How to Increase Your Sales With Referral Marketing

Guide to referral marketing

Getting your customers to trust your brand doesn’t just happen. You’ve got to earn that trust.

For a brick-and-mortar store, building trust is a little easier. People can come in to touch and feel the products before they buy. They can meet you (or your sales associates) in person. They know that you’re probably not going to scam them and they can get a pretty good idea of what type of product they are getting before buying.

But for an eCommerce business, building trust is a bit trickier. It takes time, a well-designed site, and lots of nurturing to develop.

One way to speed up the process is through referral marketing. Referral marketing, where your customers refer your product or service to their friends or family, is one of the most powerful forms of marketing.

Not convinced? Here’s a graphic that proves just how powerful referral marketing can be:Source: Referral Candy

But that still begs the question…how can you actually get your customers to refer your brand to their friends and family?

Fortunately, we’ve got a few ideas for you:

Create a Referral Program

A referral program is probably the most obvious type of referral marketing. As Referral Candy describes it, a referral program is “a deliberate, systematic way of getting people to make referrals to your business. Referral programs reward existing customers for sharing word-of-mouth and incentivise new customers to try out your brand, increasing long term revenue whether for products or services.”

In other words, a referral program is when you request a referral from your customers and offer some type of incentive in exchange for that referral.

What Incentive Should You Offer?

The type of incentive that you should offer will ultimately depend on your business. Oberlo recommends some type of cash incentive if you sell products that people buy rarely or only once (like mattresses) and coupons if you sell things that people buy more often, like makeup.

Dropbox was able to get four million users in 15 months with their referral program:

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They succeeded because they offered their users something (bonus Dropbox space) that they knew they would want. They then offered free space to the person who was referred…and asked them to make a referral too, in exchange for even more space:

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What’s even better, they give their new customers a choice: They tell them that they can get more space by either inviting their friends to sign up…or paying for more space.

To anyone wanting more Dropbox space, it’s very clear what the better option is.

Another way to incentivize people to make a referral is by starting a contest, where the person who succeeds in referring the most people to your brand gets a prize (although of course this incentive will have to be larger in order to get people to participate).

How Should You Spread the Word? 

You may have the coolest incentive in the world, but if your customers don’t know about it, then how can you expect them to participate? My thoughts exactly.

For starters, you should talk up the referral program on your website.

Send an email to all of your former customers and let them know about it. And post about the program on social media. Talk it up! Get people excited! If you’re really offering your customers something that they want (which hopefully you are), then they have every reason to get excited about it.

And don’t forget about the post-purchase referral: For all future customers, you could request a referral right after they make a purchase. Or you could request a referral a few days post-purchase (once you know that they have received the product).

However, you spread the word, make it as easy as possible for your customers to participate. As any eCommerce marketing agency will tell you, it should literally take no more than a few clicks for your customer to take that next step and make the referral.

Tell a Story

There’s a reason why most people love to watch movies and TV shows. Or get lost in a good book. A good story releases oxytocin, a chemical in the brain which helps people to feel empathy, connection and trust.

This also helps explain why people who read fiction develop more empathy for others.

And it’s why brands that tell stories are able to forge deeper connections with their audiences.

If you’re trying to get people to recommend your brand to others without any sort of incentive, then it helps to tell a story and get people to relate to your brand (Frankly, you should probably be doing this anyway).

Did your brand have a very humble beginning? Tell your customers about it. Did you get inspired to start your company while volunteering at an orphanage in Africa? Talk about it. Paint a picture.

However you decide to do it, find a way to captivate your audience with a meaningful story that they won’t forget. If you succeed in doing that, your customers are much more likely to remember your brand—and to tell the whole world about it.

Create a Shareable Product Experience

Sometime last year, I visited a dermatologist for the first time. Upon my arrival, the receptionist handed me a little packet of skincare goodies, along with a handwritten thank-you note, welcoming me to the office. It was such a nice, unexpected gesture that I’m pretty sure I took a picture of it all and sent it to some friends of mine.

That’s the power of little gestures.

Now…I know what you’re probably thinking: I don’t have the time to write handwritten cards to every one of my customers.

Luckily, there are some software applications, like Bond, that automate this for you.

In addition to thank-you notes, you should also give some serious thought to your packaging and the way that you box your products.

Need a little inspiration?

Take a look at the way that the subscription cosmetics company, Birchbox, boxes their products:

 

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From the pretty hot pink box and the hot pink tissue paper to the breast cancer awareness card, Birchbox definitely knows its audience. Moreover, the box is packaged like a gift, so the customer undoubtedly feels like they are unwrapping a gift from a good friend.

