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Case Study: How One Company More Than Doubled Customer Referrals

by Kimberly Smith  |  
August 3, 2011
  |  12,590 views

In this article, you'll learn...

  • One company's success story about its customer referral program
  • Four tips for creating a referral program that'll boost sales

Company: Roku
Contact: Lomit Patel, senior director of direct marketing
Location: Saratoga, Calif.
Industry: Electronics
B2B/B2C: B2C
Annual revenue: Confidential
Number of employees: 110

Quick Read

Have you heard of Roku? You likely have if one of your friends or family members is a customer, because Roku offers its customers a free month of Netflix for each online purchase they refer.

Plenty of companies have referral programs, but how many can say theirs converts at about three times the rate of other online marketing campaigns and brings in over 500 new product sales each month? Read on to learn what Roku did to make its customer referral program a huge success.

Challenge


Roku Inc. is the maker of streaming entertainment players that connect to consumers' televisions via wireless high-speed Internet to enable streaming of hundreds of thousands of movies, TV show episodes, sports shows, music, photos, and more. It does so via partnerships with Netflix, Hulu Plus, Amazon Instant Video, Pandora, UFC, Facebook, Flickr, among others.

Roku customers are passionate about the company's products, and they aren't too shy to talk about them, either. The company often receives enthusiastic feedback via email, and customers chatter about its products on social media sites. But what surprised the company most was when it surveyed its base and found that roughly a quarter of its customers learned about the product via family and friends.

Clearly, word of mouth was playing a key role in Roku's success, and the company sought an effective way to amplify those activities.


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Kimberly Smith is a staff writer for MarketingProfs. Reach her via kims@marketingprofs.com.

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Comments

  • by Dan Soschin Wed Aug 3, 2011 via web

    It's easy to generate referrals when there are incentive programs in place. Remove the incentive and referrals become a real challenge.

  • by Erin Anne Beirne Wed Aug 3, 2011 via web

    What a geat example of finding a "perfect" fit between the product and the referral incentive! Funny thing is, looking back the choice seems so obvious, but looking forward before they landed on this idea, I'm sure it wasn't so clear, as suggested by the range of options they used to provide. I will definitely keep this example of the value of finding a great incentive (and not a gimmick) in mind because this case study shows it's worth the effort.

    What's even more challenging, though, is how to earn referrals when incentive programs are not allowed, such as in the financial services industry (Canadian regulations).

    Any thoughts on that front?

    Thanks,

    ea/

  • by Lori Bush Shepard Wed Aug 3, 2011 via web

    Erin, in cases where incentives aren't allowed, think about services you can provide the organization itself -- additional consulting/support, discounts on future purchases, opportunities to speak at conferences, etc. It requires more creativity, but it is possible to come up with a compelling hook if you know your audience well.

  • by Dan Soschin Wed Aug 3, 2011 via web

    I think everyone is missing the point. I discount is an incentive. Additional consulting is an incentive. Conference attendance/speaking is an incentive. There are many industries where you cannot provide incentives. That's where true marketing comes into play. Emotion, passion, the things that really make people want your product/service... and appealing those these types of positive experiences and emotions to compel others to refer you... Things like sharing videos, testimonials, case studies...

  • by SpencerBroome Wed Aug 3, 2011 via web

    Largely agree with Dan.

  • by Erin Anne Beirne Wed Aug 3, 2011 via web

    Hi Lori,

    Thanks for your suggests. Unfortunately, no incentives can be given in my client's industry, and, as Dan says, discounts or additional services are included in that category.

    My clients' clients love them, and many have been with them for many years, but somehow getting that next step of earning a referral is a little more challenging than we might expect. People are very private about their financial matters, and many even keep the fact that they have an advisor private from friends and family.

    Dan, I'm going to reflect on your suggestions about case studies, etc. There might be something to your suggestion; maybe some clients would be willing to share just how much benefit they have derived from my clients' services if we just find the right way and time to ask.

    Thanks for your thoughts, everyone!

    e a/

  • by Sarah from PostcardMania.com Fri Aug 5, 2011 via web

    Great article, interesting that 70% chose to share via email over social media. Good to know! We currently offer customers $100 credit with us when they refer someone who buys and we are rolling out an improved referral program giving them more ways to share content and refer so this article came at a good time!

    -Sarah Kicinski
    www.postcardmania.com

  • by Ankit Runwal Wed Jun 1, 2016 via web

    Agreed Dan with you that non-incentive based referral programs are not as effective, because as people only talk/recommend a product/service they like/enjoy or the companies who offer them. A well-designed referral program combined with a strong product-market fit can exponentially increase the growth of a business in a more cost-effective manner. My colleague wrote an article on Top 12 Ways Companies Gave Back to Customers.

    http://www.socialannex.com/blog/2015/12/22/the-top-12-ways-companies-gave-back-to-customers-in-2015/

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