referral marketing benchmarks
DESCRIPTION
Referral marketing benchmarks - see if your referral program measures up.TRANSCRIPT
Referral Marketing Benchmarks Revealed
Measure & Optimize Your Referral
Program
By Tony Mariotti@tonymariotti
Here’s a fair question:
Here’s a fair question:
“What kind of ROI can I expect from a
referral program?”
Every business is unique. ≈
≈Free
Free
miu
m
SaaS
Every business is unique.
≈Free
Free
miu
m
Dai
ly
Dea
ls
SaaS
Full-
priced
Char
itabl
e
Givin
g
Every business is unique.
≈Free
Free
miu
m
Dai
ly
Dea
ls
SaaS
Full-
priced
Appar
el
Char
itabl
e
Givin
g
Subs
crip
tion
Etc.
Every business is unique.
≈Free
Free
miu
m
Dai
ly
Dea
ls
SaaS
Full-
priced
Appar
el
Char
itabl
e
Givin
g
Subs
crip
tion
Etc.
Every business is unique. Here’s what they have in common:
Referral programs work!
Here are referral benchmark
ranges for each step of the
referral marketing funnel.
Followed by some
suggestions
for optimizing each step.
Here are referral benchmark
ranges for each step of the
referral marketing funnel.
The Referral Marketing Funnel
The Referral Marketing Funnel
User Participation Rate
The Referral Marketing Funnel
User Participation Rate
Sharing Rate
The Referral Marketing FunnelThe Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate
The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate
Lift on Revenue
Cost Per Acquisition
(CPA)
The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate
Lift on Revenue
Cost Per Acquisition
(CPA)
Track and optimize each step
This is the percentage of customer who share your business with friends,
User Participation Rate
creating the raw potential to drive new customers back to you.
User Participation Rate
This is the percentage of customer who share your business with friends,
These could be people who visit your website, follow you on social media, and even those who fit none of the preceding criteria but for whom you have an email address.
User Participation Rate
How To Improve
• Enable sharing in more places on your website
(homepage, order confirmation page, user
account pages, product pages, stand-alone
referral page, etc.)
User Participation Rate
• Enable sharing in more places on your website
(homepage, order confirmation page, user
account pages, product pages, stand-alone
referral page, etc.)
• Promote your referral program to your email
list and social followers (email blast, post on
Facebook, Tweet)
How To Improve User Participation Rate
• Enable sharing in more places on your website
(homepage, order confirmation page, user
account pages, product pages, stand-alone
referral page, etc.)
• Promote your referral program to your email
list and social followers (email blast, post on
Facebook, Tweet)
• Integrate your referral program into
newsletters, transactional emails and more…
How To Improve User Participation Rate
Sharing Rate
This is the percentage of people who share when presented with an opportunity to do so via a referral widget (overlay or embed).
Sharing Rate
This is the percentage of people who share when presented with an opportunity to do so via a referral widget (overlay or embed).
7%meh
Sharing Rate
This is the percentage of people who share when presented with an opportunity to do so via a referral widget (overlay or embed).15%
solid7%meh
Sharing Rate
This is the percentage of people who share when presented with an opportunity to do so via a referral widget (overlay or embed). 30%
You’ve nailed it!15%solid
7%meh
Some customers have exceeded a 50% sharing rate, a notable optimization goal for everyone.55%
INCREDIBLE!
• A/B test different referral incentives &
offers
How To Improve Sharing Rate
• A/B test different referral incentives &
offers
How To Improve Sharing Rate
store credit
$20 offfreegift
etc.loyalty
points
• A/B test different referral incentives &
offers
How To Improve Sharing Rate
store credit
$20 offfreegift
etc.loyalty
points
• A/B test variations to the content
• A/B test different referral incentives &
offers
How To Improve Sharing Rate
store credit
$20 offfreegift
etc.loyalty
points
• A/B test variations to the shared content
etc.images
call to
action shared
copy
The number of friends who see shared content on Facebook, Twitter or an email message
Referral Visits
Hey friend,I love this product.
Click here & get $20
off!
The number of friends who see shared content on Facebook, Twitter or an email message and then click to visit your website.
Referral Visits
Hey friend,I love this product.
Click here & get $20
off! www.
Referral Visits1 visit
per share: meh
www.
Referral Visits1 visit
per share: meh
2 visits per share: solid
www.
www.
www.
Referral Visits1 visit
per share: meh
2 visits per share: solid
More than 5 visits per share:you’ve nailed it!
www.
www.
www. www
.www
.
www.
www.
www.
• A/B test referral incentives/offers
How To Improve Referral Visits
• A/B test referral incentives/offers
• A/B test copy, images, etc.
How To Improve Referral Visits
• A/B test referral incentives/offers
• A/B test copy, images, etc.
EXPERT TIP: Shared images
on Facebook are quite
prominent in the friend’s
news feed and deserve
special attention.
How To Improve Referral Visits
The percentage of referred visitors (friends) that convert when they get to your site.
Referral Conversion Rate
Referral Conversion Rate
less than 4%
meh
The percentage of referred visitors (friends) that convert when they get to your site.
Referral Conversion Rate
10%solidless than 4%
meh
The percentage of referred visitors (friends) that convert when they get to your site.
Referral Conversion Rate
more than
30%
You’ve nailed it!10%solidless than 4%
meh
The percentage of referred visitors (friends) that convert when they get to your site.
• A/B test referral incentives/offers
How To ImproveReferral Conversion Rate
• A/B test referral incentives/offers
• Build and A/B test a
dedicated referral
landing page
(much better than driving
referred visitors to your
home page)
How To ImproveReferral Conversion Rate
Referral Marketing Results
This is where the rubber meets the road –
the very things that determine if your time and effort has been worth it.
Referral Marketing Results
This is where the rubber meets the road –
the very things that determine if your time and effort has been worth it.
Two key metrics summarize it all:
Referral Marketing Results
Lift on Revenue
Cost Per Acquisition
(CPA)
This is where the rubber meets the road –
the very thing that determines if your time and effort has been worth it.
Two key metrics summarize it all:
Lift on Revenue
less than 5%
meh
Lift on Revenue
5% to 15%
solid
less than 5%
meh
Lift on Revenue
30%
You’ve nailed it!
5% to 15%
solid
less than 5%
meh
Cost Per Acquisition
Referral programs average ‘single digit CPAs.’
That is to say, you should see your cost per acquisition no more than $10 per new customer. $10
Compared to display advertising ($20 to $40 CPAs), Pay Per Click ($30) and display retargeting ($10), referral programs are extremely efficient.
$10
Cost Per Acquisition
Thanks!For more tips and examples, visit us:
Tony Mariotti@tonymariotti
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