How to multiply the performance of your existing e-commerce referral program ⎜ CloudSponge ⎜ EP 163

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This is a podcast episode titled, How to multiply the performance of your existing e-commerce referral program ⎜ CloudSponge ⎜ EP 163. The summary for this episode is: <p>Ryan Cramer of Crossover Commerce talks with Jay Gibb of CloudSponge one-on-one about how to multiply the performance of your existing eCommerce referral program.</p><p>---</p><p>Crossover Commerce is presented by PingPong Payments. PingPong transfers more than 150 million dollars a day for eCommerce sellers just like you. Helping over 1 million customers now, PingPong has processed over 90 BILLION dollars in cross-border payments. Save with a PingPong account <a href="" rel="noopener noreferrer" target="_blank">today</a>! </p><p>---</p><p><strong>Stay connected with Crossover Commerce and PingPong Payments:</strong></p><p>✅ Crossover Commerce @ <a href="" rel="noopener noreferrer" target="_blank"></a></p><p>✅ YouTube @ <a href="" rel="noopener noreferrer" target="_blank"></a></p><p>✅ LinkedIn @ <a href="" rel="noopener noreferrer" target="_blank"></a></p><p>---</p><p>You can watch or listen to all episodes of Crossover Commerce at: <a href="" rel="noopener noreferrer" target="_blank"></a></p>

Ryan Cramer: (silence) What's up, everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer, and this is Crossover Commerce presented by PingPong payments, the leading global payments provider helping sellers keep more of their hard earned money. Hey everyone, welcome again to another episode of Crossover Commerce. I'm your host, Ryan Cramer. And again, thank you if you're tuning in earlier this week, and you might be thinking, " Hey, why is episode 163 after 164?" Well, if you were with us on that day, actually Facebook, Instagram as well as other entities including StreamYard which we use to go live on these platforms happened to go down. So we had to reschedule, think on our feet real quickly, and we're doing episode 163, in fact, chronologically after 164. So give us a break everyone, this is the beat about going live is when you have glitches in technology, so it happens that you have to just kind of ebb and flow and go with the punches. But luckily, my wonderful guest has been able to reschedule quickly and effectively later this week, which is today. So if you're tuning in live from Crossover Commerce for the first time, welcome. This is my corner of the internet, as the introduction had stated, where I bring the best and brightest in the Amazon and e- commerce space. That can be anything from sourcing logistics, to product listings, to anything in terms of marketing your brand to be more successful, and apply it to get better at your business, whether it's growing domestically, or you want to take that next step into furthering or adding on some information. This is the podcast for you. So if you're joining in watching us live, go ahead and let us know where you're listening from, watching from. We appreciate the comments or questions that you might have about our guest or any sort of topic that refers to our guest today. And then also if you're listening to us on your favorite platform, that could be in LinkedIn, Facebook, or favorite platform in terms of podcasts that could be on Apple podcasts, Spotify, Google podcasts, Stitcher, anywhere where you can search for Crossover Commerce, you're going to find all of our episodes, but of course the best avenue and resource you can go to is usa. pingpongx. com/ podcasts and you'll be able to watch, listen and check out all the transcripts of the episodes there. So definitely go and check that out as well. And then of course, thank you to our sponsor, PingPong payments. What is PingPong payments? Well, I'm glad you asked. PingPong payments is a cross- border payment solution that's helping e- commerce sellers do more with their money. That could be anything from sending money to suppliers and manufacturers, to even paying out their entities in terms of Vas, if they're receiving in multiple different marketplaces, PingPong is going to be able to help you out. With that being said, thank you PingPong, thank you for your support. And of course go ahead and sign up for free today. You can check it out at usa. pingpongx. com/ podcast. Rolling right into it, again, we don't want to leave anyone waiting who is already here for the remainder of, or for the podcast earlier this week. So we want to jump in right in today, I apologize, I'm going ahead and making sure that all of our platforms are working. We don't want to have another hiccup like we did earlier. So with that being said, we wanted to go ahead and bring in our guest today. His name is Jay Gibb os CloudSponge. CloudSponge is his company and we titled today's episode, how to multiply the performance of your existing e- commerce referral program. Referral programs can be anything from... If you're a listener and you are saying, " What's a referral program?" It can be third- party entity taking your ads or your word of mouth advertising or just having people point them in your direction if they're looking for a service or a product that might actually be looking... you might be looking to purchase or use for your company. So that being said, it's typically along the lines, you might have heard as affiliate marketing, referral marketing, performance marketing, it's all around the same premise of directing third- party traffic to your website to make a purchase of some sorts as well. But we're going to talk about how to enhance your existing program, because that can mean incremental growth in terms of new audience eyeballs to your platform or to your direct- to- consumer website, you're talking about outside traffic that might see your ad, you can be talking about all these different ways, influencers pointing everyone to your website, or your listings even on Amazon. And typically that comes in the form of a commission or a referral payout. But we're going to be talking about that today. How to you enhance it, especially around Q4, important to make sure all your ducks are in the row and you have all of your marketing assets working for you. So that being said, our guest today is Jay Gibb. He's the former software engineer and founder and CEO of B2B SaaS company CloudSponge, as mentioned earlier. With his team, he actually helped thousands of commerce and Shopify store owners optimize their word of mouth sales since 2010. Fantastic experience. And with the unique blend of his tech expertise and soft skills, him and his team have helped e- commerce stores build the right features and reduce customer acquisition costs and increase sales. That being said, I want to go ahead and welcome to Crossover Commerce. Jay Gibb of CloudSponge. Jay, welcome to Crossover Commerce once again.

Jay Gibb: Hey, what's going on, Ryan?

