Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How a Pet Food Brand Uses Referral Emails to Drive Repeat Purchases
Transcript
- Lucas: There's a premium pet food brand — I'll call them FreshPaws — that started with a classic direct to consumer problem: customers loved the product, but most of them only bought once. Luna: The one-and-done. That's brutal for any subscription business, especially when your cost per acquisition is high. Lucas: Exactly. Their customer acquisition cost was around $60, and the average first order was about $45. So they were losing money on every new customer until that second purchase. And the repeat rate after 90 days was only 28 percent. Luna: Ouch. So they needed to get those people back, fast. Lucas: Right. And they tried all the usual things — discount emails, win-back SMS, a loyalty program. But the channel that really moved the needle was referral emails. And not just any referral program — they completely rebuilt their referral email sequence. Luna: What was different about it? Lucas: So originally, they had a simple referral link in a post-purchase email — 'Refer a friend, get $10 off.' It generated a few referrals, but not many. So they looked at the data and realised they were asking too early. Most customers didn't feel strongly enough about the brand after one purchase to refer anyone. Luna: Yeah, you need some kind of emotional buy-in first. With pet food, people get attached after they see their dog's coat improve or their cat's digestion get better. Lucas: Exactly. So they shifted the referral ask to after the third delivery. By that point, the customer had been using the product for about six weeks. They'd seen results. And the referral rate jumped from 3 percent to 11 percent. Luna: That's a massive lift. And what about the reward structure? Lucas: They made it a two-tier system. The referrer gets $15 off their next order, and the new customer gets $15 off their first order. Both discounts are only redeemable on orders over $40 — so the new customer has to hit a minimum, and the referrer has to place another order to use the credit. That's smart because it drives a repeat purchase from both sides. Luna: And it prevents people from just gaming the system with tiny orders. Lucas: Right. And the emails themselves — they tested a few different approaches. The winning version was a two-email sequence. The first email goes out three days after the third delivery. It's from the founder, with a subject line like 'Help us feed more happy pups' — super warm, personal. Then if they don't click, a reminder email goes out five days later with a more direct message: 'Your friend deserves the good stuff.' Luna: Interesting. So it's not just one and done. They're giving people a nudge. Lucas: Yes. And they also personalised the referral link to include the customer's pet's name. So when someone clicks the link, it says something like 'Luna's mom thinks you'll love this.' That personal touch increased click-through rates by about 40 percent compared to a generic link. Luna: Oh, that's clever. It makes the recommendation feel more authentic. You're not just a brand saying 'refer a friend' — it's your friend's pet saying it. Lucas: Exactly. And the results were pretty impressive. Within six months, the repeat purchase rate among referred customers was 34 percent higher than customers acquired through paid ads. And the customer lifetime value for referred customers was about 22 percent higher. Luna: That makes sense — referred customers come in with more trust. They've already heard about the product from someone they know. Lucas: Right. And the brand also tracked something called 'referral virality.' They found that about 8 percent of referred customers went on to refer someone else themselves. So the program had a compounding effect. It wasn't just a one-time boost. Luna: That's the holy grail, right? A self-sustaining acquisition channel. Lucas: Yeah. And the cost per acquisition through referrals was about $18 — compared to $60 for paid channels. So even though they were giving away $15 discounts on both sides, it was still dramatically cheaper. Luna: And I imagine the retention on those referred customers was better too, because they were already primed to trust the brand. Lucas: Absolutely. Their 90-day repeat rate for referred customers was 67 percent. That's more than double the 28 percent they were seeing from other channels. Luna: So if our listeners are thinking about implementing something like this, what are the key takeaways? Timing, personalisation, and a two-tier reward? Lucas: Those are the big three. But I'd add one more: test the reward size. FreshPaws tested $10, $15, and $20 discounts. The $15 offer had the best conversion rate. $10 wasn't enough incentive, and $20 didn't increase conversion enough to justify the extra cost. Luna: Good point. It's easy to assume bigger is always better, but you need to find the sweet spot. Lucas: Exactly. And one more thing: they made the referral link easy to share. It wasn't just email — customers could text it, post it on social media, even print a QR code for their dog park. Luna: So meeting customers where they are. That's smart. Lucas: Yeah. And the brand also added a small gamification element — a progress bar on the referral page showing how close you are to unlocking a 'super referrer' status, which gives you an extra discount after five successful referrals. Luna: Oh, I like that. It turns referral into a game. And people love status. Lucas: They do. And it worked — about 15 percent of referrers reached super referrer status within the first year. Luna: That's a solid community-building tool. And it keeps your best customers engaged. Lucas: Exactly. So that's the FreshPaws playbook. Timing the ask after the third delivery, two-tier reward, personalising with the pet's name, and making sharing frictionless. Luna: And the numbers speak for themselves. I think a lot of brands could apply this — not just pet food, but any product where there's a trial period before the customer becomes a true believer. Lucas: Yeah, and honestly, if that insight — timing matters — sparked something you could use, that's the kind of thing that makes this show worthwhile. If today was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Luna: Yeah, it helps us keep the podcast ad-free and focused on the data. Lucas: So to wrap up: referral emails aren't just about getting new customers. They're about creating a loop where your best customers bring in people who are more likely to stay. Luna: And that's the kind of retention marketing that actually builds a brand. Lucas: Exactly. Thanks for listening, and we'll see you next time. Luna: Take care.