Or take a look at how the razor subscription company, Dollar Shave Club, does it:

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The brand uses humorous messaging to delight their customers. And in each box, they send a “Bathroom Minutes” pamphlet that talks about a different topic that their target audience would be interested in.

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Now that you know what to do, here’s an example of what not to do: One of my friends received a package once from a company that claimed to be eco-friendly. So you can imagine how she felt when she opened the package only to find that they had wrapped every dish towel she ordered in plastic. She vowed to never shop from that online store again.

Bottom line? Write thank-you notes to your customers. Create a unique, on-brand unboxing experience that they will take notice of. Pay careful consideration to the materials that you use and how everything is arranged.

If you create a memorable product experience for your customers, chances are, your customers will take notice—and who knows, maybe even share that experience with their friends or post about it on social media.

Create Viral Content

Another way to get people talking about your brand is to create viral content. One famous example is Dollar Shave Club’s video, “Our blades are f**cking great.” This video essentially put Dollar Shave Club on the map. And it certainly helped with their sales: Within the first 48 hours that the video went live, 12,000 people signed up for the service.

 

So how exactly did the brand succeed in going viral in the first place? There are a few things that they did well:

  • They used video (the #1 preferred content type)
  • They kept it short (users these days don’t have the attention span to watch long videos)
  • It felt authentic (and people prefer videos that feel more authentic and real, as opposed to ones that are overly staged)
  • They relied on humor to get their message across (nobody wants to share something that’s depressing or boring…especially not the young men that they were targeting)
  • They spoke the language of their audience

Not everyone can be as funny as the Dollar Shave Club CEO was in that video. And for some brands, humor like that would feel forced, unnatural and not fitting with who the brand is.

But GoPro is proof of the fact that you don’t have to use humor to engage an audience. They created a video that went viral by pulling on people’s heartstrings with a touching story of a fireman saving a little kitten:

Here’s what they did well:

  • They created a story that enraptured the audience
  • They used an adorable kitten as the center of the story (and who doesn’t love kittens?)
  • They used their product to film the video (and therefore reminded people of how their product could capture special moments like the one in the video)

The two aforementioned businesses took a totally different approach to their videos, but they both went viral because they have one thing in common: they evoked emotion in their audience. They connected with the viewers. In short, they were videos that people wanted to share.

Provide Exceptional Customer Service

Last month, I had a pretty bad experience with Uber. I had just arrived at the airport (at around 1AM); I was exhausted and ready to go home. So, like I had done many times in the past, I called an Uber to come pick me up.

I tried to find the pickup location of my driver, but by the time I arrived there, the driver had already left. I was charged $6 in cancellation fees. I was annoyed…but called another one.

This time, I was waiting in the designated pickup spot for my driver from the very beginning…but he never showed up. And I was charged $6 again.

I complained to Uber about these fees and explained the situation, but they refused to reimburse me (claiming that it was my fault, not the driver’s). They even stopped responding to my emails in the end.

Up until then, I was a very loyal Uber rider. But after that experience, I deleted the app from my phone and have vowed to myself that I will never take another Uber again if I can help it. I’ve told some friends and family about my experience and will continue to spread the word about what they did.

They lost a customer for life. And to think that it only would have cost them a measly $12 to reimburse me.

One guy who got banned from Airbnb for no real apparent reason wrote an article about his experience that went viral, with people commenting that they would never use Airbnb again because of that one man’s experience.

Both examples demonstrate just how powerful one customer’s opinion can be—and why positive customer experiences are so important.

So how can you turn your customer into advocates for your brand?

Take a leaf out of Zappos’ book.

I’ll give you one example out of many of how this online shoe and clothing retailer succeeds in wowing their customers: One woman called Zappos trying to return some shoes she had bought. The gift had been for her father, but he had recently died, so she had no use for the shoes anymore. The customer service representative told her to not worry about returning the shoes and said that he would refund her the money. But the story doesn’t end there. The customer service representative then sent the woman a bouquet of flowers.

I can imagine that the woman who received those flowers not only became a Zappos customer for life, but continues to tell people about that experience to this very day.

So even if it ends up costing your company money to do so, provide your customers with not just good, but remarkable customer experience. Go above and beyond what you are expected to do.

In exchange, you will have lifelong brand advocates. And that will make up for any money you may lose along the way. Guaranteed.

Conclusion

Your customers have the potential to become the biggest promoters of your brand. A referral program is a great way to encourage that. But in order for that sort of thing to happen naturally, you’ve got to truly delight your customers.

If you have a unique, innovative product, then that’s great. But it’s still not enough.

Tell a story that engages your audience.

Create a shareable product experience.

Provide your customers with exceptional customer service.

At the end of the day, the key is to really wow your customers. It’s really that simple.

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