Talkable Talks Referral Marketing and How to Incentivize Potential Customers
Another Friday Feedback has come and gone.
On December 7th, 2018 our own Andrew Maff sat down with Lee Srebnick, CEO of Talkable, to talk about what Talkable does and how it can help you with referral marketing and incentivizing potential customers.
Join us every Friday at 3 PM EST as we go LIVE on our Instagram page with the e-commerce industry experts and top sellers that you want to hear from! ---
Follow along with talkable
Our goal really is to turn referral marketing into a repeatable revenue stream. I think one of the things that we've seen is Facebook Ads, Google Ads continue to get more expensive. They drive a lot of traffic to all of these websites but we wanna capitalize on that traffic. We've seen that referrals are a great way to not only find new business but to find high quality customers. One of the stats that really sticks out to us is the lifetime value of a customer that comes in through referral, as you can imagine is much higher than somebody who finds your website whether they click on it on Facebook or find it organically.
Talkable wants to be the tool that gives your brand, your website, your business the ability to have that offline, online, word of mouth. So we facilitate that process, obviously have tools in place to run A/B test segmentation. We have a lot of fraud settings on the backend as well. But at a high level, we want to drive more referrals for your business, as well as be a partner to you, match up with your marketing calendar, and use referrals beyond just sending to your friend, but also through a campaign-based approach so that when you guys or your businesses are running a Mother's Day campaign, or a Black Friday campaign that we just wrapped up hundreds of those, that we can actually use referrals to boost that word of mouth as well.
Andrew Maff: Nice, that's fantastic. It's interesting, I find referral marketing to be possibly one of the most underutilized strategies from most sellers. I don't really understand it. Obviously, you know a little bit about us, people watching us do as well. We do a ton of stuff on Amazon as well, and Amazon's always tied up with reviews, and of course, we've done work with Yotpo, and Trustpilot, and all them, and of course they're all tied to reviews too. Really the big reason that reviews work so well is social proof.
People look at the imagery of a product, and they ignore all the description stuff, they just want to know what do people have to say about it. The interesting thing that no one ever thinks about, is they're always so bent on getting those reviews, and getting as many reviews as they can. But that is hundreds of strangers, when in reality, one friend tells you that this product is great, and that is equivalent to hundreds of strangers saying that it's great as well.
It's amazing how many situations I've been able to see how consumers act, whether we're doing some kind of trial thing to test or whatever, and a lot of times if a product has hundreds of reviews, and they're good reviews, they will most likely convert and purchase. But if a friend tells them about something on a product that has zero reviews, they will still be just as likely to purchase. And that blows my mind that there's such leverage with referral marketing, and yet it seems to me that it's usually underutilized, just because a lot of the sellers we tend to work with, they come and they don't have a referral program set up, and I'm like why? That doesn't make any sense. And chances are as a business, it's brilliant because there's a good chance that the consumer you're trying to reach has friends that are very similar to that consumer as well.
Lee Srebnick: Exactly. What I like to say is your best customer today definitely knows who your best customer is tomorrow.
Andrew Maff: I like that.
Lee Srebnick: If I buy a pair of kakis online-
Andrew Maff: I'm going to steal that.
Lee Srebnick: Yeah, go for it. Quote me on that. If I buy a pair of kakis online, there's a good chance that I'm hanging out with a bunch of other people that want to buy kakis online. People talk about it. I think reviews are very powerful social proof. Obviously, when I buy anything on Amazon or any website, I look at the reviews as well but just having that personal touch, saying hey, "I bought this, I think you would enjoy this. Here is X percent off your first purchase just to try it." That's where Talkable comes in.
Andrew Maff: Nice. One of the best questions I tend to get about referral programs, what should my incentive be, right? And I know that that's always a loaded question because there's so many factors, and I know that even right now, you know I'm about to ask you that question and you're probably going, I don't know, whatever you want it to be. But I still have to ask the question. So what do you usually see? Maybe we don't do an amount, but is it usually cash or is there a percentage off, or is it like, not a referral, because we're talking about referrals, raffles. What do you tend to see works the best?
Lee Srebnick: Yeah, I think this is definitely the first question that comes up right before we launch the program. We have to obviously establish what the offer's going to be. In terms of best practices, what we like to start out with is 20% off the average order value that you're currently seeing. Obviously, there is a lot of different types of businesses out there. If you're selling a higher priced item, 20% off might work for you, but if you're selling for instance, lip stick or any sort of lower priced item. 20% off might be too much.
In terms of structuring the reward, we look at it on two different sides. Obviously, there needs to be a reward for the advocate, or the person sharing. They're also needs to be a reward for the friend. With Talkable, we give you the flexibility to test the reward on both sides, so we can actually figure out for your brand, is it 20% off or is just $5 off? We can test that 50/50. We can do a lot of different, excuse me, types of campaigns as well. Let's say you're not comfortable giving away 20% off for just referring one person, but if somebody refers two people, that makes it a little bit more lucrative to you, so we can set up more of a tiered campaign approach. I think the most important thing when you're sort of thinking about that offer is, it has to be attractive to the advocate to share.
Andrew Maff: Yeah.
Lee Srebnick: On any eCommerce site, when you're talking to the product team, eCommerce team, even the marketing team, the hardest part is lobbying for real estate on the website. Everyone wants their little nook and cranny for their widget, or for their deal. One of the things that we've seen in the industry is signing up for the email newsletter is typically 10 to 15% off, and if you're going to launch a successful referral program, the offer needs to be a little bit stronger than just a typical sign up.
Andrew Maff: Yeah.
