Commentary

Retailers' Refer-A-Friend Programs Vary Widely

For online retailers with limited store presence, word of mouth can be invaluable. While send-to-a-friend (STAF) programs can be useful to just about any retailer for generating viral buzz, refer-a-friend (RAF) programs appear to have their niche with some of these store-poor retailers, particularly those with higher-end products. Unlike STAF, which forwards a newsletter along to a friend, RAF programs send an email that introduces the friend to the retailer.

While I was doing research for my Send to a Friend Benchmark Study, which looked at STAF programs at 39 retailers, I came across three major online retailers that had RAF programs: Blue Nile, Drs. Foster & Smith and TigerDirect. Interestingly, none of these three retailers offered STAF, although having RAF certainly doesn't preclude having STAF as well. Even more interesting was the different way that each retailer implemented RAF.

For instance, Blue Nile sends a substantial HTML email with links to gifts in different price ranges, links to shipping, gift card and returns information, and a banner that includes links to different product categories. Blue Nile's is also the only one of the three to offer the friend a personal code that's good for a discount of up to $100 (depending on how much they spend)--and if the friend cashes in the discount, then the referrer is sent a code good for the same discount. It's a smart way to incentivize newsletter subscribers to refer their friends, and the friends to take advantage of the referral discount and try out a retailer with which they may be unfamiliar.

In contrast, Drs. Foster & Smith sends a brief text-only message, which the sender can edit if they wish: "I was just on the www.DrsFosterSmith.com web site and thought it might be one you'd like to visit. They have a huge selection of pet products and good information." Besides the link to their homepage, there are no other links. I think this is a missed opportunity to better convey the benefits of shopping with the pet supplies retailer.

TigerDirect takes a very different spin on RAF, using the program not to convince people to shop at their Web site, but to convince them to sign up for their newsletter. Because of this, their RAF program is clearly in lieu of a STAF program. In fact, what the friend receives is the tail end of a double opt-in process. When I did my Retail Email Subscription Benchmark Study last summer, I found that TigerDirect was only one of two major online retailers (Lowe's was the other) that used a double opt-in subscription process. So with their RAF program, the referrer is actually signing the friend up for TigerDirect's newsletter, and the message that the friend receives is a modified version of the email asking the person to confirm that they want to subscribe.

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