eCommerce referral marketing

A satisfactory product leaves a lasting impact on your customers. They admire the product, write reviews, and share it with their friends & family. And that’s what opens up the possibility of eCommerce referral marketing!

Customer loyalty is the core of referral marketing. As it utilizes brand advocates or loyal customers for product promotion. It utilizes the concept of gamification to increase engagement and user experience.

However, referral marketing isn’t a new concept.

In this article, we will discuss all such referral programs that can help eCommerce business owners to boost their sales.

Let’s now dive into the working mechanism of referral marketing.

eCommerce Referral Marketing: How to Use It?

According to Jonah Berger, brands get word of mouth for 6 reasons, which have been summarized as STEPPS.

how referral marketing works

STEPPS stands for:

Social Currency

Social reputation, value, and respect all count as social currency. People want to look smart and cool in the eyes of others. If by sharing about your product, they earn social currency, they would keep doing it.

Trigger

Triggering the mind of the customer in a certain way about the product will urge them to share your products. This is where marketers use rewards, prizes, cashback, etc., and trigger the customer’s mind.

Emotions

A product that wins the hearts of your customers and gets emotionally attached to them will automatically get more word of mouth.

Public

Any product or event that is among the public will get more word of mouth.

Practical Value

How practical your products are to the consumers decides how many words of mouth they would get

Stories

People don’t talk much about the products but they talk about stories. And, if you give them a story about your products, they will definitely include them in their regular conversations.

Therefore, if your referral program gives any one or more of these reasons to the consumers, then the possibility of word of mouth would be higher. These 6 points are the core reasons behind the working of referral marketing.

On the other hand, every individual referral concept works on set goals, targeted audiences, and mechanisms. However, the reason for word of mouth remains one of the STEPPS or more.

For example, a coupon referral program.

The core concept is the same, but it is distinguished from other referral programs with its specific set goals, mode of making the referral, incentives, rewards, etc.

This video explains the complete workings of the coupon referral program for WooCommerce.

Referral marketing is found to be an effective form of marketing method. Several companies used referral marketing and transformed themselves into well-known brands in a short time. For example, PayPal, Dropbox, Uber, etc.

What Gives eCommerce Referral Marketing the Power?

But, what makes referral marketing so crucial in the present eCommerce world is the ease of doing it. The times are changing and with these changing times the marketing strategies are also evolving. The new generation believes in word-of-mouth marketing more than anything else for that matter. Imagine you have seen an advertisement for a product or service somewhere and your best friend has shared another product with you. You will definitely take the word of your best friend over some random advertisement.

For example, the points and rewards method.

Leveraging this, store owners can reward points to customers who perform definite actions, including referrals.

Others include coupon codes, in which the buyer sends a code to their friends, and when the recommended person uses that coupon code, they both get benefits.

Note: Organic referral and strategic referral are two separate things.

Organic referral or simply referral is when the consumers talk about a certain product to their family or friends motivated by the pleasure or pain they have got from the product.

Whereas, in strategic referrals, retailers use some promotional tricks or strategies to motivate the buyers to share or recommend their products to their friends or relatives. A strategic referral is what we call referral marketing.

organic and referral

Thus, we can define eCommerce referral marketing as;

A tactical way of spreading promotional messages or sale-encouraging messages by the customer’s word of mouth or through other digital sharing methods. And, rewarding them or promising them lucky rewards in return for those referrals.

Why Does Referral Marketing Work So Well?

The first and foremost reason is the trust factor. According to Nielson, 83% of people trust a recommendation from a friend.

Therefore, recommendations from friends or relatives beat all kinds of advertisements and other marketing campaigns.

Also, customer loyalty is equally important to drive the referrer’s motivation. Brand advocates present your case passionately to potential customers and convince them to purchase your products or services.

5 Must-Try Referral Marketing Strategies in eCommerce

With rising eCommerce and tracking technology, easy and effective referral marketing concepts were born.

In this section, we will see some of the top working eCommerce referral marketing ways. These methods have the potential to upsurge your sales and revenue by many folds, and therefore underestimating them can be a big mistake for your business.

And, if you succeed in implementing any of these; your sales and revenue graph will rise by a noticeable factor.

1. Collaborate With Social Media Influencers

To collaborate with social media influencers for eCommerce referral marketing, begin by setting clear campaign objectives, then identify relevant influencers aligned with your brand. Reach out with personalized messages outlining expectations and compensation, and co-create a strategy that fits their audience and your brand.

influencer marketing

Provide influencers with unique referral codes/links, track campaign performance, ensure compliance with disclosure regulations, and collaborate on content. Encourage influencer engagement with their audience, measure results, and adjust as needed. Build long-term relationships with successful influencers to foster brand loyalty, adapting strategies to evolving trends in eCommerce referral marketing.

2. Coupon Code Offers and Discounts

This is the easiest and most popular method for eCommerce referral marketing.

