With businesses nowadays, especially eCommerce, where the cost base is constantly increasing to reach out and acquire new customers, more particularly on ads, it's definitely a big relief to discover a new marketing channel that you own without having to depend on a third-party platform. In this episode, Raul Galera, Partnership and Business Development Lead of ReferralCandy, shares how referral marketing, and ReferralCandy, can help entrepreneurs and start-ups leverage their revenue and customer base without having to grow their cost base.
Raul also shares in this episode how ReferralCandy works - how easy it is to set up, what can be integrated with it and the smooth interface and transitions of it, and the benefits of referral marketing. He also shares how entrepreneurs can take advantage of this without having to massively grow their spending to reach and acquire new customers and cited a case study on one of their customers. And lastly, he shares how ReferralCandy gets noticed.
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Hello, and welcome to this episode of The UnNoticed Entrepreneur. Today, we're going to talk about how you can increase your sales like up to 10% by having a referral program. And to talk about that, I've got Raul Galera joining me from a company called "Referral Candy." It's a Singapore company, but he's based this week in Cades, Southern Spain. Raul, hola, welcome.Raul Galera:
Hola. Thanks for having me.Jim James:
You're more than welcome. So 10% uplift possible in terms of selling existing products to maybe existing customers, but also to new customers through a referral program. Tell us how does this work? Because it sounds like a great way to grow sales without really any incremental cost.Raul Galera:
Yeah, absolutely. So the way it works is that we, the Referral Candy, integrates with your e-commerce store. And then basically, what we do is that we give each one of your customers a unique referral link that they can share with their friends. Once the customers share this link with their friends, which could be on social media or a text, or, you know, whatever platform they're using, the friend clicks on the referral link, and then they're taken to a landing page with the offered description. So it could be something like your friend just gave you 20% off at this store and a coupon code that they can use at the check out. After the friend completes the purchase with the coupon code, we track the whole referral activity and we reward the customer who made the recommendation in the first place. So, it's pretty straightforward.Jim James:
Yeah, that's really nice. Now, let's just talk then about some of the practical signs of this, Raul. On what kind of stores could an entrepreneur implement Referral Candy?Raul Galera:
So Referral Candy works best on what we typically call "DTC customers," so stores that are selling their products direct to consumers and not necessarily through maybe like a marketplace, like Amazon or Etsy. We unfortunately can't integrate with those. But if you have any commerce store, like I said, Shopify, or BigCommerce, WooCommerce, Magento, or even if you have your own kind of custom store set up, you can integrate with Referral Candy and have your referral program running on autopilot.Jim James:
And that's great. And Shopify is huge too, right? For anyone that's got a brand, that's already got a store—that's fantastic. Just take us through the mechanics, though, Raul. Is this a very complicated integration or is it very simple and quick to set up?Raul Galera:
It's very simple. We've always built a Referral Candy from the inception. We built it with the image of an entrepreneur that might not have all the resources in terms of money, or time, or access to, you know, technical people to, to help him or her with things that are related to the store. We've always built Referral Candy in a way to make it as simple and as quick as possible to get your referral program up and running. So if you are on any of the, kind of, major eCommerce platforms, like I mentioned earlier, Shopify plus, BigCommerce, WooCommerce. All you need to do is to install our plugin, or our app, and then go through kind of like the creation process for your referral program. So it's all designed in a way that, honestly, you can get a referral program up and running in a matter of 10, 15 minutes after you install the app.Jim James:
Okay, well, that's very quick. Just take us through the mechanics, then, and then we'll talk also about the cost, Raul. So the mechanics, if I've gone into, let's say, Shopify—I've got my own store, and then I want to find you in the Shopify marketplace, and I put it in Referral Candy, how does it work in terms of choosing the referral, let's say, the promotion codes and the products? You know, how does that work for those of us that really, unfamiliar with this whole area?Raul Galera:
Yeah. So, once you access the Referral Candy dashboard and you start creating your referral program from scratch, the first thing that we're going to ask you is exactly that, like, "What are the rewards that you want to give your customers and their friends for referring you to their friends and family?" So, we typically work with either cash or coupon rewards. So the way that this works, let's say, you're going to give... let's say, they were going to set up a referral program from scratching with in which your customers get 25% off their next purchase for every friend they refer, and the friends also get another 25% coupon on their first purchase. So, all you need to do is to literally select the coupon option on Referral Candy, select the amount, which in this case is 25 percent. And then Referral Candy will automatically create these coupon codes for you inside of Shopify. And we'll take care of sending those to your advocates, friends, and then also to your advocates after they have successfully referred a friend. So, you just need to set some parameters on what are the rewards that you want to give and then we take care of the rest—that's for coupon. But instead of coupon codes, you maybe want give cash as a reward to encourage customers to refer their friends. You can also set that up and we take care of sending out the actual cash rewards to your customers through PayPal automatically.Jim James:
