This week on MarTech Masters, Gabriel sits down with Josh Ho, CEO of Referral Rock, to discuss how a business can use referrals to drive business and grow customer loyalty.
Listen to the Podcast version of this episode:
Highlights
- More About Josh Ho and Referral Rock (1:25)
- How Companies Are Using Referral Programs (2:53)
- How to Use Incentive Structures in Referral Programs (7:07)
- How Referral Programs Can Help in a Time of Crisis (9:00)
- How Does Referral Rock Help Companies? (11:06)
- Referral Rock’s CRM Integrations (14:08)
- How Referral Programs Can Lead to Success (15:44)
- What to Know Before Implementing a Referral Program (18:03)
- The Future of Referral Rock (19:37)
Mentioned Resources
Episode Transcript
Gabriel: Hello, everybody and welcome back to Martech Masters. Today we have Josh Ho from Referral Rock, he is the CEO and founder. Thank you, Josh, for being here today.
Josh: Thanks for having me, Gabe.
Gabriel: Awesome, awesome. So, today's today we're gonna talk about word-of-mouth referral.
This is very exciting, this is something that not a lot of people have figured out and I love to have you here to discuss some of these things. But, before we begin, why don't you tell people a little bit about who you are so we can start with that.
More About Josh Ho and Referral Rock (1:25)
Josh: Sure thing! So as you mentioned, I'm the founder and CEO of Referral Rock. We're referral marketing software as a service. I know your whole audience probably knows all about SAS and Martech and the Martech 5000 and or 10,000 or whatever thousand now.
So, we do have our little spot in there so you can see us if you zoom all the way in kind of in the middle next to loyalty in that area. But, yeah, I'm I have a family I'm you know two little kids so if you hear them right now one of them is doing martial arts so if you hear kind of resemblance of "hi-yah,", that's probably him in the background.
And I actively play handball. I won a national championship this past year, and I stress eat late at night so that's kinda me in a nutshell and a lot of it right now.
Gabriel: Don't we all, lately? Right? So tell us a little bit about Referral Rock, how it started and what do you solve and who do you solve it for?
Josh: Sure, so first a little more about me. I'm that I'm that friend that kind of connector that can't shut up and tell you about an awesome product or service so you know it and I found it really easy you know I'm about 5 years ago or so with Ubers and Dropbox apps and everyone had a refer-a-friend program so everyone knows what those were from those you know from the tech side.
But what I ended up realizing was like who was doing it for everyone else- anyone else that was not tech or e-commerce. And I'm sure in the agency world you know not everyone is tech and e-commerce.
As much as that floods all of the conversations and Twitter and everywhere else, there are a ton of companies that have nothing to do. It's not like sexy tech and stuff like that. So that's where our kind of original mission started:
"We wanted to help businesses run referral programs in any business not just e-commerce."
That was even like the tagline for our you know title tags and SEO and all that for a while, and it held it helped us cut through the noise, because there was plenty of e-commerce referral programs out there and everyone knew how that worked. And so yeah that's where we set out to build our own product and kind of stamp our flag in that little area, hopefully it was a bigger wedge than we were initially seeing.
How Companies Are Using Referral Programs (2:53)
Gabriel: That's cool, that's cool. So, let's look a little bit about how companies are using referral programs and referrals these days. You know, a lot of people think that you can't scale them there's like the whole notion of "yeah if you want to double down you can't double down on referrals".
And, of course, there are ways you can make a better process in your systems, you can have a better user experience, there are ways to increase referrals but there are more direct ways to do it right?
Josh: Definitely! So, yeah, I think what we discovered through our sales process and through talking with lots of people it was a great market to be in right? Like, people knew specifically what referrals were and then and even on a larger scope word-of-mouth. And then but when you got to it and you're like ‘okay’ and the easiest way to explain it was a referral program or refer-a-friend like Uber and Dropbox. And that's when the polarized reaction started right?
You get the person that knows what they are, knows how it works, and you know they came in as a customer ready to go they knew what they wanted and that was easiest-just to kind of check the feature boxes, are you the right product fit that type of thing and go. And they knew how to do it. They knew the mechanics they knew what they were doing. And then you have this other camp that people are like "oh referral programs yeah it's not gonna work for our business"—and they kind of just immediately shut off.
And it was good because it was it was great we had these ones that just shot through the pipeline went through customer success set all these things up really saw the value we were adding by having things like a member portal versus just a widget that just says share so they can come back and or a someone that joins referral program could come back they can get notifications they can see the activity and trust the system that it wasn't just a drop in the bucket my friend went and signed up and you said I was gonna get X and you never hear from them again which definitely happens.
And so that that other group what I would what we end up getting into more with them is that they're just so locked into that Uber one or that Dropbox type of thing and they feel like refer-a-friend programs they have to get at credit or a discount it only works for B2C and that type of thing. So and with any good marketing right you have to know your audience. And aligning the dip in the program or the campaign and the incentives is really key.
