We often state that lasting customer loyalty and quality customer engagement boil down to a great customer experience. From the moment shoppers first arrive on your site to the moment they excitedly unpack their orders, an optimized customer experience is a crucial factor in whether or not shoppers come back to your store next time they are ready to make a purchase.
The functionality and design of your referral program should be created with that in mind. When a referral program is presented to customers properly, its overall performance skyrockets.
In fact, the data supports this notion: Swell clients who follow our referral program “best practices” typically see payback on their referral program of up to 30x compared to other stores.
Two important statistics that serve as benchmarks for the efficacy of a referral program are total referral program shares, and the percentage of those shares which result in a converted visitor. In other words, how often are your customers motivated to share their referral link with their friends, and are those shares “quality shares” that yield high-converting traffic to your store? With our clients, we try to understand and diagnose problems with every step of the experience to ensure that each program reaches its full potential.
So what problems have we found with most referral programs?
While there are many best practices Swell referral programs follow to ensure that referral link shares convert at a high rate, we’ve found that the top of the “funnel” often gets overlooked; many merchants need to invest additional energy in getting their existing customers to share referral links in the first place.
The decision to share a referral link with friends can be a difficult one for shoppers; not only must they be faithful advocates of your brand, but they typically need to be motivated by an adequate discount as well.
For those reasons, we find that even in our high-performing programs, only about 5% of a merchant’s existing customer base will actually share their referral link and receive a click on it. Here’s what that funnel looks like for one of our high-volume merchants:
Clearly, optimizing the referral program experience for shares is a critical first step.
UX issues can also plague referral program shares.
Even with faithful, motivated advocates though, customers considering making referrals drop out when it’s not incredibly easy to share your brand. Many referral programs struggle to overcome these barriers and tend to underperform as a result.
Many referral programs today require a convoluted process to allow customers to share referral links. In some cases, referral programs can be difficult to locate on the site. In others, customers have to log into a store account and find their way back to a referral program module before being able to share. Lastly, we’ve also seen customers get asked to leave the merchant’s site and go to a third-party landing page before being able to participate.
As with any other user flow in e-commerce, the more steps required to share, the more conversions (or in this case, actions) are going to suffer. For mobile users in particular, any issues plaguing a desktop experience are only exacerbated!
Just as creating a well-integrated program that eliminates unnecessary steps is critical to driving share volumes, so too is providing a number of easy-to-use sharing options once somebody is ready to refer. This is particularly important on mobile, where every extra tap is another opportunity to drop out of the funnel.
As our team spent hours studying referral program analytics to determine what truly moved the needle, we reached the conclusion that different customers prefer to refer their friends using different mediums (e.g. a Facebook share vs. a direct email), and certain mediums are more popular in desktop vs. mobile settings.
Because mobile is so critically important for virtually all of our merchants, we decided to take take a deeper dive into the different ways in which customers typically share referral links.
Social Media Shares
Depending on your customer demographics, social media is a popular way for many customers to share their referral links; for many merchants, over 50% of their shares happen on Facebook and Twitter.
However, asking a customer to support your brand via a share on their Facebook page or a tweet through their Twitter account requires a high level of social investment; most customers carefully curate and heavily scrutinize the content they post to their social media pages because those posts are largely untargeted. For that reason, only the most brand-invested or discount-driven customers are willing to advertise a brand to their entire social media audience.
Many customers prefer to share their links via email, which is a much more personal form of communication. While email shares are typically one of the highest-converting sources of shares, we’ve also found that they leave something to be desired in a couple of respects.
First, a study by The Pew Research Center revealed that email is one of the least used mode of interpersonal communication amongst younger demographics. If your brand serves Millenials, “Gen Y”ers, or other young populations, they may not be as eager to send their friends an email with your store.
Second, email can be clunky on mobile. Programs have to trigger a form, which means that the customer has to type in their friends’ emails on a small keyboard.