Alright. So this is really nice. So you can give people a rebate, too, if you like. Raul, in terms of the problem that you're solving, you know, we've talked quite quickly about the product itself. In the broader picture, what problems do you see companies facing now? Because, you know, it did seem as though eCommerce was taking off. You know, Amazon's profits are going through the roof. Why would someone need to have a referral program like this?Raul Galera:
Somebody, I mean, any entrepreneur needs to think about referral marketing almost from the very beginning, because it's probably one of the very few marketing channels that you can absolutely own without depending on a third-party platform. I was, I was talking to an agency a couple weeks ago and they referred me to this report by E-Marketer in which they said that in 2021 e-commerce stores were paying more money to Facebook to cover Facebook ads obviously. They were paying more money to Facebook than they were making themselves in net profit, which basically means that Facebook is making more money out of e-commerce stores than e-commerce stores are making themselves. And that's, that's crazy. I mean, that's, you know, that should not be normal. But unfortunately, it is the norm right now that e-commerce stores have a huge dependency on third party platforms to acquire customers basically. And so, if you can, from the very beginning, create a system that automatically incentivizes your customers to go out and sell for you, it's a platform that you own because you own that customer base, you own those advocates, you own the contact with their friends. So even if you're not using Referral Candy, or even if you're using Referral Candy and then you end up moving to another platform, you still own it. You know, nobody's going to own that data for you because it's a platform that you've built yourself. So that's reason number one, in my opinion, why entrepreneurs should definitely focus on this, but then it's also because, as you mentioned, in eCommerce in particular, ad costs are going through the roof. And so it's getting more and more expensive to reach new customers. So if you can have another channel that it's also performance-based in the sense that, sure, you're given discounts to acquire customers, but you're only given those discounts once the purchase has actually taken place. So that doesn't really happen on any other platform that's available for entrepreneurs out there. So that's something that those two things combine, owning your platform and then knowing that it's a performance-based. In the long run, it can definitely have a huge impact on the bottom line of your business.Jim James:
Yeah. So in that sense, Referral Candy is self-funding, isn't it, really, as a program? Can you tell us, Raul, cost perspective?Raul Galera:
Yeah, exactly.Jim James:
It sounds fantastic. What would it cost, you know, a company to use Referral Candy to run its referral program.Raul Galera:
So our pricing has two components. So it has a fixed monthly fee and then a commission on monthly referral sales. So a commission just on revenue that has been generated through the referral program, and our pricing starts at $39 a month if you're on the annual plan or $49 a month if you're on the monthly plan. And so the way this works is that we charge, yeah, 39 or 49 a month, plus this commission on referral sales, which is, it starts at 5% and it goes all the way down to 0.25%, so way less than half a percentage. And that's depending on the kind of like your referral sales volume. But you're basically paying Referral Candy in terms of how much money you're making from it. If you don't make any money from a Referral Candy you're only going to pay the base fee. And, as I always say, "It's in our best interest as a company to make sure that our clients are making money, because that's when we make money ourselves." You know, we don't necessarily live off of the base fees. And on top of that, we also don't lock customers into... unless they actually want to go on an annual plan, we don't lock them into contracts. They all have a 30-day free trial, so they can start using the platform and hopefully make sales before they even have to start paying anything to Referral Candy. And if you're on a monthly plan, you can cancel anytime as well. So we make it flexible for anybody to try it out.Jim James:
Okay, that's wonderful. I do have one question here about the data, Raul. So you mentioned, for example, customers buying, for example, online, and then they get a code or a coupon, and then they send that through social media, maybe they put it on Twitter or they send it by email. Who tracks those referrals? And what kind of reporting would merchant receive from Referral Candy?Raul Galera:
Yeah, absolutely. So we, we track it ourselves. And so we have different ways of tracking how referrals are taking place. Years ago, we used to rely on cookies. Now that's only one of the channels that we use to track referrals, obviously, due to the new updates. But we actually use those coupon codes to also track referrals because since we are creating them, we associate the coupon codes with a particular advocate, and then we're able to see who used the coupon code at the checkout. Okay. We can connect it to an existing advocate because that's a unique coupon code. So, so we track... that's we kind track the whole referral process from the moment that they click on the link until the moment that they complete the checkout. And in terms of reporting, so obviously, the number one piece of data that we show merchants, in our opinion, it's the most important piece of data and the one that's kind of going to tell them how well the referral program is going it's revenue. So we track daily revenue from the referral program. We compare it to the total amount of revenue that the store is generating, and then using that, we calculate what we call the "Referral Rate." Just again, percentage revenue coming from referrals compared to the total. And then after that, we also report like, you know, how many clicks have taken place? How much traffic has the referral program generated to their store? And then one thing that's actually been interesting for merchants to use in the past few years is, we have a rank for each one of the stores, who are their best advocates? So who are the advocates that have referred the most friends. And so that's usually interesting because sometimes they don't know that they have somebody that's maybe an influencer on Instagram, and just happen to be their customer. And they're sharing it on social media and, you know, they're referring five times more people than anybody else.Jim James:
