All Articles Marketing Marketing Strategy 5 keys to leveraging social recommendations

5 keys to leveraging social recommendations

3 min read

Marketing Strategy

This post is by Greg Brown, chief revenue officer of Extole, a social-recommendation marketing platform that helps brands harness the marketing force of their social graphs.

Retailers and brands are increasingly recognizing the value of social marketing and are integrating this channel into their overall marketing efforts. Three-quarters of those polled in a recent Alterian study said they plan to increase spending on social and digital media this year. Marketers focusing on social recommendations, empowering customers to advocate for the brand, are the ones seeing measurable results. Recommendation marketing is driving an increase in transactional activity, such as lead generation and sales, and strategic assets, such as brand equity and customer loyalty.

Roku, maker of a streaming-entertainment device for TV — and an Extole customer — is one such company. Roku already manages an online marketing portfolio of search-engine optimization and marketing, affiliate programs, online display advertising and public relations. While these efforts have worked well together to form a strong marketing plan, Roku discovered that recommendations from happy customers are one of the most effective ways to leverage these channels to increase its customer base.

Roku adopted Extole’s recommendation platform, which lets customers earn rewards for referrals. The program provides Roku advocates a way to reach out to their networks via Facebook, Twitter, embedded links in e-mails and personalized URLs. In return, Roku provides referrers — more than 80% are Netflix subscribers — one free month of Netflix movies for every referral that results in a purchase through the Roku website.

Over six months, Roku attained 10,000 customer referrals per month and increased customer-based referrals by 30%. It generated more than $250,000 in revenue through the program and more than 20,000 site registrations.

Roku’s results underscore market research: Nielsen data show that 90% of consumers rely on friends’ recommendations, compared with 14% who trust mass advertising.

Thinking about adopting a referral program? Here are a few tips to consider.

  • Go multichannel. Create multiple ways — e-mail, blogs, social networks — for customers to share referrals. Everyone has a preference for reaching out to friends.
  • Be consistent. Ensure your branding within the referral program is consistent, as consistency leads to credibility. Avoid programs that do not permit white labeling to preserve your brand identity and customer experience.
  • Encourage your referrers. Because there was considerable overlap between Roku and Netflix customers, a Netflix reward was a logical motivator. Determine what your customers value, and give it to them. Even better: Tier your rewards to accelerate customers’ engagement.
  • Track your progress. Keep tabs on who is sharing, how they are sharing and whether the sharing is resulting in customers and sales. Often, you can refine your campaign based on early results to maximize its effectiveness.
  • Marketers, don’t forget to market! A referral program must be promoted to be successful. Avenues for promotion include your website, e-mail, social channels and newsletters. Also, prompt your customers to take part in the program shortly after they make a purchase, when your company is fresh on their minds.

Have you experimented with social recommendations? What has your experience been?

Image credit: eyeidea, iStock Photo