Emily Groch
Emily Groch is Mintel Comperemedia’s Director of Insights, Telecommunications, providing omni-channel marketing analysis and competitive insights to telecom providers.
June 30th, 2015

When making a technology or communications purchase, 43% of US consumers said they sought out the opinions of others before buying. That’s more than any other purchase category, including vacations, dining out and automotive, according to Mintel’s American Lifestyles 2015 report. Respondents were also more likely to share an opinion about technology or communications purchases they had made than about purchases in most other categories. With consumers frequently looking to others for opinions before making technology or communications purchases, and a likelihood that consumers will share opinions about their purchases, telecommunications providers have greater potential than other industries to drive successful word-of-mouth marketing through a customer referral program. To that end, refer-a-friend (RAF) efforts are commonly observed across the industry, with providers offering anywhere from $25 to $100 per referral. RAF programs that encourage customers to refer multiple friends or family members have driven the greatest interest among customers, by offering the potential to earn several hundred dollars through multiple referrals. Additionally, consistent marketing to remind customers of referral opportunities seemed to lead to a better customer response.

Sprint’s email marketing efforts offer a clear example of both tactics. The wireless carrier began to heavily market its RAF program through email this spring. Averaging two RAF emails per week, the provider sent over 30 million RAF emails in March and April alone, and has continued to send multiple RAF communications each week*. These emails exhibited a 33% average read rate (the average telecom read rate is currently 31%). As Sprint continues to promote its RAF program in email, its read rates continue to average above 30%, indicating that customers have not grown fatigued by the messages.

Sprint does vary its email subject lines, but the inclusion of a $500 maximum reward remains constant, which helps drive high read rates. Sprint’s RAF program offers $50 for the existing customer, plus $50 for the referred friend, each time the customer makes a successful referral. Each year, Sprint allows customers to refer up to 10 friends, meaning they could potentially earn $500 per year for themselves. Sprint never leads with the $50 minimum referral in subject lines, instead opting to highlight the maximum reward. For example, the subject line, “Share Sprint & be rewarded: Get up to $500/year for referrals,” was sent to nearly 8 million inboxes, and generated a read rate of 32%. Sprint’s Spanish language RAF subject lines generated even higher read rates, presumably due to the language targeting. For instance, although sent to fewer inboxes, “Comparte Sprint y recibe hasta $500/año en recompensas por tus recomendaciones,” generated a 45% read rate.

One fifth of US Millennials are more likely to purchase products they see used or recommended by a friend on social media

In contrast, referral subject lines promoting a smaller incentive generated lower read rates. For example, one TV provider has featured its $50 incentive in its RAF subject lines, which have seen read rates of only 16%. In fact, looking at subject lines across both wireless and wireline providers shows that email subject lines promoting RAF incentives under $100 typically averaged read rates below 20%. If the referral incentive isn’t at or above $100, it may be best to omit the incentive altogether. Although Comcast offers up to $300 for referrals, the provider often leaves a little mystery in its RAF subject lines, but still generates strong read rates. The subject line, “Get paid for having friends,” which has been sent to nearly 1 million inboxes in 2015, generated an average read rate of 27%. Inside the email, Comcast offered $100 per referral, with maximum rewards up to $300.

High dollar amounts and consistency are clearly important to successful RAF campaigns. While most RAF campaigns, including those outlined above, encourage the customer to refer their friends through an online interface, or by forwarding an email, there may be an opportunity to incorporate social media into the mix by rewarding customers who post positive reviews. This method can be particularly influential among Millennials. Per Mintel’s Marketing to Millennials US 2015 report, nearly a fifth of Millennials said they are more likely to purchase products they see used or recommended by a friend on social media. While the method of referral can be targeted to each audience, positioning rewards in a way that suggests high value for the customer may help drive word-of-mouth marketing across all audiences.

* All email performance data tracked using Mintel ePerformance/eDataSource. Performance data as of 6/2/2015, 5PM CT.

Emily Groch is Mintel Comperemedia’s Director of Insights, Telecommunications. She provides omni-channel marketing analysis and competitive insights to wireless, TV, internet, over-the-top, and home security service providers across the U.S. and Canada.