Improve Your Referral Program Performance Using A Contact Picker!

Trevor Ginn, the host of eCommerce Odyssey podcast in conversation with our CEO, Jay Gibb, explores how a contact picker can be leveraged to acquire more e-commerce acquisitions via an optimized sharing workflow, and email personalization that gets you better email open rates.

Via anecdotal evidence from CloudSponge customers such as Stitch Fix, JustFab, and many more – discover just how a single button can be game-changing for any e-commerce customer acquisition campaign.

Podcast Transcript

Trevor Ginn: :
Hello, and welcome to another edition of the Ecommerce Odyssey Podcast. I’m here with Jay Gibb from CloudSponge, and we’re going to talk about how to improve the performance of referral programs. So, without further ado, Jay, can you explain what a referral program is, in the context of an eCommerce store?

Jay Gibb:
Yeah, sure. Most of them are, some situation where you’ve got a user who loves you and loves your product, and you’re offering them some reward for spreading the word. You give them a code through one of the referral program platforms out there, that there are dozens of and they share the code. And when somebody buys something with the code… Usually, the good ones will have a double-sided referral reward. So, the person who’s actually using their friend’s code, is being offered maybe a discount, or something for free, right? Some encouragement to use the code. And then, when they do that, their friend, the person who sent the referral, will then get something, right? Again, they get something for free, or maybe they get a discount on their next order. So, you can use it as a retention, repeat customer tool as well.

And like I said, there’s dozens of different ways to execute on a referral program depending on what store you are and what platform you’re using, what budget you’ve got and all that stuff. But yeah, those are the basic things that all of those platforms all have in common. It’s that unique code that you can circulate to earn those rewards.

Trevor Ginn:
Okay. So, what are the reasons why referral programs perform badly?

Jay Gibb:
I think-

Trevor Ginn:
What are the errors that you see?

Jay Gibb:
Yeah, there’s a few of them. I think, one of the most obvious ones and the marketing team over at Friendbuy, which is one of the referral program platforms, they talk about this a lot and it’s actually that, a lot of stores just hide the referral program. They bury it under a menu somewhere and they don’t talk about it enough, right? They make you have to log in to use it and they don’t put it on the public website, they don’t mention it in their receipts, they don’t put it in the footer and the header and all the other places on the site where it could go and they just have a link buried somewhere in a menu, and then they wonder why it’s not working, right? And so, I think, one of the things that I always encourage, when our customers are asking me about, “What other things, besides using CloudSponge, can I do to improve the performance of my word of mouth, or my referral program?”

That’s one of the first things I always look for, right? I look for, where on this website, are you actually making it clear that your customers can earn discounts and send discounts to their friends? Right? I think, that’s the first, most obvious one. The second one, is probably right around the rewards and the triggers for the rewards, right? I mentioned already, that a double-sided reward is pretty important. I think, as many people that are interested in earning a discount, there are the same number of people probably, who are more interested in sending a coupon to their friends and being a hero for their friends, more of an altruistic reason for sharing. So, I think, having a double-sided referral program, instead of a single-sided referral program, is worth trying for anybody who hasn’t tried it yet, right?
Super useful thing, and you might be surprised by the difference and how many people use it, if you’re offering a reward to both parties. And then, finally is where we come in. I think, even the best referral programs, that are displayed in lots of places around a website and have great double-sided referral rewards. If they’re making people type email addresses into the referral form, then they’re by default, not performing very well. Because, your users only have so much patience for entering in a comma-separated list of email addresses, especially if they’re on a mobile device, right? They’re not going to do it, if they’re on a mobile device. If they’re on a mobile device, they probably aren’t even going to type one email address, let alone a list of them, right?

On their desktop, if you just give them a form field where you’re asking them to input their friends’ email addresses for a referral program, they might have one memorized, they might have the patience to type one in. But, if you’re trying to get them to do 10, or 20, or 50, they’re going to have to go back and forth between your website and their address book and copy and paste, and assemble a comma-separated list of email addresses. During that process, you’re going to lose most of them, right? You’re basically, distracting them. And so, what our product does, the reason why we exist, is we basically make it so that whatever your existing referral program is, you can add a little address book icon to the input field, for the email addresses. So, whatever the current field is, it’s a field where you’re expecting your users to type in a list of comma-separated list of email addresses.

With CloudSponge, you can just add a little address book icon there, so they can click on it, or tap on it. And then, they authenticate, give you permission to read their contact from Google, or Yahoo, or Outlook.com, or Office 365, or iCloud, or wherever they hold their contacts. And then, they just see a nice Contact Picker. A alphabetized list of email addresses. If they’re on a phone, they’ll see a little alphabet in the margin that they can tap on the letters of the alphabet to jump around, check boxes beside each person. So, they can basically assemble a recipient list inside a nice little Contact Picker interface. And then, when they submit it, the field that they previously would’ve had to type email addresses in, is just filled up with everybody they selected, and then they can just submit your referral form.

