In its initial stages, Dropbox, a file-sharing service, rewarded its customers with extra file space for each referral. Here both the referrer and referee get 500 MB of extra space. They had over 2.8 million referrals in the first 18 months. No matter which industry you are in, having an excellent referral marketing strategy can do wonders for your brand.

What is referral marketing?

Referral marketing is all about increasing your sales with the help of word-of-mouth recommendations from your existing customers in lieu of referral rewards. It has the potential to convert your regular customers into brand advocates and also helps you gain access to a new set of customers.

Benefits of eCommerce referral marketing

Most eCommerce companies don’t indulge in referral marketing as much as they should. Why? Because they are not aware of the benefits and end up using techniques like paid ads, influencer marketing, social selling, etc., which might not offer as much as referral marketing.

• They are more cost-effective than other marketing techniques. Most ad campaigns come with results that aren’t guaranteed. They are also expensive, but referralmarketing incentives are only given when there is signup or purchase.
• When customers are offered incentives, they are more likely to go out of their way to tell their friends and family. The recipients of such recommendations will also look at your brand in a positive light because of the glowing remarks your customers have about your brand.
• If someone hears positive comments about your brand from someone they know, the chances of them purchasing from you increase.
• Customers who get referral incentives are more likely to remain a customer for several years and even make repeat purchases.
• By working with sophisticated referral software, you will be able to easily track several aspects of the program, right from the number of orders placed, the number of customers referred, money made from referred customers, and so on.

Too eCommerce referral marketing strategies to use

Choosing the right incentive

Referrals should be incentivized. Without the right incentives, your customers will not feel like lifting a finger. Why should they? The only reason why referral marketing usually works is that people get something in return for each referral they make. This is why choosing the right referral becomes important.

The best incentives are those that are relevant to your customers. For example, an upgrade or a discount would be welcomed by customers who love offers. But the same cannot get luxury customers enthused. The incentive you choose should also be something that you can give away at scale. It should be something that doesn’t cost you a lot of money or take up countless hours.

The incentives you offer can be in the following forms: freebies, cash, discounts, upgrades, discounts, experiences, points, etc. The levels of incentives should be different based on the number of referrals the customer makes.

Email referral marketing

Marketers know that email gives you one of the best ROIs when compared with every other channel that you can use. You get $36 on every $1 you spend. Here’s what you need to do. Create a referral program and email it to customers who have purchased from you. Send emails to your old customers as well and offer them rewards to buy from you again.

Emails are a bit more personal and reliable than most other platforms– and referral marketing can fit right into your marketing campaigns. It is easy to quickly add details about your referral campaign to the emails you send out to customers.

A quick link on the signature or CTA at the bottom of every email is a great way to remind people about your referral marketing campaign.

Create a community

A community creates a feeling of belongingness. It is a way to offer excellent value without spending hundreds of thousands of dollars. If used rightly, a community of your users can be your biggest advocates. They can help with spreading the word about a new product to critiquing your latest feature additions.

Here’s how you can use a community to build your brand:

• Build great content for your eCommerce referral marketing strategy. Your community users will be more than happy to be a part of it.
• Encourage customers to share their experience (user-generated content) with your brand as a part of the referral strategy. It could be one of those tasks that customers must indulge in to get the perks of the referral program.
• Use the community to ask each other for help, ideas, maintenance, and how to get the most from the products you sell.


Leverage social media

Each of us is guilty of spending almost two and a half hours on social media, lazily browsing and sharing posts. eCommerce companies should use this to their advantage by sharing posts on social media about your referral program. Most people don’t open every email that they get, nor do they notice pop-ups on your site. This is why you must add one more channel to the mix, and we know how effective it is to grab the attention of people.

Make it easy for customers to share about your referral program and its benefits. It will increase the chances of being seen by more people.

Streamline your referral program with referral software

Like most things online, dreaming of incorporating a referral campaign without the right tools can be a nightmarish experience. The prospect of creating a feature for referral marketing is a complete waste of time. Why build it from scratch when there are tools for it?

Using referral software makes it easy to design a referral program whose efficiency can be measured and tracked for future improvements. A referral software like 99minds would make it easy to distribute referral links and offer rewards for successful referrals.

When you use the right software, it will also nudge people to sign up for your platform, send automated reminders, and so on. It will also help you collect relevant data about your referral marketing program, making it easy for you to find what is working and what isn’t.

eCommerce referral marketing mistakes to avoid

Making the right referral marketing strategies can help you get good rewards. But if you commit mistakes that aren’t supposed to be a part of your referral strategy, it will spell doom. Here are a few costly mistakes that can be avoided in youreCommerce referral marketing implementation.

• Offer the same clear reward for every customer, and make sure it is consistent too.
• Ensure that the rewards are relevant to your target customers. Poor incentives can be bad for your brand.
• Make sure that the content to describe your referral marketing is simple and clear to read and understand. Avoid jargon.
• Keep promoting your program on multiple channels. Most customers wouldn’t know that you have a referral program until you tell them about it.
• Do not create your own referral program from scratch. It’s more time-consuming, expensive, and can be a nightmare if you don’t have a dedicated tech team for it.
• Make sure you assign KPIs to track the effectiveness of your referral program.

Wrapping up

There are immense advantages to adding a referral marketing software to your marketing stack. From building brand awareness to getting new customers, referral marketing is the kind of activity that has multi-pronged benefits. It is a time-tested and proven strategy to fatten your bottom line. We are sure that the pointers above will help you create successful eCommerce referral marketing campaigns.

If you are looking for referral marketing software that will fulfill all your campaign needs, here’s 99minds for you. Get in touch with us to understand how you can create a referral marketing strategy that keeps on giving.