Lee Srebnick: If you think about it in the mind of the consumer, if I can type in my email address and get 15% off, or I can share with a friend and get 15% off, it's a lot easier for me to just type in my email address. And so, with the competing offers on-site, we try and steer people and say, "Hey, looks like it's 15% off for signing up for the email newsletter." If that's the highest you can go for the percentage, let's use a dollar off instead for the referral program. It looks different, it looks a little bit more fresh. But making sure that if they are competing offers, that the one for the referral program is a little bit stronger because we view it more as a reward more than a discount. Obviously, the customer has to not only share with their friends, but their friend has to go through and make a first time purchase as well.
Andrew Maff: Nice. You and I both know that Talkable is not like some of the standard ones out there where it's just kind of like, hey, here, customize this popup, customize this email. Great, now you have a referral program. You guys have a pretty robust backend in terms of like analytics. Obviously, you have A/B testing which you just talked about. Can you give me a little insight on what some of the availabilities are in the backend of being able to track this kind of stuff?
Lee Srebnick: Yeah, absolutely. I think the power of Talkable and the way that we view referrals is at such a granular level. A lot of the times when I'm talking to somebody who has an in-house program already, the best way to describe the Talkable analytics is we really break it out into two different funnels for referrals. The first funnel is the advocate side, or as we call it, the people that are sharing. And so, this is top of the funnel for referrals. How do we get more people to share? And that's where that A/B test optimization comes in with the offer. Advocates aren't sharing, let's increase the offer, or let's change it from percentage to dollar off, get more people to share.
The more people that share, come down the funnel, obviously at the bottom of that is your friends that are clicking on those links. So whether I share via email, or whether I share via Facebook, we need to get people to actually click on those links, and come back to the site. And so, we do a lot of optimization with the emails as well, whether that's subject line, whether that's a call to action in the email that says instead of get your discount, we can change it to limited time offer and see if that's going to generate more clicks. Once we've sort of optimized the top of the funnel, where the clicks are coming in, people are coming back to the website, then we have to optimize the bottom of the funnel which is converting into an actual customer.
And so, some of the things that we do on that, is one on the fraud section. Obviously, with referrals, it's very rampant for people to try and email themselves, or try to refer themselves. And so, we have fraud settings on the backend that can block these people from self-referring themselves based on cookie, based on email address, based on shipping address. We have a number of other settings on the backend. We positioned ourselves a little bit in the mid-market enterprise in the market here. And so, having those broad settings are really important, especially if you want to come out with a $75 coupon. We want to make sure that we can button that up on the backend.
Then, it comes down to segmentation. I think one of the main parts of Talkable that almost gets overlooked is our segmentation-ability post-purchase. When you're segmenting people on-site, obviously you're segmenting versus first time customer, maybe a third time customer. You're doing a lot of segmentation already. Why not do it in the referral program as well? And so, some of the segmentation that we've been doing recently is after somebody checks out, we can segment that offer based on how they purchase. For instance, if I'm checking out on a website, and I spend $500, I probably know somebody else that can spend $500. So instead of showing me a $5 offer, let's show Lee a completely different offer, so get him to share with a high-value friend as well.
We can also segment based on share history. So let's say I've checked out on your website three times, obviously I'm a loyal customer, but I haven't shared with anyone. Let's serve Lee a completely different offer this time, and see hey, maybe it's a 20%, we show him $20, that's going to get him over the line and to continue sharing to fill that top of funnel.
So in terms of analytics and reporting, on the dashboard you can see exactly which channels are performing the best in terms of referrals. So by channels, I mean is email performing the best? Or are people clicking on more Facebook shares and converting to the website. Are people [inaudible 00:12:54] links? 70% of your conversions are coming through on email, and only 10% are coming through on Facebook, let's optimize that email and try and get that up a little bit, maybe spend less time on Facebook.
We give you a high-level view of how much revenue you're making. Obviously, that's the one stat everyone wants to look at a dashboard, how much money is this making us? But on the backend, we have reporting around the emails, A/B testing, segmentation, and fraud settings as well.
Andrew Maff: Beautiful. Lee, I love to keep these like straight to the point, learn a little bit about you guys. Honestly, like I feel like I know all about Talkable now.
Lee Srebnick: Perfect.
Andrew Maff: That was great. I loved that. I really appreciate it. Of course, I'm pretty sure we already told you this, this goes up on YouTube, and the whole blog and all that stuff, so it'll end up being everywhere.
Lee Srebnick: Yup.
Andrew Maff: Can you just let everyone know how they can find out a little bit more about Talkable and all that fun stuff?
Lee Srebnick: Yeah, absolutely. I think the first place to start obviously is our website, talkable.com. We've got some blog posts up there as well, just talking about some industry news. I think one of the best parts about having a company like Talkable partnering with you is we have a lot of headcounts in terms of customer success managers, account managers, and we wanna work with the businesses to make them successful. So our sales process is less, here's what we can do, here's how much it costs, and more how can we help you achieve X, Y, and Z goal? What level of service are you looking for?
If you have a referral program up and running, and you want to learn some of our best practices, I would love to connect with you. You can find me, you can email me, lee@talkable. Or if you're just interested in some of the features that we're going to be launching next year, I think Q1 is going to be a huge year, not only for digital marketing but for Talkable in terms of other campaigns that we can run, whether that's rewards, loyalty, whether that's giveaways, whether that's collecting more emails. I think we're innovating pretty quickly and so, each year Talkable are coming with some new products that are sort of canvassing the digital marketplace, and also looping them into one tool that you can log in to, to drive traffic to your website, as well as revenue.
Andrew Maff: Lee, really appreciate it. Thank you so much, buddy. Enjoy your Friday, and I'm sure I will talk to you again soon, all right, buddy?
Lee Srebnick: Sounds good. Excited for the blog post.
Andrew Maff: Thanks buddy, have a good one.
Lee Srebnick: See you, happy Friday.