Trevor Ginn:
That makes a lot of sense. I mean, when you put it like that, it seems logical. The referral program platforms, why don’t they do that themselves?

Jay Gibb:
It’s hard. It’s difficult software to build and to maintain. And I think, you’ve probably seen it. Anybody listening’s probably seen the authentication window with-

Trevor Ginn:
Yeah.

Jay Gibb:
Google, Yahoo, Microsoft, right? Where you’re giving this website permission to read your contacts. It’s a lot of extra effort to guide your customer. In other words, if you’re a referral program platform and your customer is an e-Commerce store owner, right?

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
To guide those e-Commerce store owners through the process of applying for the API credentials from Google, especially, but also Microsoft, Yahoo and and the other ones and AOL. And so, they don’t do that, because that’s operationally, a lot of work. It’s hard to do, you got to make a video, you got to do all this stuff to get permission, to have your logo on that screen, right? You’re not going to see a CloudSponge logo on that screen.
You need to see the logo of the e-Commerce store, of the Shopify store-

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
The eCommerce store, or whatever, you need to see that logo there, otherwise you’re not going to click through, right? And so, I think, a lot of these referral program platforms, not only do they not want to develop the API, all the API integrations and build their own contact picker and do all that stuff, but they also don’t know how, or they don’t have the interest in actually helping their customers go and get those credentials from all those places and bring it over, so that it can be displayed in the interface, right? And that’s what we’re optimized for, that’s what our whole company does. And so, what those guys do, at least the good ones, in my opinion, they partner with us. So, there’s lots of – platforms out there that exist, that have the address book icon, and all of them use a partnership with CloudSponge to deliver that.

Trevor Ginn:
Okay. So, what additional performance, have you found, that using your system gives?

Jay Gibb:
Usually, about double. Double, sometimes triple.

Trevor Ginn:
Okay.

Jay Gibb:
And what I mean by that, is if you’ve got an existing referral program, whatever number of actual referrals are getting sent every month, let’s say you send 100 referrals every month. By adding that button, you’ll probably make it 200, or 300, right?

Trevor Ginn:
Okay.

Jay Gibb:
And it’s interesting. It’s actually quite interesting math, because usually, what we see is only about five to 7% of people who are going to make a referral, will use the address book button, 5%, one out of 20, right? Not everybody uses it. Some people just have one friend they want, or some people don’t trust it, they don’t want to do it, they don’t want to share their address book, right? It’s totally normal. But, the one out of 20, or the 5% of people that do use their address book, will together combined, they’ll double the total number of referrals, because it’s so much easier, right?

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
We’ve seen that time and time again, where our customers will have an existing referral program before they onboard with us, they’ll go through the onboarding and get it on there. And then, immediately see a double, or a triple improvement to the number of referrals that are being sent.

Trevor Ginn:
Okay.

Jay Gibb:
Yeah.

Trevor Ginn:
So, I’ve got a question for you, just slightly off topic, but still on email. Why is it that… As an e-Commerce store owner myself, I see a lot of the time that people type the wrong emails in, when they’re going through checkout. Why does someone like Shopify not do, “Log with Google, or log in with Amazon, or whatever.” Because, that would mean that, people wouldn’t enter the wrong emails. Why do they do that? Or, is it because, it cloaks the email address?

Jay Gibb:
I’m not sure. I mean, it could be… I mean, I just have to guess, because I don’t work at those companies, of course, right? But, I think it could be… There’s two things that come to mind. One, is that they don’t want to make a choice, right? They don’t want to alienate everybody that prefers Office 365, by putting Google on the page, right?

Trevor Ginn:
Yeah.

Jay Gibb:
It could be that they just don’t want to… And then, they don’t want to have this huge list of options, that’s also confusing, right? So, it could be that, or it could be what I already just described. It could be that the effort involved, especially for a company at scale, that’s got whatever, millions of stores, or whatever Shopify has, to actually guide, because Google won’t let Shopify put that Shopify logo on those websites. It’s against policies, right? Those websites need to have their own OAuth, the Google OAuth credentials. And so, it’s very possible that the effort involved by the Shopify customer success team, or customer support team to get every single one of their stores through that application process with Google, is just way too much effort, right? It could be just, it’s just not worth it.

Trevor Ginn:
Yeah. So, do you think… I mean, do you see, obviously as somebody who works with a lot of emails, do you think email, is still… It feels a bit old-fashioned, but is email is still really important?

Jay Gibb:
Yeah, yeah. It’s the most important open network that humanity’s created so far. I don’t think, it’s going anywhere, right?

