We had a chance to speak to Nathan Smeltzer, the owner of Powder City. We chatted about the company, their challenges and their experience with referral marketing.
Powder City is an ecommerce store for health supplements.
They sell all sorts of supplements, with categories including “Nootropics”, “Energy”, “Relaxation”, “Pre-workout” and more.
They have a team of about 40 people, most of them involved with warehousing, fulfilment and manufacturing.
The rest of the team is the office, working on marketing, legal, finance and so on.
Like all supplement stores, Powder City faces logistical and regulatory challenges.
Managing the lead times of importing products from overseas can be tough. But that’s something tonnes of ecommerce merchants have to learn to deal with.
What’s unique about Powder City is that they operate in a relatively new, unregulated market.
This has a couple of implications:
- The team always has to be on their toes for any new FDA announcements or regulations that might affect their products.
- Without regulations, Powder City has to do their own quality control. They hired an in-house advisor with a chemistry background to help vet product quality, and they also do 3rd party lab testing.
What’s it like doing marketing for a supplement store like Powder City?
- PPC is not an option. PPC for the weight loss and supplements categories are highly saturated already, so any terms they purchase would either be too expensive or too limited.
- Organic SEO helps. Powder City leans heavily on organic SEO with blogposts and the like. They also buy up other websites (blogs, content sites) in order to keep building traffic.
- Content has to be conservative. Powder City’s product pages read almost like scientific journals. They play it safe to stay on good side of the FDA. While this might impact conversions, Powder City prefers to be conservative in this area.
Why referral marketing? Trust.
Nobody’s going to risk their health by consuming supplements from companies they’ve never heard of.
Customer referrals allow Powder City to build credibility with potential customers– we’re far likelier to try something if a trusted friend says they’re satisfied with the experience.
Powder City does also do affiliate marketing, and that works for them. However, ‘not everyone has a high traffic blog or a big social media presence’ and ‘people have to know HTML’.
So there are naturally many “missed referrals”.
Referral marketing allows everybody to be a “micro-affiliate”– when it’s so easy to share and get rewarded for sharing, more people do it.
How did Powder City choose ReferralCandy?
“We searched on the Shopify app store and found you guys. Gave it a shot, worked seamlessly, saw that it worked, so we stuck with it.”
“Can you tell us about how you set up the incentives in your referral program?”
- Friend Offer: 10% off – This is consistent with the standard discount they give in other cases.
- Referral Reward: 6% cash reward – They initially gave 3% as a cash reward to advocates, and then later doubled that to 6%. This gave them a notable spike in their referral rates.
“What do you like about ReferralCandy?”
“I would rate ReferralCandy 10/10 – I really have to take a while to think about what I would improve.” – Nathan Smeltzer, Powder City owner
- High ROI: “I’m barely in the app. It’s so easy to use. It’s the least labor intensive marketing task that we have. It runs itself. For virtually no labor, I get so many sales – at least $10k this month.”
- Helps provide a great customer experience: “It’s so easy for the customer. It’s easy to share their referral links, it’s easy to collect them. Nobody needs to set up a website. It just works, and I get sales.”
- Helps build customer relationships: “I like that you can see when customers post links on social networks.”
Looking for a referral program example from another industry or vertical? Check out our Epic List of 47 Referral Programs!