Recognizing the power of personal recommendations, Beach-
body launched a direct sales initiative called Team Beachbody
in which people earn a revenue share on products that they
market to their friends. CEO Carl Daikeler explains the program
on the Beachbody website:
“Instead of doing the obvious thing and selling our hit in-
fomercial products through retail stores, we asked a handful of
our customers to become independent distributors,” he explains.
“We call them coaches, but they’re not fitness or nutrition ex-
perts. These are people who simply love the products, and love
Refer-a-friend programs have become a popular way for busi-
nesses to plug in third-party social media solutions and incentiv-
ize their fans to share products with others.
Extole is a San Francisco-based marketing agency whose client roster includes popular direct response brands 1-800-Flowers.
com and Redbox. Its Refer-A-Friend program enables businesses
to create incentives and rewards
for their customers who share
the product with others. The
analytics and tracking capabilities
behind it make this an appealing
option to the metrics-minded
SocialBuilder is another product aimed at generating more
Facebook “Likes” through sweepstakes. The Motorcycle Super-store, a popular online retailer of
motorcycle parts, accessories and
apparel, created a sweepstakes
hoping to increase its number of
Facebook fans as well as its customer base.
In order to enter the sweepstakes, the user had to “Like” the Facebook page and then enter
a name and E-mail address. After entering the sweepstakes, the
user was incentivized to share it with friends. If their friends won
one of the main prizes, then they would be awarded $100 in
store credits. The number of Facebook fans grew from 53,000 to
107,000; and within six months, sales from Facebook increased
by 20 percent.
“The platform is starting to mature to the point where we
know it is valuable not only from a branding perspective, but
from a quantifiable, conversion perspective,” says Greg Brown,
Extole’s chief revenue officer. “This June, Facebook ad network
TBG Digital quantified the reduction in conversion costs from
marketing to Facebook fans vs. Facebook ads. The cost to convert a Facebook fan is 15 percent less than via a targeted Face-
Built To Last
A lasting relationship is built on more than the initial attraction, which is why marketers debate the long-term value of a
Facebook “Like” or a Twitter follower.
Facebook’s ad network is another way to explore the value of
social media. Facebook advertising is predicted to hit $4 billion
this year in the U.S., which is double 2010 spending, according
To help marketers set a baseline for their campaign performance, Webtrends studied more than 11,000 Facebook campaigns
and organized its findings into “Facebook Advertising Performance Benchmarks & Insights.” According to the report, click-through rates from 2009 to 2010 decreased, while the cost of
advertising increased. The average click-through rate in 2009
was 0.063 percent and 0.051 percent in 2010. The industry
norm for online display advertising, according to Google’s 2010
DoubleClick report, is about 0.1 percent.
Although click-through is
not as high as an online display
ad, Webtrends also notes that
Facebook’s top advertisers have
increased their ad spend tenfold.
Aside from the network’s exponential growth of active users,
advertisers are enamored with
the “Like” button. If an ad is
liked, then the ad is shared and it
creates new ad targets. According to the study, ads that target
friends of fans last three times
longer than standard ads.
“There are a variety of success
metrics for social media campaigns,” says Brown. “The most
popular are Facebook ‘Likes,’
number of registrations and sales.
A ‘Like’ can be particularly valuable when acquired through sweepstakes, if designed correctly.
In our case, we typically create sweepstakes in ways that allow
our clients to obtain E-mail addresses and even physical ad-
dresses in some cases as a prerequisite to enter.”
In addition to marketing and direct sales, social media pro-
vides a unique opportunity to immediately react and engage
with customers when they give positive and negative feedback
publicly via Facebook or Twitter.
“If customers choose to provide feedback on Twitter or Facebook of any kind, brands should absolutely respond,” Brown
says. “Ignoring or deleting the feedback is highly discouraged,
as it sends a message that dialogue — which is the whole point
of these channels — is not welcome. The best approach is to
professionally and promptly acknowledge the input where it was
submitted and take the more detailed conversation offline to
best resolve the situation.” ■
Companies like 1-800-Flowers.com and Redbox are utilizing
“refer-a-friend” programs to build social media buzz and
create new sales.