So, like we had a lot of B2B ones that are a really good example because you might have a user let's say it's a marketing product but that marketer using the product is using the company's budget so they don't care about a credit they don't care about getting a bonus you know set of campaigns or a bonus like email credits or anything like that. But what they care about a Starbucks card. You give that person that meant that that marketer referring their friend to another marketing product and they get a $50 Starbucks card. It's like hey what's to lose with that?
You know, I can crack into my budget there or a donation to their cause you know in this day and age that's it's causes really help pull on people's heartstrings and help people get involved. Even a t-shirt might resonate, you know, things like that they're just a really good fan of the brand and just getting a t-shirt or a little bit of swag. Hey, you know, a lot of people really really enjoy that type of thing.
Gabriel: I think that's great advice. I think that referral programs have, for some people, a bad reputation, right? And it's because they were not connecting probably the the audience to the product to whatever it is the benefit, and I love that you're saying it doesn't you need to think about your audience who are you trying to connect with and what is it what it what's in it for them to refer you to someone else, right?
And that happens that could be applied to leaving a view or living, you know, anything that has to do with word-of-mouth would apply to do. Any other advice on how to, you know, or examples on how to use referral programs to connect with things that most people wouldn't think about? Like you said most people B2C they think about it: yeah that's very easy to do what happens on B2B, but any other industry examples or any other advice that you have?
How to Use Incentive Structures in Referral Programs (7:07)
Josh: Um, yeah, I mean again, with the kind of incentive structures it really comes down to that. I mean the classic examples are the the two-way referral program where I get something and you get something so that always usually works pretty well because it's a social gifting thing you don't have to feel like you're selling out to your your your friend or whatever like all my friends that ones worth five bucks that one's worth of free Uber ride that one's worth like they don't no one wants to feel like that person so that's where the two-way thing like hey you get something and I did something.
So, but you can also be more creative with that you know you can get more complex into tiers but not overly complex. Like a lot of companies get locked into what is this costing me right? But the beauty of it it's performance-based marketing right? It's not pay-per-click it's not impression based it's if a sale is made now you have to give that thing so you've got to think more up chain in terms of how much would I pay for that for that lead.
And the other benefit is it actually just raises the profile with you with the existing customer because now you know they've referred you they see that you've you know given them credit or reciprocity for it and whatnot. So there's different ways to do it you can play with. We have a neat thing that's been taking off lately is especially with the people that can't necessarily give a lot for their referral program.
They might do a tiered system where the very first referral that they get that the friend sends them they're gonna give them a double sized reward or something like that, so that gets them over the hump of like am I gonna really refer a friend for five bucks...but ten bucks twenty bucks kind of sets the light off. So they're able to do something like that and then give five bucks for ones initially afterwards but now they know the system is working they have trust that hey that friend signed up now they can kind of go and keep rolling and share again.
How Referral Programs Can Help in a Time of Crisis (9:00)
Gabriel: That's awesome, that's awesome. So, of course, the world has changed and we have you know a crisis that we're going through and a lot of businesses are trying to adapt to this, what are some of the word-of-mouth systems or referral programs that you have seen that could help in a time of crisis like this one?
I love that you mentioned you know maybe maybe a donation or something like that. Any other examples or anything else that can help in a time of crisis?
Josh: Um, yeah. I mean, I think that's probably, you know, hopefully for us it's shining a little bit more light on the whole just doing more with word-of-mouth. I think what has happened and we saw this through you know as our SAS business you know we saw a little bit of a dip, but since then we've kind of come through and passed that. But we actually what was really interesting you know that I think the first initial reaction in the first couple weeks was to cut all the budgets. Right?
Like anything we think we don't need. And oftentimes the marketers or people at hand didn't necessarily have a choice; they're like just ‘cut anything that doesn't need to be to be there.’
So, we saw that and we did something we allowed people to pause plans, keep your stuff like don't worry about it just and what was interesting is when that second tier of like okay now that the dust is settling what do we do now? A lot of people came back and turned on their programs and I think they just started to analyze it and look at how that word-of-mouth was only was only gonna help them and to buckle down just like as we did and started to look you know we're not focusing on growth anyone we're focusing on who's in our family who's in our circle who can we keep keep safe on a family level but who can you know your customers are kind of your inner circle.
And I think our customers were seeing it that way too so we started to see them paying more attention to their customers and then it was a natural progression to we're like okay well we want to help you how can we help you and there they just started changing campaigns around to say like okay you know what we're doing okay but you can help other people you can refer friends and different things like that in in a way that wasn't too scheming because I think it was you know helping other people as well.
