 Thank you for joining today's webinar. My name is Ruming Jin. Today I want to talk about several key takeaways from building referral program at Tesla. As you may or may not know, at Tesla, Elon is very particular about limiting marketing expense to almost none, even if it can bring immediate business outcome in a very difficult time. On the contrary, Tesla relies very heavily on the product itself to grow demand, which is the reason why referral became the core mechanism of demand generation at Tesla. It may sound easy, but if you have actually spent time building a referral program, you'll know it's challenging to set up a referral program that works, especially one that works very well for a high-unit value product like a Tesla vehicle. And when disclaimer before we dive in, all of the information, graphs, pictures, data that I use in the slide today are taken from public available channels and sources, nothing from Tesla internally. So the agenda for today, I will briefly introduce myself, break down the referral dynamics and then talk about three things that I learned that are very important for building a referral program so far in my career. And the three things are relevance, reward system and iterations. Sorry, iterations. A little bit about myself. At the moment, I lead product teams at Intuit on small business payroll products. Prior to joining Intuit, I worked at Tesla on growth team as a product manager. I was a robotics researcher at Stanford University before joining Tesla. Okay, so much about myself. And before we dive into the takeaways, let's first boil the referral dynamics down to the fundamental building blocks. Fundamentally, how referral happens is an existing customer shares something about you or your product to someone new who is not your customer yet. Then the new customer got interested and went through the process of becoming your customer. As a customer of a particular product, if you firstly love the product, it normally means there is a high value delta between the product and the mainstream alternatives. Beyond that, if you secondly, trust the outcome and value of the product is replicable to other people. And thirdly, sharing the product will make you look good, meaning your friends will love it, be impressed by your knowledge, et cetera. And fourth, there's no hoops that you need to jump through to refer. And also, if you will get something, your personal value as a reward, then you are very likely to share the product with people in your life. So to summarize, this whole process boils down to high value delta with mainstream, value replicable to others, sharing will make you look good and lastly, sharing is not difficult, it's made easy. Once your good customer takes the action and a referral is sent out to your new lead, it becomes very important for the new customer to clearly see the value and be able to take immediate action. We all got a very short attention span, so it's important to capitalize before the high dopamine value drops and give the new lead a quick path to realize the value. What if the new lead drops halfway? The question becomes, how do you circle back and close loop with reminders, notifications, emails? However, if you look at the products out there, some of the products actually don't try very hard to make it easy for a new customer to realize the value. For example, if you share a Zoom meeting with someone else, that person will have to download the client site application of Zoom in order to join the meeting. This doesn't seem very easy, right? The reason why Zoom has decided to take that harder route is because firstly, they believe in the value of their product, which means even the conversion to get the value is a bit longer, a bit more tough. They are not too worried about the drop-off of their best customer who will actually retent. Secondly, having Zoom meetings on ClientApp is actually a core part of the awesome Zoom meeting experience. So you wouldn't want to sacrifice that even for the first time use. Because of the above mentioned reasons, Zoom actually intentionally made the conversion path harder which eventually worked for them. Yet now let's get to the exciting part, the takeaways. My first takeaway is relevance is key. The above screenshot that you can see is taken from a popular newsletter, Morning Brew. The Morning Brew team has consciously made their reward program to be highly relevant with their main product. There are two main benefits for doing that. Firstly, you know your customer will be very likely to like those rewards because the rewards are relevant to your main product. I mean, come on, they are already our customers that love your product. So if you build something similar to your main product, you are confident they all like it. Secondly, it doesn't distract the customers. Instead, it creates a cohesive experience along with the main product itself. Actually, in the example of the Morning Brew an extension of the main product, a premium Sunday newsletter is not only relevant but a part of their main products. And there are a lot to learn from the Morning Brew's reward system which we'll touch on later. But obviously they have done a great job building the reward program that actually is relevant to their main product. And we did something very similar at Tesla too. Over the years, as we each read on the referral program over and over again, one reward that we almost always used was the free supercharging benefits. This benefit is super relevant to Tesla vehicles, needless to say. We know this reward will be useful for our customers and it creates one cohesive experience with a Tesla vehicle itself. When Tesla wants to tune demand up a bit, what level can we pull? Any guesses? Yes, I know you are thinking about the same thing that's on my mind. Tune up the free supercharging mileage. That's correct. Over the years, we have done numerous campaigns where there is a short window time when free supercharging miles are multiplied by five times, which is you can get 5,000 miles of free supercharging by refer someone to buy a Tesla. It is because of the high relevance of the reward that make the mechanism actually work. We know if we give the customer five times the benefit, they will actually use it. They will feel it's valuable. They will feel like the value they get from this updated reward is five times as the old version. What if you can't easily find something you can make that is very relevant to your main product? Let's take a look at the example here. So I took this screenshot from a podcast website. The podcast is called Acquired and the reward they use is AirPods Pro. Pretty smart, right? People who listen to podcasts will really benefit from a good pair of earphones. And as you can see, the term relevance is a really broad term. The key of relevance is to make your referral program including the reward part lovable in the context of your main products. Relevance