E-commerce stores today use the classic method for business referral to drive sales. The old tactics are in use for online businesses where the company pays people for inviting their friends. Marketers today depend on referral marketing for acquiring new customers, as it is a proven and trusted technique. There is colossal information on the service and product with recommendations and marketers can take necessary steps to gain from referrals and drive sales.
What is a Referral Marketing?
It refers to promotional strategies that encourage customer referrals with incentives involved. Organic references are common too with businesses using established referral programs. With proven results, referral marketing is a popular technique with business and their customers. With the right tactics, you can build a powerful marketing engine for business referrals.
Why is Referral Marketing Powerful?
Both referral and word-of-mouth marketing is effective and powerful for the following reasons.
- Precision Targeting: These are targeted since people know their social audiences and friends well so the brand message spreads effectively with this channel.
- Acceleration and Reach: Today the reach of the average customer is large and for those with a good social following, this becomes enormous. Consumers can determine sales by making statements online. This has increased the popularity of referral marketing in recent years.
- Trust Factor: This convinces people to buy things and in referral marketing, the pitch comes from family, friends, people you know well, news publications, testimonials, customer reviews, or influencer opinions. People trust their opinions over the generic sales pitches or advertisements, designed by brands.
Referral Marketing v/s Affiliate Marketing
You may know about referral marketing but think of ways this is different from affiliate marketing. The latter refers to a situation when the non-customers give artificial recommendations and in referral, there is a genuine recommendation from actual customers. One example of this is when companies sending products on contingency that the recipients write reviews. The companies use the method to boost the reviews and the shoppers use this to compare products. Both these marketing methods are effective yet companies use only one for their purposes.
Referral Marketing Examples
- On-demand Gillette: It is a razor delivery service, and other products to meet the shaving needs of the consumers. They give incentive to their current customers with two-way discounts to share. This is for the customers to incentivize and refer the person getting the to-buy referral. Customers can use the landing page to refer to Messenger, Facebook, and email and share.
- Hyphen Sleep: This sleep solution eCommerce company sells bed storage base and mattress. They have landing referral programs, standard page fun, casual, and engaging. People feel that the company is grateful for the possible referral they give.
- Hincapie Sportswear: This eCommerce cycling apparel shop makes customized rider gears. Their referral program is unique to maximize engagement with targeted incentive. They give their customers customized cycling jerseys when a family member or friend spends specific amounts. With customization, they give unique and special products to the customers. This is the way of the company to give a special thanks to their customers for referrals. Their ambassador program connects cyclists using the gears and gives them a chance to share their experiences.
- Pink Lily: This online boutique sells clothing for women and they have a total page dedication to Pink Perks program. Their referral marketing strategy involves allowing the customers to give a discount on the first purchase to their friends. In turn, they can give the same benefit to someone else through referral.
- Postmates: This food delivery solution gives some credit amounts when your friend signs with a referral code. The customers are jumping between apps to find discounts and this gives incentive to people and they stick to the service sharing their knowledge with others. This discount benefits the food delivery solutions and you can enter the email address on the screen so that sharing and getting rewards is easy.
- Harry’s: This company manufactures grooming products and grew quickly in this highly competitive market segment through referral marketing. By setting such campaigns on the landing pre-launch page, they reached a huge audience with the number of employees growing steadily. They gave free shaving items to customers for sharing the brand.
- CBDistillery: They have a referral loyalty program incentive where you can get some amounts for certain points with every point referred to a discount. This gives incentive to referrers for sending multiple referrals.
- Dollar Shave: This eCommerce company uses this marketing strategy as a marketing video for launching their business. They create cheeky and honest videos with huge views. Many people consider this viral marketing strategy but the customers come through reference only and have enjoyable experiences through this video content.
How to Implement Referral Marketing for Your eCommerce Business?
The implementation of referral programs is a natural choice for some industries like retail but other sectors benefit from the use of such focused marketing campaigns. The referral program works as low-cost investments to improve the number of dedicated customers and leads. Best prepare the team and the company for launch with thorough planning. Besides starting a referral campaign, doing competitive research is most important. Know about the offer from your competitors and find brand opportunities to go beyond the current standards.
Achieve the desired success with the best practices to implement the referral program right.
Choice of Incentive
Successful business referral involves various rewards and a test period to experiment with these. Sometimes it is possible to be aware of the strategy that is going to work and implement it right away. Irrespective of incentives it is necessary to give referrers the referral link for sharing incentives easily with friends and family.
The simple cash offer is an obvious reward for referrals given and this does not involve additional purchase by the existing consumer. Cash is not always a good incentive for people to purchase from your store. The better idea is the offer of gift cards to make the customer return and spend more.
Both way discounts are a popular incentive in the referral marketing program. One example of this is when a customer refers another to get discounts on the first purchase, they would get the same discount once the referred customer makes a purchase. With such an arrangement both the parties are happy as it seems like lending help to a friend and benefit from the same. The check out turns faster with discounts because another person depends on this purchase to get price reductions too.
The user completes actions and refers clients to receive points and can redeem this for free gifts, discounts, and experiences. Such point systems facilitate great flexibility in the redemption method. Customers may not use the pins and this saves money for the business too.
Referring customers can get free gifts and with exclusive products, the benefits are more because they feel special. This is a good way to hook the shoppers on products as they get a chance to try new things and buy these in future once they enjoy their gifts.
Unique offers make this the best and find something relatable and desirable for the consumers. The incentive should resonate with customers so marketers survey the audience to choose rewards that motivate them. Better audience insight improves the program designs to increase the success rates too.
Offering experiences as rewards for referrals is a good strategy. A high referral number makes the gifts prestigious. The best experiences resonate with customers like a personalized class with offers. Once the customers like the products recommended, they are sure to share this with others on social media to get referrals.
The Time of Incentive Program Introduction
Once you are ready for the launch of the referral program, create content to spread the word. The referral program is a marketing campaign so promotion is necessary. Create email campaigns for engaged customers to promote the program with enticing headlines and brief program explanation that drives the landing page traffic. The repeat customers spread the word to friends and get rewards for their pains. Social media and website promotions are important and pop-ups convert shoppers into conversions. The knowledgeable employees spread the word about programs on their networks.
Performance tracking is important and close data tracking determines the success of program integration to the customer base. Identify the areas to improve, the slow consumers places to improve, or continue. Query to customers to find areas to improve and do thank them with rewards as happy customers facilitate the success of referral programs.
Top Referral Marketing Tools to Boost Your Ecommerce Sales
These are the following:
- Affiliate Post Pro
- Mention Me
- Annex Cloud
- Viral Loops
- Swell Rewards
Referral Marketing doesn’t End Here…
Referral marketing attracts new customers for businesses and works the best when you have good products that people love to use. They recommend these to others and this increases sales, customer base, and loyalty for your brand. Plan the program, pick the appropriate tool, and implement this.