#158: Low-Cost Marketing Hacks: Making Word of Mouth Work for Your Business

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Claus Lauter: Hello and welcome to another episode of the E-Commerce Coffee Break. Today we wanna revisit a topic that we haven't had for a while. We wanna talk about work of mouth marketing. Now. This is a very important marketing strategy for your shop and properly one of the best marketing. Strategies you can have in your store because you get high quality traffic, high quality customers with that.

So [00:02:00] with me on the show today, I've Raúl Galera, he's the partnership of Business Development Lead at Referral Candy, an app that helps online and offline businesses acquire new customers and retain existing one through incentive referrals. Joined the company in 2016 and built a partnership program that adds value to marketing, agency affiliates, media audits, and other tech companies in the e-commerce industry.

Referral Candy is a leading platform in referral marketing, as we said, and helping over 30,000 e-commerce brands leveraging word of mouse marketing. So definitely the right person to talk to. That's what come wrong to the show. Hi Raúl. How are you today?

Raúl Galera: Good. Thanks for having me.

Claus Lauter: Bit of an idea for our listeners who do not know what world of world of mouse marketing is, what can they imagine under that?

Raúl Galera: Word of mouth marketing, one of those things that, , it happens , so many times during our, daily lives that we just kind of forget that it's there. , word of mouth itself, it's the oldest way of communication that it has existed.

, that's how, , we humans have. Transmitted information over the centuries, and now it's part of , our daily lives, even though we have other ways , of [00:03:00] communication and, transferring information. What we're doing every time we tell a friend about, , a restaurant that we have just visited, a country that we have, just traveled to, or, vacation destination or Netflix show, an online brand or something that we just bought online.

That happens organically. It's just part of our human nature of sharing our experiences. And word of mouth marketing is essentially any marketing activity that you put together to. Generate even more word of mouth, , around , the organic word of mouth that your brand is already getting.

, it's extremely valuable because it's coming from probably the number one trusted source that we have, which are the closest people that we have, like our friends and family and, and coworkers. When we get a recommendation from them, it's not coming from an ad. It's definitely not coming from.

It's not coming from, some unknown person in on the internet telling us , to buy a product. Someone that we actually trust, that we know, that their motivation for them to tell us that we were gonna like certain product it's based on. value that that [00:04:00] product's gonna provide to us.

They, they actually believe in what that recommendation it's going to generate to us. So yeah, overall, I think it's probably the most trusted source of, , advertisement that you can possibly have as an e-commerce store owner.

Claus Lauter: Okay. Now, as a merchant, as a brand, I want to have my customers talking about my brand.

So that's a different level. If I talk to my friends and they talk about me, that's one level, but in a professional environment, then it'd be some kind of strategies behind that to get them going and start getting the word out. So how can you do this?

Raúl Galera: Well, there's several things that , you can do.

There are products that are by nature going to be more shareable than others. , just because , either the, the product itself, like if you have a product that it's extremely, , visual or extremely innovating, , it's gonna be very easy to, share. , for example, we have a merchant and we actually wrote a case study about, it's called Atmo. They're basically screens, but they make it look, like a window essentially. You can put it in your room and then it just kind of resembles the window and you can kind of change the background.

It's so real, looks so real that the product itself, it's so [00:05:00] easy to share, right? And so that the referral program has done extremely well, just. It's very easy to show the value when you bring a friend over to your house and they see it. They're like, oh my God. Where do you get that?

And, the referral just happens, , automatically. So either the product, it's like extremely shareable or, , the product can also be something that we use in our daily lives. Like we, we have one of the, the most successful referral programs that we've seen, , it's a company that's selling cleaning supplies and.

the product itself is innovative. It's a super crowded market. , there's tons of brand and like huge corporations fighting in that market. But it's something that we use so regularly that at the end of the day, you're probably gonna talk about it, you're probably gonna think about it whenever, a topic comes out , in a conversation.

The product can be easy to share or either the nature of it or kind of like how often you use it. But at the same time, it's who is your audience? Are, are you selling a product to a specific niche of customers that even if they don't know each other, they're going to hang out in the same kind of communities?

, and it's not something that's going to, just grow naturally. And I'll give you a really good example. Brands [00:06:00] that sell baby products, they tend to have some sort of community behind them because there's tons of parenting communities online, , and in real life that these parents may not know each other personally, but they're always sharing experiences or trying to learn from each other.

So those recommendations, Come from trusted sources, even if you don't know the actual person that's giving you , the recommendation, but do you understand that they're in the same situation as you are? We've seen that also in the, kinda like the crypto community. They're super active, , communities, whether it's on Facebook groups or Slack communities.

or telegram, , products that are in that industry, they tend to get shared, you know, quite often. , having , a shareable brand or shareable product, having, a niche community and then obviously it's just a matter of, , doing promotion outside of that. So letting your customers know that the referral program is something that they can, they can benefit from.

