Refer-a-Friend Program at Root of Big Hair Growth

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Folica, a purveyor of hair products, prides itself on customer satisfaction. When the online retailer was looking for a marketing solution to encourage customer advocacy, it enlisted Extole to help launch a refer-a-friend program to drive sales. 

"A refer-a-friend program revolves around offering your friend a special deal; a program won't be successful if that friend can get the same deal just by going to the Web site home page," explains Greg Brown, chief revenue officer at Extole. "We, therefore, had to come up with an offer structure that was rich enough to encourage current customers to share Folica with their friends and would not be dwarfed by other daily deals advertised on the site."

Jessica Bohm, director of marketing at Folica, recalls, "Prior to our Extole partnership, we were looking for ways to reward customers who shared Folica with their friends. Many of our customers state in their product reviews that they purchased Folica products because of referrals. We needed to find a way to encourage our advocates to continue to grow our brand awareness organically."

Extole offered a "turnkey full-service solution that was cost-effective," Bohm points out. The promotional program was advertised to Folica's 850,000 email newsletter subscribers as well as on all of the company's Web site pages. "Make it easy for your customers to share your brand," Bohm recommends. "Provide compelling offers or opportunities in a format that is super-easy for a user to spread the word."

She continues, "Going into the project, we expected that our customers would slowly join the program. We understood that it would take some time to find our most productive referrers that would take the program to the next level."

However, Folica has quickly seen significant results. Within the first 30 days, Folica had a 16 percent conversion rate—meaning 16 percent of people clicking on a friend's link or post went on to make a purchase—which constituted a 433 percent increase from the 3 percent norm. In addition, Folica reports a 5.5 percent open rate of its emails promoting the program, a 93 percent open rate from customers sending emails to friends, and with a 22 percent click-through rate on those emails. Folica's goal, Bohm says, is to generate 1 percent to 2 percent incremental revenue through the refer-a-friend program by the holiday shopping season.

Folica's partnership with Extole will continue beyond the initial build of the campaign. "Extole facilitates monitoring, tracking, and analysis of the data coming in through the program," Brown says. "In biweekly meetings with Folica, we work together to optimize the campaign to achieve peak results."

Brown adds that Extole provides a "proven and fully hosted solution," rather than merely a new referral program. "Truly plug-and-play from design to fulfillment," he says.

Folica also plans to test offline refer-a-friend promotions to reach additional audiences, as well as implement in-line sharing, one of Extole's new product features, in the next couple of months. "This is a lighter sharing experience that keeps a customer on the Folica Web site so it will be beneficial in facilitating further time on the Folica site along with increasing referrals with the simpler user flow," Brown says. "We will also be moving Folica toward a user flow that will deliver the coupon code to the friend via email as well, so customers can save the coupon code to use at a later date."

The Results:

Since partnering with Extole, Folica has:

  • advertised its refer-a-friend program to its 850,000 email newsletter subscribers;
  • generated a 16 percent conversion rate;
  • attained a 5.5 percent open rate of its emails promoting the program; and
  • achieved a 93 percent open rate from customers sending emails on the program to their friends with a 22 percent click-through rate on those emails. 

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