Does that make email an ineffective way of sharing referral links? Our research proves exactly the opposite! That being said, it did lead our team to conclude that there are more options to help solve some of the drawbacks that we’ve found with existing share options.
Our research eventually brought us to add another option for a customer to share their referral link -- it’s a forward-looking solution designed to maximize high-quality referral link shares for our clients’ referral programs.
We’re excited to announce that we’ve added referral link shares via Facebook Messenger as a foundational piece of our referral tool.
Why are shares via Facebook Messenger a game-changer?
The aforementioned Pew Research Center Study also indicated that instead of email, many consumers prefer to conduct online conversations through instant messaging and messaging on social media sites.
So then, naturally, the next question was which of these is the best way to encourage customers to share referral links with their friends? Facebook messenger was the answer for three key reasons:
Broad, high-quality potential audience:
The average facebook user has 350 friends, with 15% of users having over 500. Posting on facebook may be the quickest way to reach this audience but ultimately yields a lower click-through rate. These posts compete for attention within friends’ newsfeeds and can get be hidden based on when they are posted and when people are active on Facebook. In addition, Facebook has built detailed algorithms that limit the content that each user sees based on their interactions, meaning that each Facebook post does not necessarily reach all of the 350 friends.
The average consumer also saves phone numbers, instant message accounts, and friends’ email addresses less frequently than they “add” Facebook friends. Shoppers looking to share their referral links via Facebook Messenger immediately have access to sending direct messages to any of their friends, including those whose phone numbers they may not have saved. This combination of quality and access makes Facebook Messenger a “happy medium” of sorts that optimizes referral program performance.
Minimal Required Social Commitment:
The greater the “collateral damage” of a referral link share, the higher the perceived social commitment required. Essentially, people don’t want to be viewed as spammers on social media. When people repeatedly share content that their friends ignore or disregard, they diminish their own social capital and credibility. For this reason, unless a shopper believes strongly in a product, they may be hesitant to share it with their entire customer base.
Facebook Messenger allows shoppers to target friends that they know will enjoy the brand they are sharing, thus preserving and even enhancing their social capital and making the referral share process a more rewarding and enjoyable experience overall.
Optimized Messaging strategy:
Shoppers nowadays would rather be talked to, than talked at. For this reason, a back and forth conversation is generally preferred to a solitary message. While most forms of online communication can facilitate conversation, direct instant messaging type tools (like Facebook Messenger) have been developed specifically to replicate the feeling of a face to face conversation and are more effective at creating this atmosphere than email.
So how does this functionality all work with Swell?
Implementing Shares via Facebook Messenger with Swell
As we stated earlier in this post, we are always looking at how to create the ideal customer experience and generate as much value as possible for our clients. This means making it as easy and intuitive as possible to allow customers to complete the process of sharing their links. We’ll break down the user experience for a customer looking to share their referral link via Facebook Messenger and explain how each step has been crafted to increase quality referral link shares and ultimately maximize revenue created via referrals.
We’ve studied what works and eliminated superfluous details and fluff. Our interface keeps it simple: Wherever you choose to display your referral program, all customers will need to do is click on the Facebook Messenger option. A window will subsequently popup and give you the option to select friends you’d like to share your referral link with and write a personalized message.
Keep In Mind that the Answer is Always Store-Specific
Each store is different and attracts different types of customers. For this reason, we like to offer our merchants as much flexibility as possible when they decide how to display their referral program. One store might see particularly high engagement on Social Media and might prefer to prominently encourage customers to share their link on Twitter. Another may notice that customers are generally unwilling to post on Facebook, but excited to directly message their friends through Facebook Messenger. Rather than using pre-constructed templates of any sort, we prefer to help your business play to your strengths and maximize your results -- using our SDK (available on our Gold plan and above), you can easily add the Facebook Messenger option to your existing program with a line of code.
Our Customer Success Gurus or Client Success Managers are standing by to help you implement this feature today!