Recently, something that we've seen that works really well from brands, , as well is to kind of leverage influencers in that kind of way. Cause so in influencers, , are a halfway between somebody that you know personally, not really, but somebody that you're kinda like used to seeing online and somebody that has a reputation.

So if you [00:07:00] are, let's say if you're into surfing and you follow somebody that's like, , an expert on, surfing and on Instagram, whenever they share a product or whenever they recommend a product, you're gonna listen to it because, That person, it's famous because they're really good at something. So you take that, , recommendation at at value because, because of, who's coming from.

Those are kinda like three main ways that the brands can start leveraging, , word of mouth. It all starts , with your product and kind of how you're presenting yourself in front of your audience. Okay,

Claus Lauter: so you need to have the right story, the right communication, promoting the benefits, and so on and so forth.

And now probably I think you start with your best customers and you start with influencers that are close to your brand Seems to be quite complicated because that's something that you can grow very, very quickly. There's a huge market for influencers out there. There's a huge market there to get the word out to your former customers and understand you have some apps that support that and make this whole process easier.

So tell me a little bit about how do you bring word of mouse in a practical manner into your.

Raúl Galera: We have two main products , they're both focused , on [00:08:00] word of mouth, so one of all referral candies. It's kinda like our flagship, product. And it's what we've been doing for, over 10 years.

What we do there is to automate , our referral program. So we invite customers to join a referral program. Each customer gets a unique referral link and they can, they can start sharing , with their friends. And once the friend makes a purchase, they automatically get invited to join the program again.

It's kinda like a cycle that feeds itself. Every new customer joins the program and then the network just becomes wider because now, You as a brand will have access to that. New customer's, friends, and then their friends. And their friends., it's got, , compounding efforts basically. That's kinda like the easiest way , to get started I always say that if you have a good product, if you have, , good reviews, if you have a good purchase experience, your customers are essentially happy and they're coming back, , you're probably getting referrals.

And so this is a very easy way to get them to refer even more. It's essentially automating a process that's happening. , organically and adding incentives, which is always going to increase conversion rates. When you add incentives, more customers will remember your brand. , during a conversation [00:09:00] with their friends.

More of them will be incentivized , to talk to their friends and family about it. And also, if the friend has an incentive to buy for the first time, then it's even more likely that they're going to make that first purchase, that's what we want. We want to acquire customers.

We want to retain our existing ones as well, which you can do it because if you give your customers. A discount for every friend They. Now they'll have an incentive to come back to your store and buy again. But, kinda have both sides of the deal acquire new customers from retaining the existing ones.

Then the other product that we have is influencer candy. What we're doing there, it's, we're incentivized in word of mouth by working with, , influencers. It's. Basically program in which we get in touch with specific influencers that are targeting the right audience for your brand.

Service that we've generated there is the fact that you're able to work with those influencers , on a performance basis. Most influencers, Just get paid up upfront and then they generate the content and then that's it.

If it converts, great, if it doesn't, then too bad. , but the way that we work with those influencers is that we, basically make everyone have skin in the game. So both influencer candy ourselves, the brand and [00:10:00] the influencer. The main goal is to generate sales for the store, because if the store generates sales, the influencer gets a commission.

And that's also when influencer candy, , gets paid so the whole idea is that everyone's, happy there. So, commission only influencer programs work , with certain type of influencers. , Some of the biggest guys out there are probably not going to, be interested in a program like that.

But there's a ton of kinda like smaller skill in, , influencers that are extremely engaged with their audiences and they can honestly, in a lot of cases, they can have even better results , than the big fish.

[00:11:00]

[00:12:00]

Claus Lauter: ,

Okay, gimme some example. You gave this very good example of this company, , selling cleaning products, which I would never have thought that this is a candidate for World of Mars, working with more than 30,000 different brands.

Give me another example of somebody who has done it really, really well.

Raúl Galera: We have examples , from virtually any industry. Another example that I always love bringing up because they're in a very competitive industry. We have a, customer in the US called a box of stories.

They sell books, there's this really big company called Amazon that's also selling books. , they have to compete with that guy in that, particular sector. , Their product. It's very interesting because what they do is that every month they send you, , a box with four books that you've probably never heard of before.

It's basically getting a treat every single month. You get four books that, , they're probably going to like, , and so with a surprise, you know, figuring out what, what's gonna be in the mail, , and the way that they've managed . To kind of create that word of mouth around their brand, , is that they created a book club.

, so they have a referral program, obviously, and their customers, they're a subscription. So that means that they are [00:13:00] probably the most engaged type of customers that you can possibly have. They're getting new books, , all the time. And so, If their friends are also readers, , it's probably gonna come up in conversations what's , the latest book that they're reading and how they got it and all that.

