Referral marketing benchmarks - see if your referral program measures up.

1. Referral Marketing Benchmarks
Revealed
Measure & Optimize Your
Referral Program
By Tony Mariotti
@tonymariotti

2. Here’s a fair question:

3. Here’s a fair question:
“What kind of ROI can I
expect from a
referral program?”

4. Every business is
unique.

5. Every business is
unique.

6. Every business is
unique.

7. Every business is
unique.

8. Every business is
unique. Here’s
what they have in
common:
Referral programs
work!

9. Here are referral benchmark ranges for
each step of the referral marketing
funnel.

10. Here are referral benchmark ranges for
each step of the referral marketing
funnel.
Followed by some
suggestions
for optimizing each step.

11. The Referral Marketing Funnel

12. The Referral Marketing Funnel
User Participation Rate

13. The Referral Marketing Funnel
User Participation Rate
Sharing Rate

14. The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits

15. The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate

16. The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate
Lift on Revenue
Cost Per
Acquisition (CPA)

17. The Referral Marketing Funnel
User Participation Rate
Sharing Rate
Referral Visits
Referral Conversion Rate
Lift on Revenue
Cost Per
Acquisition (CPA)

18. User Participation Rate
This is the percentage of customer who share
your business with friends,

19. User Participation Rate
This is the percentage of customer who share
your business with friends,
creating the raw potential
to drive new customers
back to you.

20. User Participation Rate
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.

21. 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.)

22. 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)

23. 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…

24. 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).

25. 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).

26. 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).

27. 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).

28. Some customers have
exceeded a 50% sharing rate,
a notable optimization
goal for everyone.

29. How To Improve Sharing Rate
• A/B test different referral incentives & offers

30. How To Improve Sharing Rate
• A/B test different referral incentives & offers

31. How To Improve Sharing Rate
• A/B test different referral incentives & offers
• A/B test variations to the content

32. How To Improve Sharing Rate
• A/B test different referral incentives & offers
• A/B test variations to the shared content

33. Referral Visits
The number of friends who see shared content
on Facebook, Twitter or an email message
Hey friend,
I love this
product.
Click here &
get $20 off!

34. Referral Visits
The number of friends who see shared content
on Facebook, Twitter or an email message
and then click to visit your website.
Hey friend,
I love this
product.
Click here &
get $20 off! www.

35. Referral Visits
1 visit
per share:
meh
www.

36. Referral Visits
1 visit
per share:
meh
2 visits
per share:
solid
www.
www.
www.

37. Referral Visits
1 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.

38. How To Improve Referral Visits
• A/B test referral incentives/offers

39. How To Improve Referral Visits
• A/B test referral incentives/offers
• A/B test copy, images, etc.

40. 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.

41. Referral Conversion Rate
The percentage of referred visitors (friends) that
convert when they get to your site.

42. Referral Conversion Rate
The percentage of referred visitors (friends) that
convert when they get to your site.

43. Referral Conversion Rate
The percentage of referred visitors (friends) that
convert when they get to your site.

44. Referral Conversion Rate
The percentage of referred visitors (friends) that
convert when they get to your site.

45. How To Improve Referral Conversion Rate
• A/B test referral incentives/offers

46. How To Improve Referral 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)

47. 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.

48. 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:

49. Referral Marketing Results
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
Cost Per
Acquisition (CPA)

50. Lift on Revenue
less than
5%
meh

51. Lift on Revenue
5% to
15%
solid
less than
5%
meh

52. Lift on Revenue
30%
You’ve
nailed it!
5% to
15%
solid
less than
5%
meh

53. 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.

54. Cost Per Acquisition
Compared to display advertising ($20 to $40
CPAs), Pay Per Click ($30) and display
retargeting ($10), referral programs are
extremely efficient.

55. Thanks!
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Tony Mariotti
@tonymariotti