Trevor Ginn:
Right, okay.

Jay Gibb:
I mean, everybody’s.

Trevor Ginn:
What do you see, the… I mean, obviously, I use it, but I’m a, pushing 50 year old man. I use email all the time. Do you think that the millennials and the Gen Zs, are they going to continue using email, in the same way that people like me use email? Or, is it all going to move on onto WhatsApp, or something similar?

Jay Gibb:
I mean, I think we’re starting, and this is all just opinion, of course. I don’t study this stuff professionally, or anything. But, what I see is that the communication channels are fracturing based on use case, right? I think that, when people communicate with businesses, they’re mostly using email for that, when they’re communicating with their friends, they’re using me messaging platforms for that, right? And I don’t think email’s going anywhere. I mean, I think, it’s a super rich media format and it’s super mature and it’s way stronger when it comes to spam identification and longevity. Emails stay in your inbox forever, right?
Whereas, text messages and things like that, are somewhat ephemeral, right?

Trevor Ginn:
Yeah.

Jay Gibb:
And so, I think, both messaging, whether you’re referring to text messaging, or closed platform messaging, like WhatsApp and Signal and Telegram and stuff like that, those have their place and email has its place. I don’t think they’re necessarily at odds with each other. I think, they can all coexist and they’ve all got their use cases that they make sense for.

Trevor Ginn:
Okay. What are the GDPR implications? GDPR being the… You probably know better than me. The rules governing the use of the privacy of emails in the EU. When it’s someone giving a third party, someone else’s email, how does that work?

Jay Gibb:
Yeah. So, there’s controversy there, right? There’s definitely a debate with regard to how GDPR should impact a company’s referral strategy. On the extreme, conservative end of the spectrum, there are people that think that GDPR completely obliterated any possibility of having a referral program in Europe, or with European customers, right? And that’s a super, super conservative angle to it, where they just believe that under no circumstances, should you ever allow a person to type in their friend’s email address into your website, period.

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
On the other end of the spectrum, is the people that don’t care, right? I’m personally, somewhere in the middle. And what I see our customers, our European customers, or customers that have European audiences doing, is basically just, they’re behaving like a email provider in these situations.
So, let me explain what I mean. If the email address that you’re being given by a person, it’s not their own, so they’re not the data subject, the data subject is the person who controls the email address. So, let’s say, I give your email address to an e-Commerce store-

Trevor Ginn:
Yeah.

Jay Gibb:
Because, I want to send you a referral, e-Commerce store software should do what I’m asking it to do. I’m asking you to send my friend, Trevor, an email with my referral code in it-

Trevor Ginn:
Yeah.

Jay Gibb:
Right? And that’s all. The place where people get confused, I think, or where they cross the line, is they remind Trevor about this email, right? In other words, in order to send a reminder, what that implies is that you’ve got some profile for Trevor in your database and you’re sending reminders and you’ve recorded this other person’s email address in your system-

Trevor Ginn:
Yeah.

Jay Gibb:
Which you shouldn’t do. That’s against GDPR and it’s frankly, against just, the golden rule, right? You just shouldn’t do it. Do what I asked you to do, take Trevor’s email address and send him the email that I asked you to send him, like a transactional email. And then, obliterate all memory of Trevor. Don’t make him a ghost profile. Don’t send- .

Trevor Ginn:
But, anyone would never want to forget me. No- . Depend on- .

Jay Gibb:
They really could forget.

Trevor Ginn:
So, with your system, right? So, imagine I’ve got a referral scheme. If I go in and I log in using my email address, would that be as if the email is coming from me, because I’ve logged in, or authenticated my Google account? Or, would it be effectively coming from my email address? Or, would it be coming from the e-Comm store?

Jay Gibb:
Both, either, whichever one you want, right? We can do whatever. We don’t send the emails ourselves, we’re just the address book interface.

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
And so, remember the use case that I described, where somebody selects their contacts from the Contact Picker, and then they submit it. After they submit it, we have a plethora of options, all options, right? Anything you want. You can have that go directly into a form field on your website. You can have that launch a mail-to link, or launch a email client, so that your customer sends the email themselves. You can have it trigger a web hook, or a Zap in Zapier, all different things can happen, depending on the way that you want it configured and your own GDPR sensitivity, for example. Or-

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
What stack you have, for the way that you send your emails. So, there’s a lot of different ways to do it. And we don’t really prescribe one of them. It’s our job to make them all available and to support our customers for whichever one they want to use. But, we don’t prescribe one specific way of sending those emails, since we’re not the ones that are actually sending them.

Trevor Ginn:
Okay. So, your approach to doing forms. Are there other e-Commerce use cases where this comes in handy?

