How referral program can help your eCommerce business

You’re reading this blog post because you want to know how referral programs can help your eCommerce business. You’ve probably seen a lot of articles about the subject, but they all seem to be written by people who never actually had their referral program and don’t understand what it takes.

I’m here to give you real-world advice on how to make your referral program work for you. Let’s get started!

What is a referral program?

A referral program is a strategy that encourages your customers to bring other people into the fold. For example, an eCommerce store might give $10 credit for every new customer brought in by an existing one.

There are other names for this marketing tactic: the discount referral model, viral sharing, social sharing, or even word-of-mouth marketing. However, the goal is always the same: you want to earn customers rather than buy them, and referrals often work better than other marketing strategies.

Is Referral Marketing Right for You?

Besides offering discounts, referral programs also tend to create a much stronger feeling of customer loyalty. This is even truer if your program incentivizes partner referrals.

Many businesses have been able to generate thousands of customers by offering a referral program. There’s a good chance that you can do it too, but there are some essential things you need to consider first:

It would be best if you generated some hype:

Your referral program won’t help you much if your customers don’t know about it and can’t use it. So, you’re going to need some social media presence, quality content marketing, or even PR support for this one.

You might want a way to qualify referrals:

If 10% of your customers bring in a new customer, you’re going to want some way of differentiating the sales. There’s a big difference between a $100 order and a $1 one!

You’ll need referral content on your website:

If you don’t have any referral option on your site, most customers won’t know what you’re offering when they get there. Instead, you should add a button somewhere that explains how it works and then provides a link to your referral program.

You’ll need a referral program process:

Have you ever signed up for something and then had to jump through hoops to get your discount? If so, then that’s probably why you didn’t use it. Make sure that your referral program is easy to access and simple to understand.

You should have a solid plan:

Ecommerce marketing is a tricky thing. First, make sure that you have a plan to measure your results and use it as a part of your overall growth strategy.

What can you expect from your referral program?

There are few guarantees when it comes to referral marketing, but here’s what we’ve learned so far:

You’re going to get sales:

Some of your referral sales will be big. Most, however, won’t be. That’s okay! Keep an eye on your total sales number, and you can see how much it grows over time.

Your customers are probably already talking about you:

People love sharing great deals. If you offer a referral program, you’re going to get a lot of unofficial “marketing” from your current customers.

Customers will trust you more:

A referral program lets people know that other people care about your business. It doesn’t have to be anything fancy — just an email or a social media post. They’ll be glad to tell their friends and family about you, and they’ll know that it won’t cost them anything.

Referral marketing is a long-term strategy:

Referral programs can be very effective, but they don’t always bring in many customers right away. Sometimes, it takes weeks or even months for your referral program to pick up steam. This means that you need to have solid financials and a plan for the future — or you need to be willing to lose money for a while.

You can get referrals from anywhere:

The great thing about referral marketing is that you don’t have to choose just one platform or network. Instead of relying on Facebook, Twitter, or Pinterest alone, use them all! If your audience hangs out in different places, then you should be there too.

You’ll need to keep your referral content fresh:

If you don’t post anything in a while, then nobody will take your referral program seriously. You can get away with this when using social media because people expect things to be more sporadic. To make sure that your visitors are reminded of your program, make sure that you have referral content on your website and updated often.

How can you make your referral program even better?

If you’ve got a referral program set up, then congratulations! That’s the hard part. Now, you need to refine it so that you can get even better results. Here are some ideas for you:

Link to your referral program everywhere:

If you’re only linking to your referral program on your homepage, then people aren’t going to find it. Instead, throughout the buying process — and even after they’ve bought something — you should link to some copy about how much money people can save by referring their friends and family.

Make more than one offer:

You don’t have to limit yourself to just one offer when you’re running a referral program. If you want more people to participate in your schedule, then give them some options. For example, a 10% off coupon might not be enough for some shoppers, but they may buy if they know that they can get an additional 5% off with a referral.

Find different creative ways to reward referrals:

Rewarding referrals are essential, but you don’t have to give people cash every time they refer someone. Instead of just rewarding with money, you can also offer free products or discounts on specific items when your customers send their friends and family your way.

Add urgency to your program:

People are more likely to participate when there’s a sense of urgency. If you set up a time limit for your referral rewards, people will be more likely to take action before it’s too late.

Make it clear what the customer gets out of referring someone:

If you want your customers to share your website, then you need to make sure that they know what’s in it for them. In addition to a reward, tell your customers what their referrals will get from experience.

Set up a dedicated landing page:

Instead of using a single referral link, create a custom landing page with different copies and pictures. Of course, diverse groups of people will respond to other things, so you’ll want to ensure that your referral page matches their interests and tastes.

Ask for help:

You don’t have to do everything yourself when running a referral program, but it can be hard to understand what you need and where you should go to get it. So don’t be afraid to ask for help, either internally or externally.

Use A referral marketing software:

With referral marketing software, your referral program will be more effective. You’ll have access to a wide range of tools that can help you build custom landing pages, track effectiveness, and much more.

These are just some of the ways to improve your referral program so that it works even better for your business. Make sure to test out a few different strategies and see what works best for you.

What to avoid with your referral program?

While referral marketing can be a great way to increase sales and get more customers, you need to avoid making these mistakes:

Being too greedy:

Asking for referrals is meaningful, but you can’t ask for people to do everything for you. By all means, try to get as many referrals as possible, but don’t overwhelm your visitors with requests or make them feel like they’re being asked to do something unreasonable. Be reasonable about the type of requests that you make of your customers.

Making it too complicated:

This sounds counterintuitive because referral marketing is all about making it easy for people to share your website with their friends and family. Still, you have to make sure that the process itself isn’t complicated. For example, if people get confused when they’re trying to send someone a link, then they’ll call off the referral and leave your site.

Not following up:

If you have a referral program in place, then you need to follow up. You don’t have to bombard your visitors with requests for referrals constantly, but if they had a good experience with your site and business, then ask them if they’re ready to spread the word.

Forgetting about recurring customers:

If you have a subscription-based or membership-based website, then you shouldn’t forget to ask your regular customers if they’re willing to send referrals your way. Even if someone is already a paying customer, there’s no reason not to get referrals from them again and again.

Not rewarding the proper referrals:

Not every customer is the same, so not everyone will benefit from being referred in the same way. Please find out how loyal someone is to your company and what they get from using it before asking them for a referral. If you don’t do this, you could end up with some confused customers unhappy with their referral reward.

Not setting a deadline:

If you want someone to act, they need to know when they must do it. If you don’t set a time limit on referrals, then people will forget about the offer and move on to something else that’s more important or relevant at that moment in time. So, you might miss out on some referrals, and that’s never good for your business.

Forgetting to measure effectiveness:

A referral program is only as good as the results it gets you, so you need to make sure that you measure how effective it is and tweaking the system as necessary. If something isn’t working, find out why and try to fix it to get the most out of your referral program.

If done right, referral marketing can be a great way to increase sales. However, when you’re making your referrals, make sure you do it precisely so that you end up getting benefits in return for your business.

Last thoughts

In conclusion, referral programs can be a great way to increase your eCommerce customer base and sales.

But before you dive headfirst into this strategy, make sure that it is the right fit for you and your business by considering all the pros and cons involved with implementing one.

We would love to help answer any questions or give feedback on how we think a program like this might work in your store!