Actionable Tips for a Highly Effective Referral Program

Links:

• Website: Doe
• Jason's Twitter

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Raphael Paulin-Daigle:
Welcome to the Minds of Ecommerce podcast, where you'll learn one key strategy that made leading ecommerce companies grow exponentially. We cut the bullshit and keep the meat. In a 15 to 20 minutes episode, founders and executives take us through a deep dive of a strategy so you get to learn and grow your online sales. In the last episode, I spoke to Josh Snow of oral care brand Snow. And today on episode number 21 get ready. Jason Wong is the founder and CEO of Doe, an eyelash brand that grew to over 15 million in one year only. I'm your host, Raphael, Paul and Dagle. And I'm the founder of Splitbase, a conversion optimization and landing page agency for direct to consumer e commerce brands.

Raphael Paulin-Daigle:
This is minds of e commerce. All right, Jason, welcome to the show. Thanks so much for being here.

Jason Wong:
Thanks for having me.

Raphael Paulin-Daigle:
Yeah. So I've known you for probably a year now, and it's funny because the first time we chatted, you were just starting the brand, and now we look at approximately a year later, and the brand has achieved totally new heights, and it's pretty impressive just to give our listeners a little bit more context. So tell us more. What type of growth have you experienced in the past year? Where did you start? Where are you now?

Jason Wong:
The starting point, I think, is something that's very relatable for most people. I started this brand with about $500. So about the cost of your rent, or a fraction of it, and grew it. The first year, we grew about 900%. 2nd year we grew or this year. Now, we were on track to grow about 300%. And today we sold I think last time we counted 300,000 pairs of eyelashes, which is a pretty crazy number to think about, starting from $500. So it's definitely been a really interesting journey bootstrapping this brand.

Jason Wong:
The whole idea of this brand in the beginning was wanting to see what I can do with $500. It wasn't because it was the only money I had. I wanted to prove out that I could do it with $500. So being able to see this company grow from what little I had was something that was very satisfying.

Raphael Paulin-Daigle:
I love it. I love it. Obviously, for you guys to grow that much in the span of a year or so, it means that you've also done a lot of things right and probably some things wrong as well that you've been able to learn from quickly and then kind of iterate on that. So I know you guys are big on TikTok. You're also big on social with influencers on Instagram, Snapchat. I know you're also putting a lot of effort into SMS and email. But one of the biggest growth strategies that you guys have been focusing on would be your referral program. Is that right?

Jason Wong:
Yeah, something that I feel like isn't talked about too much. Referral program, in a nutshell, it's basically trying to squeeze more out of each customer that you acquire. Trying to get one customer to refer another customer is really the whole concept behind it. I just feel like it's such an underrated tactic to acquire customer. Everyone's talking about TikTok about Facebook and yeah, they're great, but the CPAs are just so high that you need to get more out of everyone that you acquire. So that's why I am going full force into the referral programs.

Raphael Paulin-Daigle:
I love it. So tell us more just so people have an idea of what it looks like. So what does that program look like? What happens when in the purchase cycle? Tell us more about that.

Jason Wong:
Yeah, so the referral program is powered by a tool called Smile, smile Rewards. We love Smile because of the UX UI is beautiful first and foremost and it's very easy to use. And essentially what we use Smile for is a pre and post purchase experience. Pre purchase, we have a pop up that asks the customer or visitor to create an account in order to earn points. Whether or not there are a customer of ours, they will be allowed to create an account and start earning points and take action to earn those points. Some of those actions may be signing up, entering their birth dates, I think posting on social media. And the other one is referring to friends. So we have this offer called get a free pair of lashes.

