September's Marketing SCENE
Sep 6, 2011
What Can Your Referral Program Learn From Roku?
Published on August 30, 2011
“Plenty of companies have referral programs,” writes Kimberly Smith, “but how many can say theirs converts at about three times the rate of other online marketing campaigns and brings in over 500 new product sales each month?” In a case study at MarketingProfs, Smith explains how Roku—which makes devices that stream Internet content to televisions—achieved these results:
Testing incentives. The company experimented with rewards that ranged from cash and gift cards to charitable contributions. But a free month of Netflix became the sole incentive when surveys revealed that 80% of Roku customers were also enthusiastic Netflix subscribers. After this switch in the referral program, registration rates skyrocketed (from 1,000 per month to 8,000), referrals doubled and product sales increased by five-fold.
Simplifying the registration process. They use a simple form that doesn’t scare customers off by asking for more information than they actually need.
Offering a variety of sharing options—including email. “Social media may be the hot channel everyone’s looking to for customer recommendations,” notes Smith, “but Roku found that more than 70% of its program registrants chose email for referring their friends.”
Using a reliable system to track referrals. This might seem too obvious to mention, but if you don’t know when a referred lead makes a purchase, you can’t follow through with the promised reward for the referrer.
The Po!nt: Even if you’re happy with your referral program, there might be room for substantial improvement. Over a six-month period, Roku’s retooled approach directly generated $230,000 in revenue.