Jay Gibb:
Yeah, we’ve seen them. So, the referral program field that I described is the most popular one, right? Also, most e-Commerce stores have that useless envelope icon on the product page-

Trevor Ginn:
Yeah.

Jay Gibb:
You’ve seen that?

Trevor Ginn:
Or, email me.

Jay Gibb:
Yeah. It’s like, you see, you’ve got a whole bunch of products and every single product page has the little panel for, “Tweet this,” and Facebook-

Trevor Ginn:
Which, I’m not sure anyone uses, but yeah.

Jay Gibb:
Nobody uses it, right? So, one of the places that we can help, is basically making it so that envelope icon performs better. So, when somebody-

Trevor Ginn:
Yeah.

Jay Gibb:
Clicks, rather than just kicking them out to a mail-to link, we can make it launch the Contact Picker and give them a better experience before the mail-to link. So, we’ve got some integration techniques for that. Another one, is the wishlists.

Trevor Ginn:
Yeah, yeah.

Jay Gibb:
So, a lot of times, e-Commerce stores will have a way for one of their customers to assemble a shopping cart, a wishlist shopping cart of things they want. And then, share the wishlist with their friends and families, so that they can get what they want for Christmas, or whatever. So, that sharing interface often will have the Contact Picker, which is very similar to a gift registry.

The difference between a wishlist and a gift registry, in my mind, is that a gift registry usually has a lot more recipients. A wishlist, you might just send to your mom, or your wife, or whatever. But, a gift registry, you’re going to want to assemble a list of 100 people for your party, or for your wedding, or whatever, right? And so, in those cases, an address book becomes exponentially more useful, right? So, there’s those four places. I guess, the last one, is probably the same thing as a referral program, but a one-sided referral program, which would be a coupon, right? Where we’ll see a lot of… In particular, WooCommerce store owners, there’s a plugin for WooCommerce that does coupons.

Trevor Ginn:
Mmm-hmm.

Jay Gibb:
I think, it has this sharing interface to send coupons to people in your address book, or your friends. And so, that’s another place that I think, is worth exploring for anybody, who doesn’t already have something like that.

Trevor Ginn:
Okay. This has been very interesting. It’s one of those things I’d never really thought about. And now, I can see the use of it. It is one of those little things that, “Gosh, yeah, that does make sense. I get that now.”

Jay Gibb:
I’m doing my job.

Trevor Ginn:
You’re doing your job? Right, okay. One final question.

Jay Gibb:
Sure.

Trevor Ginn:
Have you got any tips for us? What’s inspired you recently? Good books, films, holidays?

Jay Gibb:
Man. So, you said that you’re pushing 50, which is true for me as well, I’m past the hump there. And three weeks ago, deep into my 40s, I took the time for the… You’re in the UK, right?

Trevor Ginn:
Yeah.

Jay Gibb:
You guys have the equivalent of the boy Scouts with the Cub Scouts over there?

Trevor Ginn:
No, I’m a scout leader, indeed.

Jay Gibb:
Okay. Yeah. So, so am I. My kids are small. So, I’m a scout leader for the elementary school age-

Trevor Ginn:
Yes.

Jay Gibb:
And so, a few weeks ago, I actually, for the first time in my life studied tying knots, learned some really useful knots that I… And now, I believe that every adult should do that. It took me two, or three hours to learn some knots that are now… I’m like, “I feel so much more useful.”

Trevor Ginn:
Can you tie one-handed bow line?

Jay Gibb:
I sure can, yeah.

Trevor Ginn:
Oh, excellent. That’s a good…

Jay Gibb:
Yeah, yeah.

Trevor Ginn:
That’s my party trick.

Jay Gibb:
Yeah. I did the bow line and the truckers hitch and the top line hitch. And the – .

Trevor Ginn:
Handcuff hitch, can you do a handcuff hitch?

Jay Gibb:
I don’t know that one. Maybe-

Trevor Ginn:
That’s very easy. You can look it up.

Jay Gibb:
Yeah.

Trevor Ginn:
That’s-

Jay Gibb:
So, I just love that. I mean, I know it seems so strange, but not only that, but we went on a camp out and I… The reason why I was studying it, was because I volunteered to do a little clinic for the kids, right? And there was a shocking number of adults, the parents of the kids who were there, that were super into it, loved it and wanted to come and hang out and say, “Hey, help me with that bow line, or whatever.” But, one guy was super fascinated by the trucker’s hitch and really wanted me to show him how to do a trucker’s hitch. Because, he couldn’t believe that it was possible, right? So, for whatever it’s worth, that’s- .

Trevor Ginn:
That’s a bit of a hard one. I like that, I like that. Jay, it’s been great talking to you. And thanks so much for sharing your expertise.

Jay Gibb:
Yeah, thanks for having me, it’s been a good chat.

Trevor Ginn:
Okay, bye…