drives the intent to share, which means customers will be encouraged to tell more friends and family about your product, not only because they love your product itself, but also because they love the rewards that comes alongside and they want to get those rewards. Okay, so much about relevance. Let's move on to my second takeaway. What is a good reward system? The keyword here is system. And the first element that makes a great reward system is a highly achievable first milestone. We at Tesla have tried very hard to make the first milestone as achievable as possible for our owner. When you just make one successful referral, you actually get a lot. If you are a romantic person, you know what it feels like to imagine your photo operating in deep space, over 20,000 miles away from the Earth's surface. And if you prefer something that's more physical, more touchable, we have a hat for you that is signed by Tesla's chief designer and CEO Elon himself. How awesome is that? And the truth is, once you get over the hurdle of the first referral, many Tesla owners actually refer much more new buyers even than what they themselves would imagine. Making the first milestone truly achievable and attractive and the benefit is not only limited to that one referral, but to many that comes afterwards. Secondly, great referral programs, reward systems leverage the exclusiveness and the fear of missing out to motivate sharing right now. Again, here in the morning, a brew team did a solid job. If you enjoy their newsletter, you wouldn't want to miss the premium Sunday edition. The exclusiveness of this reward really drives the readers to work hard for the morning brew team. Many referral programs actually have something very special that's exclusive as well. You can't buy it even if you want. And by doing this, you reward your best customers, build up their loyalty and also align the benefits between you and your customers really well. Another interesting example that worth taking a look at is the waitlist referral trick that the Robinhood team did in the early stage of their startup journey. When you sign up for Robinhood's private beta, the system will let you know your exact position in the line. And the only way to boost your position is to get the priority access by referring more people to join the waitlist. Because of the killer value proposition of Robinhood, people actually really want to be able to use the product as soon as they can. And this attracts over a million private better signups even before they had a working product. It's been that awesome. And thirdly, great reward system capitalizes on the long tail. So what is the long tail? The long tail are those customers who refer a lot of new buyers. Those customers are the most loyal customers and truly important to your business. And for Tesla, the most expensive consumer car that Tesla has ever produced is a roaster. And we used it in our referral program. As you can see on the screenshot on the left, we have this roaster tier of reward designed for those owners who have referred in many cases over 100 people to buy Tesla. If you compare the value between 100 Tesla sales and one brand new free roaster, the reward is actually only less than 4% of the sales revenue. So this is actually not that expensive if you think about it and compare with the ads expenses for other car manufacturers. By capitalizing on the long tail, not only regular customers are motivated, even the KOLs and influencers are motivated to spread the word for Tesla. Actually someone builds a website to actually count how many referrals like the Tesla owners have made. And you can see actually there are people out there who have made a lot of referrals, over a thousand referrals. And many of those are YouTube KOLs and influencers who published videos about Tesla, about electrical cars. So this really capitalized on the long tail for Tesla. And the same story goes for the Morning Brew referral team. For a diehard fan of Morning Brew, what can possibly compare to a free trip to the brew headquarter where you can meet the folks who write the newsletters you read every day. Again, if you look at the eligible requirements, you'll clearly see that the goal of this reward is to capitalize on the long tail, not for the average people who refers. Morning Brew program designed their reward system to heavily benefit the people who referred the most. This is actually the reason why I love the referral mechanism as a demand generation tool. The most loyal customers get the most reward. And that's not only the right thing to do, but a really profitable thing to do. And that's also the reason why I think the referral program is a really good measurement of your product power. So how good your product is. And my last key takeaway here is very simple. You've got to put in the work to iterate on your referral program to make it a success. No referral program is born to be a success, at least not nearly as successful it can possibly be. There are referral programs after rolling out, looks pretty good, but all of them after iterations can be much more successful. Everything in the referral end-to-end experience should be built iteratively, including for example, the one-time campaigns, the landing page iterations, a referral home where an existing customer can see their progress and reward mileage system refreshes. The current version of Tesla referral program is the phase nine, and that's the only counting the major versions and updates. Over the years, we have done a lot of iterations on all aspects of a referral program to make it more successful. We talk a lot with customers, we read relevant tweets, and a lot of times Elon does it for us. And most importantly, rely on data heavily to find where is the problem and what is the most important problem to solve. The pie chart on the right side actually shows a rough breakdown of the time that my team spent on the iteration of different parts of the referral program. As you can see, most of our time is spent on the owner side, who refer others to buy cars instead of on the buyer side. And we spend a lot of time on refreshing our reward system. Of course, I believe every product and business is unique. Thus, you should explore your own breakdown of the time spent on the iterations. So the key thing is focus on data, talk to your customers. If it doesn't work in the beginning, keep on iterating and make it a success. All right, that's all I have to say about the takeaways I learned from my career so far, building referral programs. If you have any questions or need help, please feel free to reach out to me through the email on the right bottom corner of the screen. It may take me a few days to get back to you, but I read every email in my inbox. And my email is very easy to remember. It's a growthreferral at gmail.com. Thank you so very much for joining us today. I really appreciate your time. Thank you.