Prose’s Referral Program CPA is 117x Cheaper Than Paid Ads

 
Prose has an in-depth online survey that asks customers questions about their hair, skin, lifestyle, location, and preferences, and then takes all of that data and provides product recommendations that have ingredients that fit their needs. They call it your formula. 

It’s that made-to-order personalization that draws Prose’s customers in. They know their hair and skin products are formulated specifically to address their needs, versus them having to go to a store and test a bunch of different products to see what works.

“It’s not just about getting new customers, it's about keeping the ones we have engaged and providing an outlet for them to share their positive experience with Prose." 

Challenge

Pulling Prose’s referral program “out from the shadows” to increase customer acquisition and retention

When Kati took over responsibility for Prose’s referral program, her first focus was pulling the referral program “out from the shadows”. At the time, their referral program was promoted through…

• Customer account pages (when they were logged in) 
• Dedicated emails highlighting the referral program, sent once every couple of months 
• Triggered post-subscriber confirmation emails, inviting customers to join the referral program

In order to better optimize the program, Kati and the Friendbuy team knew it was time to start testing their referral reward and program placement strategy.

“My main objective has always been to just give the referral program the visibility that it deserves. I think referrals are one of the most valuable pieces of marketing, especially for a custom DTC brand like Prose. Everything should be hyper-personalized, which is something that Friendbuy definitely helped us continue to build.”

Solution

Integrating their referral program into their customer communications with Iterable, and optimizing conversions through A/B testing

1) Integrating their referral program into their customer communications with Friendbuy’s Iterable integration

“Being able to integrate directly with Iterable from Friendbuy has really helped push the envelope for opportunities."

One of the first ways the Prose team increased referral program visibility was implementing it into their email and SMS marketing, using Friendbuy and Iterable’s integration. 

They have referral call-to-action (CTA) banners on every email they send to subscribers through Iterable. For example, below you can see how they’ve integrated referral CTAs in their email footers when a subscriber is one purchase away from getting a free item, as well as when they can redeem their free item. This is a great time to let customers know they can refer friends for two reasons:

1. This loyal subscriber loves their product enough to order it 10 times - meaning it’s very likely that they love it enough to refer their friends and family. 
2. This loyal subscriber will also feel compelled to refer since they are being primed with a reward.
      

Prose also sends a dedicated referral email and text to all customers - including to monthly subscribers and non-subscribers - reminding them about their referral program every month. Below is an example of one of those blasts. 

“It’s great to see how Prose is using Friendbuy and Iterable together to seamlessly incorporate their referral program into their cross-channel marketing strategy. These examples show how easy it can be to reduce CPAs and increase retention when you integrate your customer communications with the rest of your tech stack.” - Thomas Krotine, Technology Partnerships, Iterable

2) Optimizing referral conversions through concurrent testing 

Another way the Prose team is continually optimizing their referral program to increase referral conversions (and achieving even lower CPAs) is through A/B testing. 

Initially, Prose launched their referral program with a “Give $10, Get $10” incentive. They A/B tested that against “Give $20, Get $20” and found that the Give $20 incentive increased their conversion rates by 5%.

Then, they A/B tested their referral offer of “Give $20, Get $20” against “Give $30, Get $30”. Below are two emails that Prose sent to test these referral incentives against one another.

After testing these two reward structures in two back-to-back monthly referral awareness emails, the Prose team saw that though the “Give $30” offer did have a slight increase in conversions, their AOV was lower, so they continued with their “Give $20” incentive. 

Running and testing new referral sweepstakes campaigns is another way that the Prose team is continually optimizing their results. They recently ran two sweepstakes campaigns - incentivizing customers to refer friends in exchange for being entered to win 3 free months of a product in addition to both the Advocate and Friend getting $20 off. 

The first sweepstakes campaign, which promoted their custom hair care, was promoted through two emails and texts.                          

Their second sweepstakes campaign was based around Thanksgiving, or what they creatively dubbed, “Refer a Friendsgiving”. The prize for this sweepstakes was 3 months of their custom skincare products, and was also promoted through two emails and texts.                      

For both of the above referral sweepstakes, Prose rolled out the campaign to only a subset of their audience, so they were able to see the results before rolling it out to their entire customer base. 

3) Implementing referral program placements that increase participation and revenue 

In addition to adding their referral program throughout their customer communications with Iterable, Prose has also optimized their referral program by strategically promoting it with different placements on their website. 

Sitewide banner: Whenever a customer purchases, a sitewide banner appears with their refer-a-friend CTA.

Dedicated referral widget in a customer’s account page: When a customer clicks a referral CTA email or text, or logs in to their Prose account, they will see a “Refer a Friend” link in the left-hand menu, which unlocks sharing functionality. This makes it really easy for them to copy and paste their referral link or refer friends via email, Facebook, SMS or X. 

Results

With Friendbuy, Prose is seeing a single digit cost-per-acquisition that is 117x cheaper than paid ads. They’re also seeing an 8x return on their referral program investment. 

Prose will continue to collaborate with Friendbuy to find new ways to keep that CPA low while increasing the number of new qualified customers that come from their existing customer base. They collaborate closely with Friendbuy’s customer success team to innovate and implement new ideas. Kati notes that Friendbuy really cares about their success, and that their Friendbuy Customer Success Manager always comes to the table with new ideas. 

“Friendbuy has allowed us to be more nimble and to test with higher frequency without a heavy strain on resources.  Prose is excited for future tests and unlocking several outreach programs that were not available prior to our partnership with Friendbuy.”