Ryan Cramer: We were talking pre show before this, and I'm doing well by the way, it's beautiful here. For some reason, it's been super rainy here in Indianapolis, but I'm glad to have you on the internet again. Because, gosh, the world freaked out for a second. Companies like Facebook, or as big as Facebook, I should say, once they go down, you start to realize all the different things in terms of communication, profitability, ads, just social connection, how much they have their hand into and when a company like that goes down, it seems like the world shut down. In certain aspects, I should say.

Jay Gibb: Yeah. And I think I owe everybody an apology for that. I wasn't feeling prepared to speak with you, I was a little nervous. So I called Mr. Zuckerberg and I just said, " You know what? I need you to need to shut this thing down." But now I'm feeling good, I'm feeling better, ready today.

Ryan Cramer: There it is. Right. I was going to say, as long as you're feeling better, we want to make sure that that's the case. And of course, when we go live, you were more prepared, you have to give a little bit more lead up to this. So I appreciate kind of the come to God moment, if you will. But that being said, I appreciate the time and the coming back on today. But before we get started, I know I kind of just did a little bit of insight in your background. You've been working with CloudSponge obviously, you founded it since 2010. So 11 years before that, what was your background? What did you do before getting into CloudSponge and inspired you to start this journey?

Jay Gibb: Oh, okay. Yeah, so out of school I was a software developer. So I worked with all kinds... I did freelance work and built software, mostly website- based stuff for several years, and then eventually became a partner at like a dev shop, it was like an agency that has engineers that then build products for people. And one of the products that we were hired to build was it needed contact picker, it needed basically address books. So we were hired to build integrations with Google Contacts, and AOL contacts and Yahoo Mail contacts, and all the other places on the web where people store their contacts. And as we went down that path of building that, we just noticed that a lot of other people were also building it, and there weren't any good solutions on the market for it. So decided to sort of take an entrepreneurial path and start a company around that, that specific thing that we knew there was a demand for in the market. So it was kind of a transition from being an engineer to being an entrepreneur, that the thing that triggered that transfer for me, or the shift for me was seeing an opportunity and kind of going after it.

Ryan Cramer: Amazing. So kind of that entrepreneurship journey. Someone wanted to... It was more of that engagement, if you will, of clients, but also outside forces. So in turn, we're talking about how to help performance of your existing e- commerce referral program. I guess I kind of mentioned it earlier in terms of the basics of it, what a referral program is, and in fact, how they're helping businesses and SMEs or small to medium businesses grow. To me, what would be anything that you would add to that? Is that in essence, how you see a referral program, or is it even more complex or maybe even more simple than my explanation?

Jay Gibb: Well, I think we have a very... It's a very specific thing that we do and that our customers pay us for. And it's around making the interface for the referral program just work better. So we work with most of the referral program platform industry, most of the companies that have... Like your audience can go buy a referral program software from... In some form or fashion, use the CloudSponge product inside their product, right? Some of them don't. And then a lot of our biggest customers, they don't use those platforms, right? They'll build those things themselves. What we really focus on is e- commerce stores that have a referral program of some kind, or sharing functionality, it doesn't necessarily need to be a referral program, can be other sharing functionality around their website. And we strategically place a contact picker in those places, basically so that the happiest customers, whoever are currently purchasing products from your store, have an easier time sharing their contacts, email addresses with you. So you're not making people type out email addresses of their friends, one by one, which is tedious on a desktop computer, but nearly impossible on a mobile device, right? Or making users leave to go look up email addresses in their contacts in a different tab or a different browser, a different application. So our focus is really around those areas of any e- commerce store and letting customers of those stores access their own contacts without getting distracted, without having to do tedious, labor intensive things like type out lists of email addresses.

Ryan Cramer: Right. So do you guys, in terms of like enhancement of this, is it something that, as an existing inaudible has to come into play? Or is there a framework that you're helping people navigate through of, " Hey, what's the value of referral program? Is it starting from the beginning? Or are we doing more of the... We're going to enhance it and take it to the next level." Is that where you guys really shine or is the whole scope of we can start and put an SOP in place, or we can even take what you have existing and enhance it and take it to the next level?

Jay Gibb: Yeah, so people who come to CloudSponge before they've even got a referral program, typically what we do, our customer success group does, is we help them make a choice, because these are partners of ours, right? So we know a lot about them and we're a really good lens into that industry. And if an e- commerce store owner tells our team a little bit about their technology stack that they're using on their website, and their product and their sort of customer demographic, just a few basic boundaries, a lot of times we're able to sort of help them make a choice between the vendors that are available for that in the market. The reason why we do that is because we can't really help them too much until they at least take that step on their own. We're definitely a multiplier of an existing program, we're not selling referral program software, our system doesn't send emails or generate unique referral links or do fraud stuff or any of those types of things. That's all kind of sort of brought to the relationship either by our customer or by a vendor that they've chosen. Then they just basically multiply the performance of that by adding the CloudSponge contact picker in those strategic places that I mentioned.

Ryan Cramer: So basically amplifying your loyalty or your fans that are super loyal to your brand and really enhancing their either word of mouth or instead of using word of mouth, making it so that they feel like they're a part of some sort of give back or make them want to do more. Is that more the aspect of it?

Jay Gibb: Yeah, well, if you're able to get your customers excited enough about your referral program in terms of like earning rewards, for example, most of these things have some kind of double sided reward, like you're going to send a coupon to your friend and if they buy something, then we're going to give you 20 bucks off your next order, is kind of the most vanilla. Then anybody who actually resonates with that offer that you're making, will appreciate having a contact picker, because it means it's practical and feasible for them to actually spread the word for you, and actually send that to 20, 30, 50 people from the address book, rather than however many they have the patience to type in one by one, which is usually zero, sometimes one or two.