Jason Wong:
A full size one, not sample size one that a lot of people give. And give your friend $10 to spend on their next order. So you can kind of see where I'm going with this, right? If someone comes to our site and they don't make a purchase, they are still allowed the ability to create an account and let their friends get $10 off their account and they get free pair of lashes. So what do we lose out on this? Well, not really because we're paying 25 $30 to Facebook. That's a lot of money on this referral program. A full size pair of lashes costs a customer 1250 and costs us to give their friend $10 in store credit. But if you really look at the economics of it, we're really paying about, what, two $3 for giving up that free pair of lashes. And we're giving about same amount for giving their friends $10 in store credit.

Jason Wong:
We're not giving cash directly to their bank account or give them money to spend at our store. So if you compare this to a $3 CPA on this front and a $25 CPA on Facebook's front, this makes a lot of sense to double down on, right? And the beauty of this is that this works for people even if they aren't customers of ours. If they come to our site and they're like, I don't know if I can afford this. Well, if your friend could you get a free pair of lashes. That's the beauty of a referral program.

Raphael Paulin-Daigle:
That's phenomenal. I think this is the first time that I've heard someone actually say hey yeah, we've built the referral program that 100% works for people who aren't even our customers. Generally people think of like all loyalty points but all of that obviously happens after the purchase, after someone's made a purchase. But here you're really making it available to all and I think that's pretty amazing. So in terms of referral programs, obviously you've been very successful at it, but why would you say your program has been more successful than maybe other programs that brands have attempted? Because it's pretty rare that I hear a brand say hey, one of our biggest growth engine is the referral program. It's sometimes just part of their marketing stack but it's not as core of a strategy than yours. Do you think it's because of that because you've made it available to everyone or is there more into it?

Jason Wong:
There's more into it. I think it's the fact that we try to be everywhere with our referral program. For a lot of brands, the referral program and their loyalty program is somewhat of an afterdot. It's something that they put in their navigation bar that says refer a friend and the chances of someone clicking that isn't that high because they're shopping, right? It's just something that they have but it's not something that they really push. So how do we push it? We push it through every single touch point that we could have with our retention customer. The first example is our emails. We built this dynamic block within our Klavio email templates that will automatically populate the referral link, a unique referral link to that person when they receive the email. So if you have an account at doe and you receive an email from us, at the bottom of our email, it will say, get a free pair of lashes and give your friend $10.

Jason Wong:
And it will have a referral link that will automatically populate to be your referral link so that you don't have to go into Smile, you don't have to go on a website anymore to go and generate because typically the process is you have to go into a website, sign in and then go grab it. But with the clavio custom feel we're able to extract that link for you and put it right in the email so you can just copy paste and send it to your friend. We cut the process to do this by so many steps that it made it easier for people to do it. You just really have to facilitate this experience. Right. The other touch point is doing it within our SMS when we talk about our abandoned cart scenarios or even like browse abandonment or even winback scenarios, a lot of these touch points when people are not really biting we're like okay fine if you're not biting, if you know someone else who will bite, let me know. Here's a link for you to do it. And typically people are not going to turn out a free full size product that they were going to buy anyway because they know someone within their circle who are willing to buy it.

Jason Wong:
If I'm buying something and I know that my friends is also trying to buy something, I'm like, hey Raphael, would you like to get $10 off your order? They're like, Heck yeah, I was going to buy it anyways. If they buy it, I get free full size product. It makes total sense, right? And that's really why this referral program works, is because we're everywhere with it. We know that if we can't get them on the first try, they will bite on a second try. If not, it's on a third try. So you're doing all these abandoned cart sequences that if they don't work, you have a second option for them. Whereas for most brands, if they don't bite on the abandoned cart sequences, they just leave. Right? So we have a backup.

Raphael Paulin-Daigle:
That's so smart. I love it. I think one of the main takeaways here is obviously it's not just about having a great referral program. It's about making it so simple and accessible to everyone all the freaking time, right? And I love that. So now obviously this all sounds great, but what have been some of the obstacles or challenges that maybe you faced when it comes to implementing such a program? Has there been any, I don't want to say failures, but maybe challenges when it comes to doing this?