How Does Referral Rock Help Companies? (11:06)
Gabriel: Of course, of course. So, how does Referral Rock help with this process, because there are different ways to do referral programs you mentioned having a profile tell us more about that and how the actual app helps us or can help a company run these programs without having to worry so much about what and how and and how to communicate these things, too.
Josh: Sure yeah I mean that kind of starts back to the impetus of the initial idea, was since we weren't starting tech first we weren't you know we do have an API but we weren't like hey put in the script do all these API things and all these app things. It started with the thesis of if I'm gonna sell to a you know driving range or a car dealership or a yoga studio some of them don't even have websites. I mean and and so how can we make it so they can run a program fully standalone?
So, it started with that seed of an idea is like they can go in the app they can build their program and we'll host it all. It'll be on a sub-domain you don't need to install a widget you don't need to do all of that. So we kind of kept rolling on that path and it led us to building like landing pages and so you can build a landing page in the app and and the whole idea is that the marketer wants to go in they don't need to talk to tech they don't need to get yet other approvals and whatnot and they could go in and sign up and build their program even in the free trial so they can see it all and have it live and play with some tests people walk through the whole experience themselves as a member joining the program and do the sharing and kind of just just check all the boxes and see the full member experience, because we really pride ourselves on making sure that member experiences is paramount.
But, giving the marketer the tools to make it on brand look good have have their their own messaging but they can so they can kind of configure that and then what happens is after that is they let their sales team go like they're there they're setting up the program it's running and the rest of the business operations just happens the same way it did before.
So, again, since we weren't necessarily selling to e-commerce we we got a lot of strong integrations early on requests for things like HubSpot CRM, Salesforce, Marketo all of these other things-like all their systems of record in the marketing world and I like how can we just we don't we don't want our salespeople to go in and say yes this referral came in the door and then sold these things right? So that's where the integration with HubSpot made a huge thing.
It just kind of starts to align as you build these things you know like "ah I'm going in this area oh the internal says in this area how can we you know work together?" Is it was a natural progression that we didn't want salespeople in the product we we wanted them doing everything exactly the way they were and the marketer can set up all the events connecting to deals connecting to close one and say "oh close one that triggers the reward and boom gift card gets sent to person".
Referral Rock’s CRM Integrations (14:08)
Gabriel: So, yeah. That's a great segue because I was gonna ask you how why would you integrate with a CRM or a tool like HubSpot? And we were talking the other day about this and the answer is so salespeople don't worry about the program and they don't have to do anything about it and they can just do their job and once the sale is done it's passed on to the referral program and it's marked as a sale and then again salespeople and marketers don't have to worry about when and how these things happen the tool takes care of it with the integration right?
Josh: Right, exactly. Yeah, you hear in SAS everyone talks about like active users and people I was like no I don't want active users they want to go in set up their thing and let it run in the background let every new customer X factor of how many percentages do referral and it just happens it coordinates with everything else they're doing.
And they might come in and refresh their program, launch a new campaign quarterly or make some little minor changes but you know if we can sit there at the bottom you know rate giving an extra 10 percent boost across-the-board as you keep going like and and it works for everyone.
Gabriel: Well, at the end of the day like what you mentioned, it it's not an expense that hopefully will bring you something, you need you need to invest something in it there's an investment an initial set up an investment in the tool and everything but then after that if you get sells then you would have to invest in these things. So, it actually makes sense to implement it no matter what, no matter what, because, at the end of the day, it might just become another source of potential leads and customers for the future.
Josh: Right, exactly.
Gabriel: So, any other advice or things to prioritize these days? I know things are changing and people are adopting-any of the things that you're seeing with your customers that they're doing to try to make these happen?
How Referral Programs Can Lead to Success (15:44)
Josh: Yeah I think one of the things we were starting to study and it just did focus us more on our customers and looking at who were the most successful ones and as much as I'd love to say just insert our tool and magic happens but we know the reality of it is like it all comes from the core of what that company is. And so we've been working with customers and studying their word-of-mouth like just organic word-of-mouth and I know we've talked about word-of-mouth a lot but when you have a baseline kind of referral program it essentially just amplifies whatever else is going on.
If only one percent or half a percent of your customers are referring, like you gotta fix that first, right? Those we're not going to be able to fix your customer service we're not gonna be able to fix your brand we're not gonna be able to fix your value proposition all of those things and I've kind of been meaning to write a blog post about this but like I say like customer service business is also service but and and brand and value if if you're like really you know 10 out of 10 on any one of those you're gonna get some word-of-mouth if you get two of them oh my gosh if you get three you're like world-class like all of these things and then adding the layer on of things like referral programs just help that flywheel spin, you know?
And all the stuff we're doing you know really you gotta have that base so anyone that's talking is just like focus on that, focus on your customers focus on the value providing your brand the product and the service you can do. I think service nowadays is just a huge way to differentiate. I am almost shocked sometimes when you get bad service and you can probably see it in like smaller localized things where there's less choice yeah but it's kind of a shame that can still go on these days.