Ryan Cramer: Right. Absolutely. So I mean, in that regards, is there a... So with that being the kind of nature of it, is that where you see most people have a problem? What was the number one problem, I guess, if I'm the customer business I'm coming to you for? Is it that just enhancement of, " Hey, I think there can be more done," or I just need to figure out... I have this big list of customers and contacts, I think that there's more that can be done, how do I do that? Is that maybe the number one question or the problem that people are having?

Jay Gibb: Yeah, I think what happens a lot of times is people will... It's kind of self evident that a referral program is a smart idea. I don't think most people need to be persuaded that they should have one, right? And then I think a lot of stores will go through the effort of building one or installing a plug- in or choosing a vendor, and then they get kind of like mediocre results from it. And it's surprising and maybe a little bit deflating when that happens, right? So then they start searching around for the keywords that we write about, which is like this, multiply the performance of e- commerce referral program, or examples of beautiful interfaces that we've discovered over the years and written about and things like that, and they eventually find us and then get on a sales call with me or with one of our customer success people. And they say, " Hey, I've got this referral program, but it's just not really... It's not as successful as I thought it could be." Then we educate them and help them with making those interfaces better, and all the other stuff that you... The personalization of the emails that are sent from the referral program is something that can be 10X better when you've got an address book payload to work with for personalization. So we just basically do... We'll do a tear down of an e- commerce site, we'll basically get on a screen share with a store owner, they just put themselves on a calendar from our marketing site. And we'll do a tear down together, we'll go through a scorecard that we have and sort of look at all the different sharing functionality that they have. And then make some suggestions, right? Every conversation kind of goes differently. But the things that I'm hoping for and looking for are people that I feel like can instantly double or triple the performance of what they already have by adding a contact picker and a bunch of referral email personalization things that we do training on.

Ryan Cramer: So it just that alone that's really drawing the lift? Or is it more of the... So do customers find it... So if I'm a customer, and I'm engaging in a referral program, do people find it more engaging to work with this simplistic nature of, " Hey, I can use something like a contact picker, and I can just upload my address book and it's easy to do that." Or is it more like the earn- outs in the rewards program more than the sender side of things, do you see the ease of function that's more that lift? Or is it more of how people engage with the reward side of it, if I do this and give you this, I get this in return? What's kind of that balance, if you will?

Jay Gibb: Yeah, I think the rewards that are being offered by the company to their customers is sort of the first step. For us, that's the baseline that we can work from, we can say, " Okay, you've got this reward structure, and these are the metrics that you're getting for that, so we'll help you take those metrics and make those better." But I mean, nobody's typically going to... You're going to get very low numbers for a referral program if there isn't rewards, right? Because then you're just really depending on people's affection for your brand, and the idea that they have a perfect fit person in mind that really wants your product, they're going to send that one email or that one referral to that one person because they love you so much, and they know that this other person in their life is going to also love you. So everybody needs to take it past that level, right? You need to get to a place where you've got some kind of reward, split testing is important here. Every demographic is different, right? Different price points, different products. So don't be too arrogant about choosing your rewards, you got to try a few different things. Most of the time, what I've seen that works is some kind of double sided reward scheme, right? Where-

Ryan Cramer: One for the sender, one for the receiver.

Jay Gibb: Yeah, basically the current customer gets something if they can get a new customer to take action and make a purchase, and sometimes that's motivating for somebody, but a lot of the time, what's more motivating for them, is being able to give a gift or a coupon or a discount or something to somebody in their life, and that's the thing that's maybe triggering them to actually take action, right? So they're all different, and every store's going to have sort of different triggers for those two sides and different amounts that they can afford, as a part of like a customer acquisition cost. And that, for me, is really a baseline, right? That's something that sort of has to exist first, and so it's going to have an impact, and having that is definitely going to help the word of mouth of the store. Then my job is to take that baseline and try to double it or triple it, right?

Ryan Cramer: Right. So in that regards, would be more valuable, in your mind, would it be the value of which they're giving away for a customer? Or would it be just the acquisition of... In this case, it's almost the free acquisition cost. So I look at this different ways, because being in the industry in terms of performance marketing, this is how I view it, how you're acquiring your customer, whether it be on a podcast, or if it's email engagement, or if it's just someone caught wind of your brand, and they say, " Oh, the referral program is either an incentive," whatever that incentive is. Sometimes it doesn't go claimed, right? It's just the acquisition of, " Hey, potentially, if you're sending information over to the company, whether it be their name, their address, or phone number, those are really the three biggest components that you can really acquire". And then after that would be of course, making them a customer of yours. So that being said, is it more of a focus on... What would, when you're offering, say$ 100 per referral, or when they sign up, is there match of in terms of value of which they send you three contacts, but maybe of those three contacts, two people are actually going to be signing up as a customer, but you still have that third contact information, does that make sense? The value is still in the customers information that they have, but they might not have gone through that reward? Is there a value there? Or what's kind of that missing piece, if you will? Does that make sense?

Jay Gibb: Ah, I think so. Yeah, I mean, I think... You're asking about the contact information that comes from somebody's address book that now that e- commerce store has been given and-

Ryan Cramer: Right. Even though they might not have... They might have claimed the offer, whatever that offer might be. Is that still of value to the customer at the end of the day, because they still have somebody who is, in theory, in mind that would be interested in this, but you can still engage with them on a different level, not just, " Hey, sign up, and you get this free reward." Is there still ways that you take that subset of data and you maybe make it another focus on something else, like you can still engage with them passively as like, " Hey, we still have these seasonal promotions," or anything like that? How do you really take that data and kind of break it apart, if you will?