Jason Wong:
Challenges, I would say the experience is definitely one week. For the longest time, we didn't have the whole referral program in our emails. We were one of those friends who just had it and think people would do it. And then we started wondering, why is no one using this? And I went through the process from a lens of a consumer and I'm like, this is too many steps. I think the challenge has always been designing all our marketing efforts to be aligned with a comfortable shopping experience. And oftentimes from a marketer perspective, it's hard for us to visualize that because we're so ingrained with how things work in our eyes and how we would do it that we never really realize how consumers would do it. Right? And so I think just trying to step back and look at everything that we do in the eyes of a normal consumer, someone who might not even be tech savvy. Like, if you ask them to go on their website, log into their account and go find the panel from Smile that will show their link, that's seven steps.

Jason Wong:
And that's seven steps too much for someone who's not tech savvy. So really just taking the step back and understanding the customer journey and retracing it and figuring out how to do it is really what we had to do but the challenge was recognizing that I don't want to get into the complexity of technology challenges or operation challenges. The first challenges that most operators will face is the fact that we stop thinking like a consumer. Totally agree, right?

Raphael Paulin-Daigle:
So what about the offer? The offer itself, a free pair of lashes. That's awesome. But is that something you tested a lot or you just said, hey, let's just give the best damn thing we can offer our customers? And then that's what it was.

Jason Wong:
Oh, no. We started smaller. I think our first offer was like, gift five, get five. So gift $5, get $5. And we try other products within our line, like accessories, because our fear was we didn't want to devalue our product too much by giving it away for free. So we're like, oh, what if we give them an accessory like a hat or like a tweezer? Things are like a dollar $2 and people just weren't biting. So we thought about, let's just full send it because you start thinking about how much you're paying to Facebook, and it just makes total sense. As a business, our margins are between 70% to 80%.

Jason Wong:
So you put that into your perspective of offering your full size product, you're only realistically losing 20 30% compared to losing a flat, hard earned cash of $30 out of your bank account to pay to mark second. It's a big difference. So scaling up to that offer initially was a little bit uneasy. But when you put into your perspective of how much money you're paying already, acquiring a new user by giving away a free pair of lashes was a no brainer.

Raphael Paulin-Daigle:
Amazing. So if a listener here, they've got a brand probably doing a couple of million dollars, they haven't really delved into referral programs too much. But after hearing this, they're like, hey, we got to try this. What would be your top three or so pieces of advice for someone who's looking to implement a referral program within their brand?

Jason Wong:
Yeah, so referral program, let's brown it to a loyalty program because referral program is just really one small part of it. I think a good reward program is very clear in the offer that you're giving and has to be gamified. The tiers that we do is typically three tiers that people get when they earn points. You want to have the lowest tier to be where the majority of the people is. So that is about like 800 points in our smile program. That's like 65%. 65%, and then 25%. And then you want to do the remaining in the highest tier where it's very hard to get.

Jason Wong:
But when you gamify it, you make the first couple of levels easy to get to, which makes them motivate to get to the third level. And we saw that after we implemented a tier program, a tier system within our loyalty program, people are starting to work a lot harder to get those points that they're referring to friends. They're leaving reviews, they're putting in their social media, they're following us on social. That was the change that we saw once we put a tier program. Typically the programs by default is just a single program. You get points and everyone gets the same thing. But when we made a tier program, it says this tier gets five points per dollar spent, but this tier gets seven points per dollar spent, and you get 20% off. And in the last tier, you get nine points per dollar spent.

Jason Wong:
You get 25% off, you get a free pair of lashes, and you get free shipping. For the loyal customers of yours, they see the value of getting to that tier because they know that in the long term, they will get the value out from it. So this also has to be valuable for your end customer, right? It's not a one way street. So tier system is number one. Number two, referral program. Just be omnipresent. Like be everyone. Put it in your link in Bio, put it in your navigation bar, put in your footer, put in your email, be everywhere and make it accessible for people.