Gabriel: Yeah, and in it's so key that that you fix those things before you even think about any referral program or word-of-mouth first of all measuring understanding what you're getting from word-of-mouth today and also understanding your customer service and and your user experience in measuring and tracking those things so you can understand where the potential problems are that you can fix internally.
So, yeah, there are ways to get more referrals and number one is fixing your processes and systems and internal things so when you you sell a product or you're you're doing a service every time the experience is as good as possible and even when things go wrong the experience should be great and those things need to be fixed before you'd send more people to be referred to the system.
So, so, that would be kind of like step one understanding where you are, fixing your user experience, and just your customer service issues, and then and then definitely go back and try to amplify those things right?
What to Know Before Implementing a Referral Program (18:03)
Josh: Right. That's the flywheel right? That's the flywheel keeps talking about and and and that's the thing we keep we try to push back on customers too because sometimes their startup sometimes they're feeling like oh that is the formula that got Dropbox off the ground it's like no they got leads they had people first and they had a good product like you got to have those things and we're not it's not gonna be a Holy Grail. But we can help that flywheel spin. We can help it, you know, give it some other, give it some other spins to pick up the speed.
Gabriel: Of course of course. Anything else you want to share, Josh? I know we've talked about a lot of things but we always give at the end some time, this could be anything you want to share it could be special it could be more products you know stuff related to your product or a message to the world this is your time, Josh.
The Future of Referral Rock (19:37)
Josh: I mean lately what's on my mind is from a start-up perspective we're about 14 people we're trying to, I'm still in a lot of day-to-day things. I'm sure I will be wed to product for quite some time which I love to do, but yeah just probably the recent features we're building just because we keep we do keep our ear to the customers a lot and one of the things we hearing in the past year or so is just they would launch their programs and then sometimes that marketer got got all their you know got got their blanc program launched and they don't have time to circle back and they forget to you know add it to their email signatures they forget to kind of bake it into the other rest of their marketing so you have this big launch and I'm sure you've had this with with with you guys when you do this big launch and then you kind of stop.
And it's like well you gotta have something else you gotta keep going. So, we're on the when in the early days if we have a new feature called like we call it auto ask so it's a way to just take more of these signals so the fact that we're hooked up into HubSpot CRM is like now what event would you want for it to happen to invite someone to a referral program so and we want to get into you know some of the review platforms and things like that.
But the baseline is there there's an API it hooks up the Zapier and and I think I'm really excited about that one so I'm we have a lot of early customers using it it's it's out of beta it's out there and we have a couple sources hooked up to it and things like that. And the other thing is uh we have the new dashboard coming out and which we're really trying to move the narrative around away from just referrals as the value prop and more towards the brand awareness as well.
Because you might have a buyer that you know "hey are you ready to buy a car? Probably not today." But if if you can be top of mind at a certain car dealership down in Florida that I happen to hang out at and I'm telling you about it it when you are that's gonna bubble up but but the fact that you're visiting the site and kind of checking out what they do what makes them different you know that that still worth something. So even if a referral doesn't come in, we're doing a lot more with our dashboards to kind of show the traffic the repeat traffic so we can even quantify more than just the referrals.
Gabriel: That's actually very smart I believe that there is value in time spent with the brand we do a lot of brand affinity and awareness and affinity they work together very well so I would love to be able to see not just the sales but also hey is this bringing more traffic is this bringing people that are watching videos and spending time with a brand. So that's very smart to expand on those things and also reviews because local businesses live through those reviews and not just local business every business lives on on reviews so all those are great. You also mention some automation: maybe we can automate what these things happen then we trigger an invitation.
Josh: That's, yeah, that's all built-in and right now we even do it as a way where you can hook up a source and it will collect them and you can see what it collects and then you can choose to send a campaign out of it and then later on if you decide to say now I want to make a automatic rule based off of that and you can do that.
We understand people are a little kind of they want to take a step back on automations it's just not like one I know that's gonna do but I don't want to just push that button let me see. So so we built that as a nice way so you can see all the collection and then you can decide like hey here's these twenty email addresses that came in here's why, here's the source, they gave a positive review and then you can also segment them say I'm gonna change the messaging a little to them a little differently or I'm gonna route them to this different referral program which has a different offering so allows you to kind of a be it a little bit.
Gabriel: Awesome, awesome. Thank you again Josh for everything that that you've shared with us today. We're gonna definitely encourage people to check Referral Rock and give it a try. You said you had a free trial, right?
Josh: Yep, yep. We have a free trial and we're yeah we're it's a 14-day free trial but- I'm going to link it right here.
Gabriel: Awesome, Josh, thanks for everything! We'll stay in touch and stay safe okay.