Jay Gibb: Well, for that data, we recommend to anybody who asks to not do what you're describing, right? Because there's privacy issues, you're going to kind of go against what is just in by GDPR, and CCPA, and a bunch of other privacy compliance regulations. My address book is my address book. And when I allow you to display my address book to me from your website, basically it's a transactional email, I want to email my friend, I want to send a coupon to my friend and you're sort of the data processor that's going to do that for me, right? But you shouldn't save my address book or even the contacts that I've selected, right? You should obliterate that as soon as you've done that task for me, because otherwise the actual data subject, in other words, the person who owns that email address, they're not the person who gave you their email address, right? And that's the place where you-

Ryan Cramer: That's the point I wanted to make sure like we... Yeah, sorry, that was the point I guess I wanted to get to naturally is, in that regards, a lot of people might say, " Oh, yeah, I can just request people's..." That's not what this is, it's not a request of getting lead gen potential contact information because they're giving you a one off option to tie to your address book in this regards, and then when they engage with that brand, they have to opt in themselves, like that next tier like the degrees of separation, that customer that's working with you directly, they give you access to those people. Until that that degree, that second degree, if you will, opts in, you can engage with them further than, " Hey, here's a referral. Or here's a reward," or any sort of offer, that this friend, this first tier or this degree of separation, thinks that you'd be interested in. Until that engagement or that connection happens, and then they engage with your brand, or opt into future marketing promotions and things like that, that's why those little checkbox boxes, anytime you give information, like your email address are very important, right? I wanted to make that distinction clear for people. It's like, " Hey, it's just a lead gen, you can just magnet and get all these unsolicited emails, and then you can start blasting them out entirely." That's not the case.

Jay Gibb: No, I would not do that, I would not suggest doing that. Yeah, these people should get basically one email from your e- commerce store that was sent by their friend. Their friend sent them something, and then that's it. No ghost profiles, no reminder emails, those kinds of things are dangerous, right? I mean, obviously, it's a spectrum, and every company's got its own risk tolerance for what they want to do, and whether or not they think they're going to get caught, and what they think the consequences might be. But the right answer is just do what the user asked you to do. I asked you to email my friend this coupon, so do that and then don't do anything else with that person. Unless they engage, and they come back, and they click that checkbox, and they agree to receive marketing emails from me, or whatever else you've got, now they're a lead now, or now they're a customer, right, and you can sort of follow the contract that you've set in place with that person. But you can get in trouble for reminding people of that. In that case, you can always remind your user, " Hey, by the way, don't forget about this referral program. Last time you were here, you sent it to three people. Have you checked on those people?" You can actually have an engagement with your existing customer to get them to do it again, or get them to sort of light a fire for you. That's different, because you've already got permission to communicate in that way with that person, they've signed up, or they've given you permission to do that, right? So it's definitely something that you need to follow the golden rule, is really, for me, when I'm giving advice on this kind of stuff, just treat these address books the way that you would want yours to be treated. And don't save them, don't spam anybody? That's just not a good look, basically.

Ryan Cramer: Absolutely. Well, in that regards, I guess my question would be... My next question will be zero hesitancy in terms of social responsibility that a customer might feel that to pull the trigger and give access to that, but to send it... For a referral program too, this is just the best guess for this customer, right, that this person might be interested in it. It could be anything from... You see it all the time with referral programs with a credit card companies or just like any sort of cashback companies, " Hey, if customer XYZ signs up, you get 50 bucks," and then they get 150 bucks or something like that. Is there ever this kind of subconsciousness that you think that people have a inner dialogue of, " I'm really afraid my friend different than me if I'm trying to gain them or try to earn something from them by having them do this for me." Is there a conflict anywhere in there? Or how do we overcome that if there is?

Jay Gibb: I think there-

Ryan Cramer: Does that make sense?

Jay Gibb: Yeah, crosstalk

Ryan Cramer: Like, " My friend might think differently if I send them, ‘ Hey, sign up for a Macy's credit card.'" And I get like$ 300 in gift cards, or something like that.

Jay Gibb: Totally. I mean, everybody's got their own sort of decision making criteria for that, right? So absolutely, that exists. I think the way that you kind of combat that is by being awesome.

Ryan Cramer: That's it?

Jay Gibb: If it's like a Macy's credit card or something, there's nothing awesome about that. That's kind of like... I don't know, that's not great, right? But if you've got a really great product, and the offer is really good, and it's genuinely good, then people are going to appreciate receiving it, right? I think it's kind of a universal truth in marketing is just be awesome and don't be scummy, and have a good product. That's the first step in getting past that mental block that you're describing. Just to get somebody to love the offer and the product enough to share it, the ones that we see doing really well are genuinely incredible products, they're really good. So we see those referral programs really shoot through the roof, and the thing we all have in common is just that level of quality, right, they're all really great. That's how you get past that initial barrier. And you're never going to get through that with everybody, some people just won't share their address book, it's just too precious, right, and they just won't do it. That's just a fact of the matter, right? We've got conversion rates that our customers can look at to see how many people actually do this. And sometimes we'll see... There's one example of a household name that we have that out of all the people that type at least, or input at least one email address into their referral field, only 5% to 7% of them month over month will use the contact picker and use their address book, right? Still 93% to 95% of the people that engage with the referral program are still choosing to type email addresses. But that 5% to 7% that chooses to use their address book are generating 50% of the referrals, because it's so much easier, because they're able to just search for somebody's name and hit a checkbox, then search for another name and hit a checkbox. And basically just sit there inside the site without leaving, and just interact with their own contacts from Google or wherever we presented it from, and just select the people they want and hit go. So that's where you get this doubling and tripling, right? It's not that we're necessarily telling you how to change your rewards and all the other sort of underpinnings that we rely on. It's once you've done that work, and you've actually got an advocate, like somebody who loves you, and really wants the rewards that you're offering, and really likes your product enough that they want to share it with their friends, giving that person a contact picker is the thing that makes them a super, high- leverage advocate of yours, right? Otherwise you're sort of spoiling or wasting the opportunity when you have that person who loves you and wants to engage, but you just make it annoying, and you make it difficult by making them type email addresses.

