How to Use Referral Marketing to Boost Ecommerce Sales

  • — July 9, 2018

    We trust people we know and listen to their recommendations. This is why word-of-mouth is one of the most powerful marketing strategies though it can be difficult to develop. But with a referral program you can reward your customers who recommend your business to others, in fact, according to Reward Stream, 86 percent of companies who had referral programs experienced more growth over a two year period.

    It can seem daunting to create a referral program from scratch and you’ve got to find out what will work best for your business. So let’s talk about how to use referral marketing to boost eCommerce sales.

    Set up a referral program and decide your rewards.

    Before setting up a referral program for your business, you’ve got to decide what your goal is and what actions you’re going to be rewarding. You can set up your referral program in two different ways: You can reward a referral for a purchase of a specific product or you can reward customers who recommend your store in general.

    If you sell only one main product, rewarding for a purchase is probably your best bet and companies that sell many different products would probably see more success by rewarding general recommendations.

    The next step is to decide what the rewards will be for those who refer. Rewards are usually cash: given in the form of coupons or discounts. You could also offer free swag or loyalty points but keep in mind that Ambassador found that 77 percent of Americans prefer a cash incentive vs. swag.

    Remember that your reward has to be worth it. Customers will be less willing to use your referral program if the reward is sub-par.

    Make it easy for customers to refer.

    It needs to be as easy as possible for your users to refer you to a friend because if it’s too difficult they’re not going to bother. If a customer can recommend your business to their friends with just one click, you’re bound to get more referrals.

    Dropbox has a referral program that is legendary. Their refer-a-friend program offers extra, free space for their users who recommend them to a friend. This strategy permanently increased signups by 60 percent and they went from 100,000 users to 4,000,000 users within 15 months using referral marketing.

    The company gives users a variety of simple ways to invite people including sending an email, sharing on social media and the ability to copy a link to share anywhere they want.

    How to Use Referral Marketing to Boost Ecommerce Sales

    Dropbox also allows users to track the status of their referrals via the user dashboard, making it fun and easy to promote the product.

    Promote your referral program.

    Once you’ve got your referral program set up, you want to let your audience know about. It would be a waste of your time to do all this work for the program, only to watch it fail because nobody even knows it exists.

    There are several ways you can promote your referral program so that your audience hears about it, including:

    • Emailing your existing customer list
    • Including call to actions for the program on your site
    • Displaying a popup on your website
    • Prompting customers after they make a purchase
    • Promoting the program on social media

    Erin Condren is a planner, notebook and accessories brand, they promote their referral program in the header of their referral page with a stand-out call to action:

    How to Use Referral Marketing to Boost Ecommerce Sales

    Customers are easily distracted. This is why it’s important to make it painfully obvious that they can benefit from participating in your referral program.

    How to start your own referral program.

    Now you may not know anything about coding, but don’t worry, you can still easily set up your own referral program.

    For WordPress users, you can use AffiliateWP, all you have to do is install, activate and you’re done. You can accurately track your affiliate referrals and it integrates with WooCommerce, PayPal, and other popular plugins.

    There are some cons to using AffiliateWP, for instance, it has limited reach compared to affiliate networks. If you want to quickly find experienced affiliate marketers who are looking for new products to review, a good alternative would be an affiliate network like ShareASale. It also offers automatic payouts and advanced fraud detection which AffiliateWP does not.

    Now that you know how using referral marketing can boost your eCommerce sales, it’s a great time to set up your own program. Just remember these tips and you’ll have your loyal customers acting as an amazing sales force for your business, it will be a valuable investment you won’t regret.

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    Author: Syed Balkhi

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