[Benchmarks] 📊 2 most important referral metrics

The #1 goal of every referral program is ... wait for it ... referrals!

No surprise there, but raking in referrals on day 1 after you launch your referral program is an unfair expectation.

• Not every happy customer is going to share on that day

• Not every friend trusts their friend’s recommendation

• Not everyone is "in market" to buy or try something new the same day they hear about it.

Even if the message reaches their friend, the product/service shared may not be an immediate need. The decision to engage with your company may take a lot of consideration vs. just being an impulse buy.

So if it takes longer to see the results of a new referral program, how can we predict its success? By measuring the following leading indicators!

Leading Indicator #1: Shares - Are people telling others about your business?

Understanding how people share, where they share, and the behavior leading up to the share tells you if people are engaging with your referral program. If not, then it shows where you can make improvements.

Leading Indicator #2: Reach - Is what is being shared, getting clicks and resonating?

Reach is the result of a successful share. It shows the impact of the share and how people engage with the message/experience. If your program doesn’t have sufficient reach then you’re not going to get referrals.

If the share doesn’t happen, you don’t get any reach. If you don’t get any reach, you don’t get referrals.

It’s that simple. You need both to get referrals.

🔗 Data Insights - Shares & Reach

Shares and reach represent each side of the referral process and are strong indicators of referral program success.

Looking at aggregated platform data from the first ½ of 2024, we try to answer questions about sharing and reach with data.

How do people share?

First, let’s define a share. A “share” is the number of times someone shares your business/offer.

While we can’t have a perfect set of data to see how everything is actually shared (we’d need access to all these platforms and private message information), we can measure how people want to share based on the actions they take.

Looking at the different share methods people select, we start to understand wider sharing behaviors and shifts over time. Share methods include copying and pasting a link, sending an email or SMS, posting on social, etc.

What is the source of the share?

Through our platform, we can see where people are sharing from. This data is more accurate than the share method, but remember it’s a set of our own aggregated data, so it may not tell the whole story on referral program sharing sources.

Here’s how we define share sources:

• The “device” is where the person shares from (mobile or desktop)

• The “medium” is the source where the share happened (share widget or email)

• Share widget is when someone shares from the Member Portal or other embedded experience.

• Email is when someone shares from an email sent by Referral Rock (i.e. monthly summary email or member email campaigns)

How many people do shares reach?

Our platform shows the number of page visits from unconverted and converted referrals. We look at unique visitors clicking on a share link and being directed to your referral page (or website).

“People Reached” is the number of people reached by a single share (it divides the total number of people reached by the number of shares).

How many referrals should I expect?

Referrals are those who identify themselves (i.e. provide contact information) by completing an action on your website or referral page. But looking at referral data in aggregate is meaningless as every business is different. Instead, we want to understand the number of referrals per share.

“Referrals” is the number of converted referrals by a single share (it divides the total number of referrals by the number of shares).

Interesting insights

Looking at the share and reach data, we see several interesting takeaways:

• Posting on social media is still common but people prefer to share via more direct channels (i.e., Email and SMS) or through untracked ways (i.e. Copy to Clipboard)

• More people shared from desktops than mobile devices - this was surprising as the last time we ran this analysis (end of 2022) mobile sharing was 57% of all shares

• 30% of shares come directly from emails - highlights the importance of ongoing member engagement as most of the emails are post-launch

• 13 people reached for every share is significant and shows the impact of online share methods and likely the result of power sharers

• 0.9 referrals per share is great, roughly 1 share = 1 referral, confirming that shares are a good indicator of program success

📈 How can I increase shares & reach?

These benchmarks help understand trends and commonalities but ultimately the only way to get more referrals is to increase the sharing and reach of your program.

More sharing

A low amount of shares is almost always tied to a lack of program promotion.

• Actively promote your referral program across multiple channels including both direct and indirect promotion (see blog article on 22 ways to promote a referral program)

• Engage existing sharers and remind them to continue sharing

• Review Referral Funnel for Joined Members and Engaged Members for additional ideas

Increase reach & referrals

Low reach (given you’re getting shares) can be addressed by analyzing your program in these ways:

• Improve your share message (i.e. people are sharing but no one is engaging with the messages)

• Improve your referral page and/or referral offer if reach is high but referrals are low

• Review Referral Funnel for Referral Visits and Referrals Added for additional ideas

Monitor leading indicators

Track share and reach indicators for each program and monitor changes over time. If one of the indicators drops, conduct additional analysis to uncover exactly what’s happening to improve that area of your program.

Referral Rock provides detailed Member and Referral behavior and engagement analytics (available today).

Over the summer, we’ll release a new analytics dashboard focused on success indicators (sneak peek below). The dashboard will contain high-level indicators (including shares and reach), let you monitor performance over time, and compare individual programs.

That’s a brief overview of referral program success indicators and how to track them in Referral Rock. We’re excited to create more data-driven content and share our unique insights.

-Mica
Head of Operations