Ryan Cramer: That was so cool. I love that data point too, because saying what you're not doing is you're promising more people will be engaging with you, you're promising the aspect that when people do give them access to it, where you're optimizing is actually where the most of your referral points are coming from, obviously is because those people who are the ultimate loyal or brand advocates of all the people who are available, like you said, time is money and they don't want to go through one by one and type in and copy and paste whatever simplistic of it. But they're actually going to work on your behalf, almost like the word of mouth advertising. People who are just the biggest advocates, they're just constantly saying, " Hey, do you have a point..." If I had a referral proven way to shout out, for example, how much I love this platform StreamYard, if there's a way for me to just blast it out to people and say like, " Hey, I know your business and I like this product, if you're thinking about doing this, go and check it out." I would do that, or something that I feel passionate about. You're tapping into the passion of that customer and being able to utilize technology and get more out of them almost like squeezing them to the tune of, like you said, 50% or 60% more referral traffic than the traditional way of how they're using referral inaudible, more or so or less, right?

Jay Gibb: Yeah, totally. I mean, I think it's kind of a universal truth of marketing where it doesn't matter if you're thinking about your paid advertising or your referral program, or your content marketing and search engine optimization, any of those things that marketing departments have to think about. The one universal truth is that you kill your losers and you double down on your winners, right? You take whatever it is that's working for you, whatever blog posts are driving most traffic to your website, or whatever ads are getting the best click through rates, and you do more of those, right? You'd learn from those and you double down on those, right? And this is the same thing, we're talking about those outliers in your customer base that are your super fans, the ones that really are resonating with your product and with your offer for the program, and you double down on those guys, and you make sure that those people have the most incredible experience possible. And just to help you visualize what I'm talking about in terms of a UI, it's literally just like a little icon, right, you've got a field where you're already letting these people type in an email address or as many email addresses as they have the patience to type. And the CloudSponge product just is literally just a little icon that looks like an address book that goes right beside that field where it says like, "Add from address book." That's the manifestation of it in a store, but that little button, the people who choose to use that are your super fans, those are your advocates, those are the people that really want that reward or really feel like they've got a number of people in their lives that would be interested in purchasing your product.

Ryan Cramer: Amazing. Well, I like that innovative technology, like I said, you're streamlining the process, or you're enhancing a process that's tried and true in terms of marketing, it's the ads spend or the a cost, if you will, what you're getting out of it is actually incredibly low. This is something you almost can't get more out of in terms of you're not acquiring a customer, but it's an active customer that's already adding on to it. The cost that might come from it would be again, that reward or incentive. But again, that would be in theory, going back into your company, whether it's a product, or they get a discount, or it's adding on top of your acquisition costs and keeping that lower even more so today. So Jay, you probably have seen hundreds, if not thousands of referral programs, in terms of your expertise. Is there one that really stands out and is tried and true, and you're like, " Gosh, darn it, these people got it. And they literally have the best one out there." What's that brand? Or who are those brands that just stick out in your mind? You're like, " If I have to give a gold star to someone in this industry for referral program." Who is that?

Jay Gibb: Right now the one that keeps coming up... So rather than my opinion, I'll just use data. In other words, the people that come in to the CloudSponge and ask us, " Hey, I saw this at this place, can I have that too?" One that's coming up over and over and over again for the last 12 months is Morning Brew. And it's technically not-

Ryan Cramer: For someone who's not available with that, or who's involved with that brand or is familiar with it, who are they?

Jay Gibb: Yeah, so Morning-

Ryan Cramer: Oh, you're talking about the email company, right? Just to be clear, that's crosstalk

Jay Gibb: That's right, yeah. So technically, e- commerce isn't their primary business, although they do have an e- commerce store. Their primary business is being a newsletter, a daily newsletter, and their referral program, the trigger, in other words, the thing that needs to happen for somebody to receive a reward is that they get their friends to sign up for the newsletter. Get five of your friends to sign up for the newsletter, and we'll send you some stickers or whatever. They've got what's called a milestone referral program, which basically has a ladder of rewards that goes all the way from something that's digital and easy for them to deliver instantly like access to a special mailing list or something like that, all the way through like swag, like stickers, coffee mugs, sweatshirts, they change it up. But it's like this whole ladder of rewards that people can earn by being super fans and more advocates. And then occasionally, it seems like it's quarterly, maybe three or four times a year, they give away a laptop. Like a MacBook Pro, like$3, 000 or$2, 500, whatever it is nowadays for a nice MacBook Pro. And they have this program that is kind of famous where most of the time people just... There's a steady amount of referral growth and they've written about this, it's all public knowledge, I'm not sharing anything I shouldn't, it's all in their medium profiles and stuff. But every now and again give away a laptop. And when they do that, all bets are off, the numbers get crazy, right? Because people want to earn the laptop and the only practical way for them to be able to do that is to use an address book, right? If they have to type in email addresses one by one, it's just not going to happen. There's no way they can win, right?

