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Referrals Strategy
Referrals Strategy
0
Octubre 2020
A successful Referidos’ program could have HUGE economic benefits
What? Strategy that incentivizes existing customers to recommend you to their own network. This can include their family and
friends through to anyone they see on social media looking for a product like yours.
Why? Referral marketing was rated the most effective tactic used by marketers at all stages of the sales funnel, as new
customers earned via referral have pre-established trust in your brand:
In Muni, Valid Referral
● 84% of people trust recommendations from people they know CR from Lead to
Purchase was of 23% as
● A word-of-mouth impression drives at least 5x more sales than a paid impression
of June 2021
● Customers acquired through word-of-mouth spend 2x more and make 2x as many referrals themselves
● Referred leads convert 30% better and have a 16% higher lifetime value than leads acquired via other channels
● 84% of B2B buyers begin the buying process with one
● Referral Gap: 83% of satisfied consumers are willing to refer a business but only 29% actually do so
Who? Muni’s B2B2C model means we have multiple member get member dynamics. This include: CL refers CL, FU refers
CL, CL refers FU, Fu refers FU
Successful programs share 5 key characteristics
Clearly defined ● Not usually mentioned in programs, but our B2B2C model and the associated fraud thread in Muni make this a critical piece of the
target audience puzzle
● Referral process is very simple, usually implemented through a unique link referrer provides to referral
Simplicity of
● Option to share with contacts is also an alternative! (e.g., FB, IG, Gmail contact lists)
program use
Attractive ● Attractive, sticky benefits for user which have direct impact
incentives & ● Best example are Paypal (offered money) and specially Dropbox (offered space!)
benefits
Easy to redeem ● Benefits redeemable instantly or very fast after conditions are met
benefits for all ● Transparency in referral statuses and accumulated benefits
parties
Dropbox is the case study for referral programs: they grew 3900% in 15
months leveraging a viral referral program
Current Program is based on benefits acquired when incremental conditions are met
as the referral makes its first 3 orders
● Referrer CL must have done 3 orders ● Referrer wins monetary equivalent benefit (Municreditos) on 1st 3 orders Referral
and have at least 3 associated FUs makes
● Referrer CL must live 500 meters or ● Benefit is subject to conditions in each of Referral orders
more away from the referral ● If conditions aren’t met for previous order, benefit won’t be redeemed on next order
● Referrer CL’s referrals must live 500 ● Benefit only applies if orders were made less than 30 days after 1st order
meters or more away from each other ● Conditions for each order depend on GMV and FU number
● Referral must be a new leader ● Benefit conditions change and become tougher on each of the 3 orders
(unregistered phone number) ● Referrer redeems ~30% of GMV made on orders in which benefit applies
● Stores can’t refer nor be referred ● In total, a Referrer can win upto US$ 19, if Referral meets all conditions (US$ +61 in 3
orders, with at least 3 FUs already acquired in the last order, within 30 days)
The total size of the referral benefit could reach US$40-60 – we need to align
on our level of aggressiveness
Currently up to ~US$ 20 in Municreditos for referrers who’s referrals meet all conditions. There are 2 potential ways to adjust this value:
1. Based on CAC Proxy of Top CLs 2. Based on Referidos’ economics vs other users and use of Conclusion
thumb benchmarks
Defining TOP CLs as 5 orders in < 60 days, if we consider Real Muni Data:
May-Aug, and isolate buyer type to network: It would be reasonable to spend
● 23% CR from Referral Lead to Purchase until June, aprox. 60% higher 1,6x on referrals acquisition
● 29-48% of leaders globally would be top than average CR (14% CR from registration to purchase last 3 weeks) from the CAC point of view.
● CAC would be US $ 170-400 ● AOV of referral of US$ 54, +20-25% than average CL This would be aprox. ~US$ 50
● Value is very very high since we are dividing total spend ● Similar retention to average user (marginally lower on 1st and 3rd months,
into a very small handful of leaders though considerably higher in 2nd month) We could add on-top incentive
● There is country and cohort level variation of a % of the additional US$ 60
This translates into: GMV based on a target margin
Problems with this approach: (lets say, 15%), which could give
● Referral CAC could be 60% higher than normal CAC due to better CR. us another ~US$10
● What we paid historically is not necessarily what we should Considering a target CAC of US$ 5 and current CAC of US$27-32, it
pay or what is profitable for Muni would be reasonable to spend now US$ 50 on referidos, and ~ US$ In total, it would make sense to
● Values are excessively high, so setting up a reasonable aspirationally spend US$ 40-60 in referidos.
target would be a guess ● Additionally, 20-25% higher AOV translate into US$ 10 / order; We should decide upon degree of
● % of Top CLs within Referrals is 39% on average of those Considering ~3 orders / active leader per month, this could reach US$ 30 / aggressiveness
months, vs. 34% in general cohort, so proxy is not precise month
● Considering a M1R of 55%, M2R of 40% and M3R of 25%, this could
mean +US$ 60 on GMV vs normal leader in first 4 months
Key decisions to design Referidos’ Program 2.0
Referidos’ Program Design - To Discuss Design options Non exclusive Current Program Proposed solution Product Support
Referral logic CL to CL CL to FU FU to CL FU to FU
Clearly defined
target audience Referrer 90% Referrer 75% Referrer 50%
Benefited parties Referrer 100% Referral > 50%
Referral 10% Referral 25% Referral 50%
Crisp Centralized landing Targeted messages for Targeted push App section for
Comm. channel
communication page Referrers notifications & in-apps Referidos
Benefit info.
Instantly Daily Weekly Monthly
Easy to redeem actualization
benefits
Integration in In-app status of
product Referidos
The Referidos Program could look like this
10 11 12 1
W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4
Lorem ipsum
Lorem ipsum
Lorem ipsum
Lorem ipsum
Lorem ipsum
LOREM
General Timeline for Referidos
10 11 12
W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4
Scoping con
Producto
Automatizar
tool
Alinear with
Branding
Launch one-
link
Launch
Design new in-app solution with Product Launch date tentative, still we need to review
memo and prioritize
Clearly defined
target audience
8. Simplify and automate of the
1. Design and Launch Referidos section in the App Calculation Tool
Crisp
communication 2. Define In-apps and pop-ups logic and implement in App
Easy to redeem 6. Build Referidos with Product to enable instant recognition of referral
benefits for all 7. Design and Launch referral status section for referrers in the app
parties
1. Program “virality”:
1. Economics