But on top of that, , they also have a, book club , on Facebook. It's , basically a Facebook group. And even though it's hosted by them, they're not necessarily doing promotion in that book club. , it's more about creating a community , or a space for their customers and their readers to kinda.

What they're up to and like get, new book recommendations or like discuss, what was , the latest box and what they thought about it. , it's a mix once again of a product that can be, commoditized , as books. , but they managed to add kinda like an, an innovative angle and also at the same time create a very niche community around it.

I thought that was a genius, , strategy and it's worked out pretty well for.

Claus Lauter: That's a great story and it, shows you that even if you're selling a commodity, , it doesn't stop you from creating a word of mouse campaign there. And I think with the two solutions you have as referral candy and influencer candy, they can also go hand in hand [00:14:00] because somebody who might be a referral client of yours might become an influencer in the other way around.

So I think there's , a very nice synergy in that. Now when it comes to, , Giving it advantage or a benefit of be becoming a referral, , client. What kind of, , bonuses work you with? Is that discounts? Is there any other things that merchants use to motivate people?

Raúl Galera: merchants are running referral programs and merchants that are running, , influencer programs , on influencer can, so on referral programs.

The most common type of rewards that we see are coupon codes and cash, if you're selling a product that your customers can buy on a regular basis, then offer them coupon codes because they'll be incentivized. The coupon code's going to incentivize them to refer their friends. The friends also gonna get a discount on their first purchase, so it's gonna increase conversions, but at the same time, by acquiring that coupon code, , in exchange for referring a friend, now they have another incentive, which is to go back to your store and buy again from you.

If they were already, excited about your brand, now they have even one more reason , to not to look at a competitor. Now they have a discount that not many people have and, [00:15:00] and it's going to be different from , what's available for them. , we always tell brands, If you wanna have, interesting referral program for your customers, do you need to offer a discount that it's not available anywhere else on the site?

, it's 2023. We all know that you can get a 10% discount if you join a newsletter. So offering a 10% discount, it's not special. Anything above that 15, 20%, anything, obviously anything that your margins can, , afford you to, provide. But if you're offering anything over, 15, 20%, that's when it really, gets really interesting, , for brands.

On the other hand, brands that are, offering products that their customers are not gonna buy. Again, anytime soon. , we typically recommend them to offer cash. I always give the same example, which is, , companies that are selling mattresses. So obviously unless you're selling, accessories, , like, , bedding sheets, whatever.

, your customers are not gonna buy , another mattress anytime soon. So give 'em a cash reward. They'll be happy to spend that , on a dinner if they get 50 bucks for every friend that buys , a mattress through their referral link. Then we have a, third option, , for companies that don't wanna give cash or don't wanna give discounts, which is what we [00:16:00] call the customer reward.

That means that you can give pretty much anything. So you can give a free product or you can give , a gift card, you know, anything along those lines. , we typically see that most customers fall into one of the kind of first two categories. For the influencers it's pretty straightforward.

influencers , are trying to monetize their content. , and so if they can get a commiss. For every customer that they generate, for every sale they generate, , that's going to be , a win-win situation. , the good thing also about influencers their audience is very engaged with their content.

The beauty of it, in my opinion is that this influencers are only gonna post. About products they actually believe in. So even if there's a commission, they know that the repetition is on the line on every single post they generate. And so they want that.

They're only going to post products that they've received, they've used, and they say, okay, I can definitely talk about this. And also they're gonna use their own experience, , to sell the product . To their audience because they know that that's what their audience and future customers are expecting.

They're not expecting , a sales pitch and they know that their audience , can spot a sales pitch, , a mile [00:17:00] away. . They're trying to avoid that. It just becomes kinda like a very natural recommendation, even if you don't know the person naturally, but their face is in your phone, you know, multiple hours a, a week.

By that point it just becomes a familiar phase. Okay.

Claus Lauter: When you start implementing, and I think it's a two step process. So you will start with implementing your referral program. Referral can be, what are the process steps, what do you need to do to get it up? And.

Raúl Galera: So the first thing you need to do is set up, set up your rewards.

Well, first of all, you need to integrate it with your store. , so if you're on Shopify, or Big Commerce Woo Commerce, you can just install it from, , the respective , app or. Plugin store. So if you're in the Shopify, , app store, you just install or full candy app, and then , you're good to go.

, and then the first step is to set up your rewards. So kind of like what I was just mentioning about the coupons, the cash or the customer reward, that's the first thing you need to figure out. You can always change that later. , but that's kinda like the first step that you should go over. . And then after that , it's all about creating the assets that you're going to use to promote your referral program.