Ryan Cramer: Right. And sorry, I was going to say for the visual audience, you can see I pulled in Morning Brew, if you're not familiar with it, I just wanted to make sure and share that real quick. But for the audio audience... We can link down to this Morning Brew, too. I found it super fascinating and super insightful, too. But even been right there in the beginning, just become smarter in just five minutes and day, and you put your email address, but the referral program itself is so much great content in terms of what you're saying. Scalability in terms of having people opt into it. And again, they have their own merchant, they're making money off of... I'm simply thinking just what advertisements and whatnot, just the content that they're putting out there. But as you can see, it kind of goes across all these different kinds of topics and solutions and things like that. The referral program, I believe is... Is it under there... Is it that friend center, that box right there? Or where is it?

Jay Gibb: The way their UI works is you subscribe, so if you type in your email address, then you'll be on their newsletter list, and you'll get an email from them every morning. And then every one of those emails that you get from them that you've asked for, shows you where you are in the milestones and gives you... Somewhere in the body of that email, that's basically the newsletter that you signed up for, has a click here to share the newsletter and earn your rewards, as a standard part of the template, right? And then if they're about to do the laptop giveaway, it'll be right there, first thing you see, in today's Morning Brew, will be an announcement of, " Hey, we're doing the laptop giveaway, don't forget, you've got this referral code, you should go use it and come to our site to do that." And when they do, they come and they see the interface on the Morning Brew site, which I don't know if you can show it right now, the only way for you to show it right now would be to sign up for the list and then get an email and then click the link from the email, I think. I'm not sure if there's a way that you can just get to the page straight from where you are right now.

Ryan Cramer: Right. Well, I'll have to inaudible, we'll have to go back to that at another juncture. But I agree with you, that's so fascinating for them to opt into. And then I like the tiered approach of you're really passionate about it obviously... So for the giveaway, and you might have mentioned this too while I was going through it, is there a level of which you have to get to even enter just something big like a laptop or anything like that? In terms of referrals.

Jay Gibb: I don't have it memorized. And they change it occasionally, I think, but I want to say that the lowest level where you get your first reward is five friends. So if you get five of your friends to sign up. And then the laptop is basically just for the single winner, right? So they'll basically crosstalk

Ryan Cramer: Just pull a friend random...

Jay Gibb: Yeah, and they'll just say for the next seven days, we're going to count how many referrals everybody gets in the next seven days, and whoever gets the most gets a laptop, right? So that's basically a competition that has a winner at the end of the day. And that's just working really well. And just to kind of go back to something that we previously talked about here and double click on it here is part of the reason why this is successful is because Morning Brew is incredibly high quality product. I know it's just another newsletter, that's how it sounds if you haven't actually read it, but like, it's its own thing, and it's a phenomenon. They created something that's getting a lot of copycats, they're basically the gold standard, and they did really well. In fact, they weren't the first person to do a newsletter referral program. I think it was The Skimm probably, which is another really popular mailing list or newsletter company, and The Hustle is another one. So those three guys like The Skimm and The Hustle and Morning Brew, they're sort of, in my mind anyway, they're the sort of the pioneers of the newsletter referral program with the milestone rewards and the contact picker and they kind of like have refined this recipe that people are starting to notice. And that recipe totally applies precisely to e- commerce referral programs as well. It doesn't need to be just for newsletters.

Ryan Cramer: Right. So if I'm a business entrepreneur and I have a direct- to- consumer platform or if I somehow have a brand or business and I'm giving rewards or incentives, again, within the realm of whatever's appropriate for them or the platform. If I don't have something like that, what am I missing out on? Is there a industry standard in which the amount of sales or amount of new customer acquisition or just spend that you're missing out on? If I were to have it versus not having it, what am I missing out on? Is there a lift in sales that you can maybe achieve from even attributing or getting a referral program? Is there a baseline or standard that, typically, you can see it lifted in this much sales if you have a referral program or new customer joining your email list or marketing list, having something simple?

Jay Gibb: Yeah, I mean, it's definitely a nonzero number, but I don't know what that number would... I don't have an aggregated number. I'm a service provider, for those people I don't often get their private numbers like that. And even if I-

Ryan Cramer: I didn't know if there was like... I guess, my question, Jay, if again, you're my go- to person on this and for this reason, if there was like an industry, across the border if it was shared publicly, I would assume it would be more of depends on the category of the company, what kind of products and services they're selling. And then also maybe for what kind of rewards they're doing. So it just really depends on what kind of marketing and uplifted... I didn't know if there was just a generic, " Hey, you can expect at least between a range of this and this lift in sales or just customer acquisition because of a referral program."

Jay Gibb: It's a good question. I unfortunately don't know the answer off the top of my head. And that's definitely-

Ryan Cramer: crosstalk commission a case study, man. We need to start it right here, we need to start asking around too, crosstalk

Jay Gibb: The kind of question that would be answered by some of the bigger players in their marketing content, the people that are actually trying to sell you a referral program, I'm sure that they all have their own numbers for that. But like I say, it's definitely nonzero, right? We see customers doing really well with them. And sorry, like I say, it's our job to help them make it better. The other side of that coin that I think is important to think about, is the customer acquisition cost angle, right? I think, if an e- commerce store is sort of segregating their customer base into acquisition channel, like, where did this person come from, right? Most sophisticated stores are going to have a paid acquisition channel, and they'll know their customer acquisition costs for like Facebook customers, for example. And in our case, the thing that people are really hoping for, and there's some great success stories around, is getting that low customer acquisition cost that sort of beats those paid apps, right? That's cheaper than Facebook, because the cost is the reward. And if it's a double sided reward, you have to add both of those sides together. But companies that actually have those metrics, and they are basically comparing the cost of acquiring customer through the referral program against the cost of acquiring a customer through paid ads, or whatever other channels they have, I tend to see those guys seem to do better, the ones that are sort of data driven, and have those metrics and bring that stuff up in a conversation are the ones that are usually doing really well. So I highly recommend people having a good dashboard where they can actually see their acquisition costs in sort of a averaged way.