Yeah, I would think that would be really interesting to get a ranking because then you could engage those people even further. Raul, what about a case study? Can you give us an example of a merchant that shown some uplift by installing Referral Candy? Just to give us an illustration of the benefits.Raul Galera:
Yeah, absolutely. So I would say that one of my favorite merchants, and it's one of our case studies, so it's available on our site. It's called "Branch Basics." And they are a company that they are operating in, in one of the... my opinion, one of most difficult markets that exist, which is the cleaning supplies. The cleaning supply industry, it's dominated by massive corporations, and they still decided to get in it. The reason what makes them different is that they have created cleaning products that are safe for people to use. I mean, most people don't know this, but the regular cleaning supplies that we buy on the stores are somewhat toxic. So these are made with, you know, organic products, and they don't hurt your skin or, you know, anything like that. But also they sell them to you in a subscription based. You get a set of bottles at the beginning of your subscription. And then every month you get these kind of this powder that you can refill with water and just, you know, start using your products right away. So you don't have to buy plastic. You know, you don't have to pay for water, which is basically what clean supplies are at the store where you're paying for plastic and water. So with this value proposition, they knew that their customers were going to be very engaged in telling their friends and family why they went with Branch Basics instead of buying with a traditional kind of commercial brand. And so they started using Referral Candy almost from the beginning, because they needed to get an edge on such a competitive industry, and they managed to get well over 10% in terms of referral rate, which means that every month over 10% of their sales were coming from referrals, but even more, those are new customers that haven't bought from the store before. So these are customers that just made their first purchase that were acquiring customers at a 10% rate on a monthly basis and those customers are going to stay for longer. So, you know, it was cheaper to acquire those customers than any other channel, and you know that they're going to stick for longer also because they have kind of like that social aspect of why they made it to your store. They made it to your store because a friend convinced them to do it. And so it's likely that they're going to keep talking about it and they're going to show more friends, you know, what they've bought and convince more people. So it's a cycle that starts every single time.Jim James:
Yeah, Raul. I love that story on, on lots to levels. So, in this sense, the referral program plays very well for the entrepreneur with a smaller company, doesn't have to be a large company by any means, does it? Because you can have a more passionate audience and consumer base, customer base, if you're a startup, than even if you're a multinational.Raul Galera:
I would say even more.Jim James:
Yeah, exactly. So I have a question about language, Raul. Referral Candy is based in Singapore, you're obviously a global... a global citizen working from Cades today. Is this a multilingual platform or do people need to, you know, run different referral programs software where they want to do it in, for example, in the Middle East, if they want to have an English-language, referral program, can you just explain how that works?Raul Galera:
Yeah, so all of our templates can be translated into any language. So yeah, you can effectively run campaigns on any language on Referral Candy. Also, if you have a store and you are using different versions of your store in different languages, we are able to identify which customer is coming from which website, and then we can send them a message, like, let's say, you can have templates in German, English, Spanish, French, and Italian. And if we see that there's a customer coming from Italy, we'll make sure to send them a referral email in Italian, in their own language. So the kind of like the whole transition, it's pretty smooth.Jim James:
That's Very ,very nice, indeed. And just a little bit then about Referral Candy and the promotion work that the business is doing. How is Referral Candy promoting itself?Raul Galera:
That's a really good question. So we actually rely a lot on content marketing. So kind of putting a lot of content for entrepreneurs out there to, you know, figure it out how to grow their sales using referral marketing. And so we have a blog that gets a pretty decent number of views every month and we're actually quite proud of it. I would say, you know, eat our own food. Like we actually have affiliate program as well, on our site. So we encourage people to go out and refer other stores and get paid for it. And then, you know, obviously, we're always trying to get in touch with podcasts like yours, honestly. That's one of the things that we love doing and kind of spreading the word about referral marketing, not necessarily, just about Referral Candy itself, but about referral marketing in general, because it's a channel that sometimes it's overlooked. So I like to remind that this is something that exists and that entrepreneurs can take advantage of.Jim James:
Yeah, which you really have done today. Raul, thank you much for joining me on The UnNoticed Entrepreneur Show. If people want to find out more about Referral Candy, where can they go?Raul Galera:
referralcandy.com. That's the best place to learn about us. And if you're on, if you're on Shopify, you can also check out our Shopify app listing.Jim James:
Okay, Raul Galera, joining me from Cades. Thank you so much for sharing. You know what, it could be an antidote to the increasing costs of going through the traditional marketplaces, just like rent rises, I suppose. Independent entrepreneurs and retailers can now build some of their own referral marketing using Referral Candy. So thank you for joining me and explaining this opportunity to grow your revenue without growing your cost base. Thank you so much.Raul Galera:
Thanks for having me.Jim James:
You're more than welcome. So I will always put the show note details in, and give you the best place to get the best start to find out how you can promote your business. Thank you for listening to me, Jim James, on this episode of The UnNoticed Entrepreneur with Raul Galera in Spain.