Jason Wong:
You will be surprised at how many people miss the fact that you have a loyalty program just because you think you have it in the navigation bar. It doesn't tell everything. And then I would say the third one is give it a really good program name. We call it the Doughbox and we call it the Deer Park for our program, it's memorable and it feels like it's a community for Starbucks. You know, they have like the Starbucks stars. Makes total sense for the brand. So make sure that it's memorable that people can refer back to because they will most likely be signed up to multiple programs and you want your program to stick out. So we put a lot of emphasis in our design to make sure it's appealing, first and foremost.

Jason Wong:
And second of all, memorable. If you're focusing on building a brand, you want to make sure that your brand elements are unified across everything, even your referral program. Like I said, a lot of people think of the referral program as a byproduct of their marketing efforts or it's kind of like an afterthought. But really you want to make sure to have a very cohesive theme across the board because design, as much as people think that it's just pretty things and whatnot it's that one thing that sticks out when you're trying to compete for everyone's attention.

Raphael Paulin-Daigle:
Awesome. Jason, this is phenomenal. I mean, I'm just thinking of the past 1015 minutes or so of our discussion and I'm like, damn. I think that's the most I've learned on referral programs in my, like, six years of doing e commerce. So I'm really loving this. Now, my last question to you. Let's say we just kind of zoom out from the referral and reward programs. And let's say you were to start dough all over again, what would you do differently?

Jason Wong:
I would hire a lot earlier. I think my mistake was trying to do everything at once. A lot of fathers get stuck in this loop where it's hard for them to let go. So building my systems earlier, delegating it, and hiring the right people for the right role would probably be like the first thing I would do. Hire slow. Fire fast is also another principle that I felt like I should have done, because one really bad Apple can really ruin the whole bunch. And that was something that I didn't realize until it was too late. Unfortunately.

Jason Wong:
It was a very big learning lesson. Obviously, everyone got to us where we are at, but I felt like we could have gone a lot further if I made better decisions on who to hire and who to bring together and who to let go.

Raphael Paulin-Daigle:
Awesome. Great piece of advice. And I think it's something that every entrepreneur with a team have gone through, and it's a lesson that I think everybody kind of has to learn for themselves. You really never know how it feels to go through that until you actually go through it and you look back. Right, jason, thank you so much. That was a phenomenal chat. And now if people want to learn more about you, about doe, about other things you're doing, where should they go?

Jason Wong:
I am present on Twitter at Agroly Eggroli, and I am starting my own e commerce show in January. So love for you guys to check it out. When the time comes, raphael would love to talk to you. You're one of the people I really respect in the space, and I just want to have a quick show to interview really cool people. So love to have you on there.

Raphael Paulin-Daigle:
Awesome. Fantastic. I'll be super happy to join. Jason, have an awesome day. Thanks so much.

Jason Wong:
Thank you. Bye bye.

Raphael Paulin-Daigle:
All right, that's it for today's episode. And in the next episode, you'll hear from Chris Mead, who's one of the co founders of CrossNet. He literally invented a sport and grew CrossNet pretty quickly. Over the last couple of years, we had a really interesting chat on how he's grown his D two C brand, primarily using freelancers. So lots of actionable tips and great resources that he's going to be sharing in how you can do the same. So make sure you don't miss any of the new episodes. Subscribe to the podcast, and if you've liked what you've heard, make sure to leave a review in the itunes Store. That would really mean the world to me.

Raphael Paulin-Daigle:
Now, if you are working on a DTC brand that does over a million dollars in online sales, go check out Splitbase.com to learn more as to how we might be able to help you with landing pages and full site optimization to improve the effectiveness of your marketing. Now, if you have any guest requests, questions or comments, tweet me at @rpaulindaigle and be super happy to hear from you. Thanks again for listening. This is minds of ecommerce.

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