So there's a bunch of post-purchase emails, reminder emails, , notification [00:18:00] emails, you know, to let customers know about , their upcoming rewards, things like that. and then after that, it can get a little bit more complicated if you want to, because , we basically give you all the templates pretty much ready to go.

Like, all you need to do is upload, , a log on a banner, select your primary font, and in primary color, and then we just apply those settings to all the pieces of content. , You can essentially have your referral program up and running within 15 minutes. , but if you want, you can fully customize all of these assets.

You can also integrate with Clavio if you're using Clavio for email marketing, and you can, you know, replicate some of those kind of post-purchase flows into Clavio. There's a lot of stuff that you can do. , but you just wanna get something up and running quickly. Or if you don't have, uh, designer or developer in-house, you can use, our templates.

, and then after that, it's just really a matter of making sure that new customers are getting invited to join , the referral program. So you can do it with the post-purchase email or with the post-purchase popup. , invite past customers to join the program because, Crucial in my opinion, because by the time you launch a referral program, you probably have thousands of clients have bought from you in the past [00:19:00] that are probably never going to hear about, , your referral program until they buy again.

So if you can send them an email to let 'em know about the program, that's something you can do within referral candy as well. That's gonna increase conversion rates a lot easier because the more customer program, the more referrals are gonna happen, the more purchases. , , and then after that, it's just a matter of keeping an eye out for, , monitor referral programs. See , how much revenue you're generating, what's the percentage , of revenue that's coming from referrals. , and then see if you need to take any actions you can. Maybe for Black Friday or for kinda like off season for your brand.

You can increase the rewards for your referral program to kinda like incentivize people , to make purchases at a time. They're usually not used to. , there's a lot of things you can do, but, , I typically recommend to kind of play with the rewards every once in a while. So there's always an additional incentive for customers to,

Claus Lauter: to refer.

Okay, makes perfect sense. I think word of Mouse marketing is a marketing channel and you should treat it as a marketing channel. It should do your marketing activities, as you said, some specials for Easter or for Christmas or whatsoever, and just to keep it going and keep it interesting for your partners [00:20:00] on board.

Now, when it comes to the other part of Influencer how do you implement this in your.

Raúl Galera: The first thing that we do is that , we start reaching out to influencers that are within your particular niche. So we get in touch with them. By now we have, a lot of influencers in that we already have relationships with, so we can kind of like tap into them directly, but if.

Then we can , find the right audience for your brand and then reach out to those, influencers specifically. , once we engage with them, we send them a product so they can, actually use it, they can feel it, they can, , see how it works, and then they kind of like generate, , their own opinion, , about the product.

Typically the majority of them, , will be happy with the product if received, and then , they'll talk about it. , we'll give each one of those influencers a referral link, , with an offer, obviously for their audience. And so they'll incentivize purchases through that link.

That's our bread and butter is track referral, , purchases. So we'll be able to see. Excuse me, all the, the purchases that come from that referral link. And so we can track revenue, , we can track what's the commission like , for influencers.

Influencers [00:21:00] can also get kinda like an update , of what's their commission gonna look like. The influencer gets paid on referral sales and then obviously the brand only pays based on the revenue they've generated.

, it's a win win-win situation. Everybody has skin in the game, so they're all kind of hyperfocused , on the fact that the goal here is not just to generate content, it's to generate sales.

Claus Lauter: yeah, and finally it saves the merchants a lot of work because your system basically takes over , the hard part of it.

Tell me a little bit about the pricing. What's the pricing structure?

Raúl Galera: , we have the commission for the influencer, and then we also have, , the Influencer candy Commission.

So that's something that it's kind of, , negotiated with, , each brand, depending on their margins. Brands are a little bit different. , for referral candy, it's, , more standardized. So what we do is that we charge a base fee and a commission on referral sale. So our pricing for referral candy is also very much, , skin in the game, , base.

We have , two different plan and, an enterprise, , plan. But the two kind of most common plans, plans have a fixed fee, which can go from, from 59 to 2 99 a month, and a commissioner referral sale. So obvious. [00:22:00] The more you pay on the fixed fee, the lower your commission is gonna be.

So it's either $59 plus a 3.5% commission on referral sales or 2 89 and 1.5. Okay, sounds

Claus Lauter: great. Well, can people find out more about you guys?

Raúl Galera: Referral county.com if they want to learn more about, , how they can run a program on their online store and influencer candy.com if they want to get started into influencer market.

Claus Lauter: Okay. Very simple and straightforward. I will put the links in a show in notes and you just one click away. Well, thanks so much for giving us an overview. I think word of mouth is still will never go away. It's, as you said, one of the main human ways to communicate with each other and to recommend things that you just have found.

And therefore, very important marketing channel for every merchant. Thanks so much for your time. Thanks

Raúl Galera: for having me.