as well so I'll make sure to add a link as well and all that fun stuff so that people could reach you out in the future. But Raul, much appreciated, thank you so much. Enjoy your weekend and I'm sure you and I will be in touch again soon.
Raul Galera: Thank you. Bye-bye.