Ryan Cramer: So for people who might be doing this on a direct- to- consumer level. Obviously, for Facebook, if you're not familiar with Facebook's referral program, it can be anything from you as a outside influencer, I can go out and I can actually refer people to use specific product listings, and I get a kickback from it. Those are typically in the influencer realm, or somebody who just passively has a good audience and post something that they, excuse me, post something like, " Hey, I purchased this and it was really cool. If you're interested, here's a link to it." I mean, it's not a lot of kickback. But it can be anywhere from 1% to 10%, I would think or it depends on the category and the scale of which you're doing that. What referral programs and companies, you say you're not those companies, but you're helping a system, who are those go to ones, I would say like top three that maybe a customer should look into if they're tying into their WooCommerce store Shopify store?

Jay Gibb: I think what you just described, I think that more is like an affiliate program.

Ryan Cramer: Sure. So you would actually even separate that out?

Jay Gibb: Yeah, I would. There's blurry lines now between affiliate programs and influencer marketing, it's kind of –

Ryan Cramer: You're speaking to the choir, or you're preaching to the choir, man.

Jay Gibb: Yeah. What you just described is kind of influencer marketing, kind of affiliate program stuff, where you talking about somebody's got a link, and I've got an audience, and they're crosstalk

Ryan Cramer: It's the closest thing to a referral program or... Yeah, in terms of that regards, it technically would be affiliate marketing by definition, because they have a link, you can track it, it's coming through a certain channel, and there's a commission tied to it, or –

Jay Gibb: There's definitely some similarities, right, in both an affiliate program and a referral program, there's a there's a unique link. That's one thing they have in common, right? I think one of the big differences with an affiliate program, it's usually an influencer that's got an audience that's putting a link in a blog post or on a social media feed or mentioning it on a podcast or whatever they're going to do. With a referral program, the person who's doing that is one of your customers, they're basically like a super fan of your brand and they're not just a person who's trying to make money on affiliate revenues, they're actually somebody that is genuinely trying to spread the word to people that are very likely to make purchases. So I think what you would see is that the funnel for an affiliate link would have a lot of top of funnel activity and the conversion rates down the funnel would be lower, right? Whereas you kind of flip it upside down almost for the referral program where you have fewer actual leads, or less sharing happening, but the conversion rate for that sharing is way better, right? Because you're talking about sort of curated suggestions from a person to somebody else that they know is most likely going to purchase this product. And so I think the way that you would do the math and sort of build those dashboards for an affiliate program versus a referral program would be quite different.

Ryan Cramer: Sure, that makes more sense. That's a good clarification into that point. Is there a good referral program that you're going to be referring your clients to, though, in that regards to make that... Now that we made that distinction, is there a referral program that you're sending people through to or using?

Jay Gibb: Oh, like I said before, we try to make kind of a careful suggestion, depending on... If anybody wants to have that discussion, they can just go to cloudsponge. com and get on my calendar, and we can talk out for their situation. Some of the ones that crosstalk

Ryan Cramer: So industry specific ones that you would refer people to, or depending on the level of which you need to do that, there's different companies for that?

Jay Gibb: Yeah. It kind of depends on their technology stack and their budget, right? If you're like Walmart, or Starbucks, or some giant enterprise brand, probably you're using Extole, and you're spending a lot of money on that. And there's also a technology stack filter that we have to consider, right? If somebody is using Shopify for their e- commerce store, then maybe Talkable or Conjured referrals are a couple of the popular ones depending on budget and other things. On the WooCommerce side, Friendbuy is really popular for WooCommerce sites. And there's a WordPress plugin called AutomateWoo that has a really great referral program wired into it that's really cheap. It's not a free plugin, but it might as well be, kind of thing. I think it's like 70 bucks or something. So there's a bunch of different ways. And that's why I kind of need to talk to the person and get a sense for how big is their store? What kind of revenues they have? Are they using Shopify or WooCommerce or Magento or BigCommerce and then we can kind of make a curated suggestion, right? But anyway, I just dropped a few names for you for some examples. And anybody who's doing the Morning Brew style, like newsletter referral program, we love Gather for that it's called, I think it's gathercustomers. com. They're basically trying to corner the market for the newsletter referral, or the like milestone newsletter referral program, like Morning Brew, because it's right now like kind of really hot, a lot of people want to duplicate that success. And so, I'm happy to make those kinds of sort of consultative calls with e- commerce stores, if anybody wants to get on my calendar.

Ryan Cramer: Amazing. And I know, we were talking pre show, too, that you wanted to say, for people who are listening to this live program or podcasts, and other people who are just interested in saying, " How can I enhance this program that I have with me?" They can get through, correct me if I'm wrong again, cloudsponge. com/ crossover, correct? And they can go through that and then connect with you and your team and really consult with you in that regards.

Jay Gibb: Yep. That's right.

Ryan Cramer: Awesome. Easy enough, right? Based on the show, and everyone knows the show. They should at least if they're in the space already know Crossover Commerce, so it's easy enough checking out, and it will also be in our show notes below for you the listener. If you want to reach out to Jay... Jay, what is the best way to connect with you? If you're putting out thought leadership, are we subscribing to your newsletter? Or are we connecting with you on LinkedIn? What are those ways to do that?

Jay Gibb: Probably the best way is just through the cloudsponge. com website, right? We pride ourselves on being super approachable and getting on calls with people and just trying to be helpful. So if anybody just goes there and finds our different contact methods, if you want to talk to me, just ask and somebody at the company will redirect you to me.

