How to Use Referral Marketing to Grow your Ecommerce Store

Referral marketing strategies

There are many benefits to having satisfied customers.

A positive experience increases the likelihood of sales later down the road.

70% of customers are happy telling their friends and family about the good experience they had with a brand. Word-of-mouth can directly or indirectly influence 20 to 50% of purchase decisions.

In fact, half of podcast listeners start listening to a podcast because someone close recommended it to them.

What I’m saying is your most loyal customers can do the legwork for you.

You might not realize this but referrals do happen on their own. And sometimes these referrals are responsible for the bulk of a new company’s growth. But such instances are rare rather than the norm. Exceptional customer service and products don’t always translate to customers singing about the features of your product.

That takes some work.

Advisor Impact’s study shows that 83% of your satisfied customers are willing to refer you to their friends.

Only 29% of them actually do.

Why?

There’s a reason behind why so few customers tell others about your brand. Why do nearly all of your customers want to share your brand but in the end only a tiny segment actually end up sharing?

I guess life gets in the way. That’s why you need to push your customers into giving referrals for you.

That’s why you need a structure, a plan to get referrals on auto-pilot.

  5  Steps To Effective Referral Programs

1. Set Measurable goals

You can set any meaningful goal with your referral program. The only caveat? Make it measurable. Whether it is you want to grow revenue, build trust and build brand awareness or even generate UGC with a loyalty program, the goal should be clear. Have a single minded determination to meet these goals.

Take stock how if any referrals are being generated. These referrals could be created through n number of ways. It could be through word of mouth, through your blog or some other means.

Involve marketing efforts to amplify that reach. When setting goals set them in the context of hard numbers so you know when you attain those goals.

First, decide how many referrals do you need to break even. What’s the ideal conversion rate for them? Once you have these numbers with you, you have a much-better view of what it will take for you to succeed with referral marketing. A clear vision makes you successful.

2. Make a list of incentives You Are Going To Offer

Non cash incentives perform better than cash incentives. That seems absurd since you hear stories of these magnificent startups (PayPal) who grew by giving cash away. For some business models, yes that might work.

But for others you have to test and see.

The best referral programs provide incentives both ways. The friend gets 5 bucks and the person who signed up too gets something for his effort.

The best thing to do is to test out different incentives and see what works best. You can be subtle about referral program or be more outgoing. If your incentives have to make an impact make sure they’re personalized.

Whatever incentives you offer make sure that you convey the benefits not through bullet points but quality photos.

3. Send Customers A Little Nudge

Sleeping Baby retails baby blankets and onesies. With each delivery, they send a postcard to buyers and request them to post a photo of their baby with the products they bought to the company’s Facebook page.

Not all customers who get the letter start jumping around and post pictures. But a lot of them do and the Facebook page has a lot of photos and comments from people who share the product in this manner.

This is UGC at its best and increases the odds of people buying your product.

The takeaway is what I hinted when starting this section. People are more than ready to share the word about your product. All it takes is a little nudge. A nudge in the form of an email that’s commonplace may not work. A bigger chance to get people talking is to find out a better way to incentivize them. To go out of your way and be creative in terms of the nudge you can deliver. There are many more ways to drive engagement with social media channels.

You can post UGC to your website as testimonials. That’s one great way to increase product page conversions.

4. Provide Exceptional Customer Service And Buying Experience

It simply boils down to a single thing. Is the product is worth sharing with friends and family? Nobody’s going to share something that hasn’t worked for them.

That’s the fundamental aspect that drives referrals turning ordinary customers into loyalty engines.

A good example is TrunkClub.

Even before the customer has had a chance to use the product, he’s wowed by the product experience. How?

Trunk Club creates a fantastic first impression beginning with the unboxing experience.

The packaging is swanky. And it’s an experience worth sharing. No wonder people take photos of the package and post it on Instagram and Facebook. Along comes a handwritten note that goes further into displaying personal care.

In addition, customers of Trunk Club post dozens of unboxing videos on the internet – turning into free promotion for them!

5. Make Your Products and Product Experience Sharable

Unboxing experiences aren’t the only way to encourage people to share the word about your brand. Unboxing videos cannot be a choice in many cases Not everyone sells physical products. Even if they do, unboxing isn’t idea for say a restaurant. Or an eCommerce store that sells multiple products sourced from different companies. A visual brand marketing strategy lies at the heart of all successful brands.

There’s still some scope of creativity.

Boufe Boutique Cafe, ties in a unique dining experience to wow customers. They make the experience shareable by allowing customers to create their own cakes.

It’s simple. To the point where it can seem absurd that the experience works at all. But, it does. And it encourages hundreds of patrons to promote the brand and get word of mouth traffic to them.

When it comes to your own business you can make your product experience shareable with your blog. Post lots of colorful images. Use free infographic tools like Visme to post engaging infographics. Make use of visual storytelling to convey who and what your brand is and make people remember.

Concluding thoughts

If you have a referral program, make it easy to discover. Tucking it deep inside some category page where no one can find it isn’t the best thing for you program. Only when people see it do they decide to sign up and share the word about your business.

Otherwise no one’s going to see it. THey’re not going to talk about it. All the hard work will go down the drain.

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