Ryan Cramer: I love that. Well, thank you so much again, I know we already are... The hour has gone quick. And I know it was two days leading up to this. So it was worthwhile for me, and I hope you got a lot of enjoyment. And now obviously, friend of the show here at Crossover Commerce, just lots of great content. Even looking at your blog before this, I know you had talked about a couple cool things with even some of our competitors, which are really, really insightful, and I think push the boundaries in terms of the content you guys are putting out there. So subscribing, you guys subscribe to me. Please like and subscribe to Morning Brew. All this fun stuff that were great ideas and content in terms of enhancing your referral program. So I'm kind of my last thought before we leave today. What's kind of your focus and what's intriguing you as we go into the remainder part of the year? Is it trying to utilize your team's technology to help people garner more information from people like gathering those contacts and helping them grow in that regards? Or what's that mean focus, if you will?

Jay Gibb: For the rest of this year the focus is on creating helpful content for us. What we've found is that people, like our leads, like our people that are considering CloudSponge and trying to figure out if it's going to solve a problem for them, they seem to really love it when we do tear downs. So when I go find an e- commerce store, and I just rip it apart, or one of those, one of the customer success people will go and just look for all the sharing features and all the things that should be there, and then we go to each one of the ones that are there and see what the UI is like, what does the email look like? What are the rewards being offered? And really just kind of rip these things apart and make compliments and criticisms basically. And the way we do that, several places around the site, and also it'll be on crossover is we have basically a scorecard, call it a checklist, workbook that anybody can download for free that is basically like they can do their own tear down, they can go and get the thing. It's like a six page PDF file. And it's got just a bunch of questions that you can answer about your own site to sort of get an idea for how are you doing, how you're doing in terms of your word of mouth functionality. Are you missing out on opportunities? And then for those things that you are doing, how good are they? For example, do they have a contact picker? And there's other things in there, they're sort of surrounding optimizing the word of mouth functionality on any e- commerce website. Then anybody who doesn't want to do the workbook can just ask me and we can get on a call together, and we can just do it together. So that's what we're doing for the rest of the year.

Ryan Cramer: Awesome, great insight, as always, and I'm just going to say hopefully before the next podcast you go on, you don't get cold feet, because I think the world is kind of upset at you for shutting down Facebook. So if you could not do that, that'd be fantastic.

Jay Gibb: No, I'm feeling more confident now.

Ryan Cramer: Feeling better?

Jay Gibb: It won't happen again. I promise it won't happen again.

Ryan Cramer: We don't buy it over here. I appreciate Jay. Again, Jay Gibb of CloudSponge. Thank you so much. Now friend of Crossover Commerce. Thank you so much for just spending some time, again, multiple days to come on and speak with our audience. I know I learned a lot, and I'm sure lots of people have lots of great takeaways from today. So thank you so much.

Jay Gibb: Cool. Thanks for having me, Ryan.

Ryan Cramer: No problem. Thank you. Again, everyone, that was Jay Gibb of CloudSponge, go and check them out, you can go to the link, it's going to be linked in our show notes as well as the comment section. If you're watching this live, or if you're listening to this, this is going to be... It's really easy. It's just going to be cloudsponge. com/ crossover, pretty easy to move forward with that and go and check them out. Lots of great content in terms of the blog, I was reading that last couple days, lots of great content that's coming out from them in terms of just referral programs in general and really multiplying. Again, what we alluded to in the title, multiplying this kind of sector of your industry, whether it's a direct- to- consumer brand that you have an existing program or you're trying to think how you can start building out brand. This is going to be one of those tools that the cost of acquisition is going to be way lower than ad spends on certain platforms. You want to make sure you're optimizing the best you can and just take advantage of it, giving great programs like we had alluded to earlier in the show, it's going to be not mimicking, but doing the best you can, just giving a kick- ass program. In the words of Jay, he kind of mentioned, you just want to do right by your customer, and this is the easiest way to enhance those loyal customers. They want to really help you out, grow as a brand, they just like the products or services that you're offering. So go and check them out at I'm Ryan Cramer. This is Crossover Commerce. This is my corner of the internet. We have one more show this week. So go ahead and stay tuned, if you would. Coming up is actually, again, not to confuse people, episode 165 is going to be here on Friday. We're going to talk with Kyle Walker of Foundry, insights to building foundation of success for brands online. They are a fantastic company that was founded in Austin, Texas. Actually Kyle used to work for Amazon in different aspects and has grown multiple brands and services over time. So I'm excited to dive deep with him and look through and kind of do it on a Friday where it's almost like kickback Friday that we typically have here on Crossover. Again, we do that almost every single week on this show. If you're not familiar with us, we go live anywhere from three to five times a week. There's a lot of content that's coming out of our corner of the internet. So if you don't subscribe to us, go ahead and do that on our favorite podcast platform. Or you can like us on social media where you can watch us live or just simply go to usa. pingpongx. com/ podcast. Get to see all fantastic episodes, again 163, now 164, obviously of everything that's inaudible in audio versions and transcripts that you might want to read through, just make sure you get all the resources that we talked about on these podcasts as well. That being said, I'm Ryan Cramer, this is my show Crossover Commerce. We'll catch you guys next time. Take care.


Ryan Cramer of Crossover Commerce talks with Jay Gibb of CloudSponge one-on-one about how to multiply the performance of your existing eCommerce referral program.


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Today's Host

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🎙 Ryan Cramer - Host

|Partnership & Influencer Marketing Manager

Today's Guests

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Jay Gibb

|Founder of CloudSponge