In this method, a coupon code is generated for a customer which they can share with their friends and relatives. And, when the referred person uses that code for signup or for purchasing the products, they both get rewarded.

The reward can come in multiple forms — discounts, offers, free plans, free delivery, and others as per the merchant’s choice.

For WooCommerce stores, the Coupon Referral Program plugin can prove to be the ultimate solution.

Maximize Customer Loyalty With the Coupon Referral Program

Implement a Coupon Referral Program to engage and reward your customers and turn them into brand advocates

3. Email Referral Program

Email marketing is one of the most preferred methods to nurture customers. Despite the soaring popularity of social media, emails are still relevant and effective.

Globally more than 330 billion emails are sent and received every day. So, it clearly is a great medium to generate sales.

According to MailChimp, the average open rate of eCommerce emails is 2.01%. However, senders of referral emails are friends and family members, which results in higher open rates and more sales.

Email referral programs do work, but it requires automation and incentivization. No matter how loyal customers are, they aren’t gonna sit behind a screen and write flavorous emails out of goodwill.

dropbox

For example, Dropbox has an email referral marketing program that offers 16GB of cloud storage for every new joiner customer brings. It’s a no-brainer setup. Users have to enter the email addresses of their friends and press the send button.

4. Organize Contests and Awards for Referral

Contest referral programs are a great way to increase the email list, promote the brand, and increase sales.

People have a natural tendency to win contests or quizzes, no matter how irrelevant the contest is. Marketers can smartly use this natural tendency and transform those participants into buyers or referrals.

For example,

imperial sugar contest referral marketing

5. Cashback And Cash Reward

Cashback or cash reward are different names for the same equation.

In such a program, the buyers get immediate cash-back or cash reward on each referral.

Many stores extend this to a new level by offering really alluring cash-back that normal people may find hard to refuse.

Consider the example of the CashKaro online store; it gives cashback on referring as well as on every purchase of the referred person.

cashback referral program

Tips for Effective Referral Marketing

Now that you know the top trending ways of doing referral marketing, how to start it becomes the frontline question.

Starting referral marketing without any strategic planning can hit your business at a loss. For that, here are some tips that you must take care of when starting referral marketing for your eCommerce business.

1. Make It a Win-Win Program

Your customers will recommend your product to their friends for some reason. Give them that reason. Be it some incentives or rewards, make sure the customer is benefitted. Similarly, the recommended person will show interest in the referred product for some reason as well.

Therefore, making the referral program a win-win program for both the referring and the referred person makes the program mutually convincing for both ends.

referral cashback rewards

2. Make Your Referral Program Noticeable

After launching your referral marketing program, don’t keep it in the dark corner of your online store.

Market your referral program on every social media platform as well as through your email list. Emphasize the offers and the benefits of referring. Clearly state the methods of making referrals at the most noticeable place in your store for visitors.

Using flash buttons, or pop-up notifications can make your referral programs more noticeable.

3. Promote your Referral Program on Social Media

Launching a referral program for eCommerce goals isn’t enough. You need to bring more of your customers to actively take part in it.

What else can be better than various social media platforms to spread awareness of your referral program?

Therefore, promote your referral program on every social media such as Twitter, Facebook, Instagram, Pinterest, etc.

Consider the example of Outlaw. They actively use Twitter to promote their referral program among possible customers on Twitter.

4. Personalize the Program

Personalization is a great way to increase the engagement of the customers.

About 79% of customers are more likely to engage with a personalized message or offer. Thus, personalized messages increase the chances of turning customers into referrals.

Further, the rate of response of the referred person also increases if the invitation message is well personalized.

5. Smoothen the Referral Channel

eCommerce referral marketing is no longer limited to word of mouth.

Other digital sharing methods such as email, Facebook, Twitter, and WhatsApp, are now common referral channels for referring friends and relatives. Thus, involve clear sharing buttons of these channels at the place of referral coupon code.

Provide one-to-one sharing options, as not everyone wishes to recommend publicly.

amuze ecommerce referral marketing

6. Research Well

Plan your moves. Making your referral marketing a hit and trial can harm your business.

All-around research will strengthen the base of your referral marketing program which will help you in making the right decision for your program.

You can take surveys to know and predict the possibility of a customer’s referring opinion. Plan out the budget you are going to put in. Examine your competitor’s referral program if any, etc.

7. Ask for a Referral at the Right Time

Asking your customers to refer to your product is critical.

Even if you have prominently depicted your referral program on the homepage of your online store, asking for a referral is a decent marketing strategy as long as you properly plan the timing.

For some programs that are strategically organized, a pre-order referral is also possible. For example;

But, for most of the referral programs, the right time to ask buyers to refer is after the purchase of the product.

post purchase popup to ask for referral

8. Timely Measure the ROI of Your Referral Program

Taking timely measurements of marketing campaigns is important to determine the campaign’s effectiveness.

And, referral marketing campaigns are no different.

Return On Investment (ROI) is the most popular metric to measure the success of the marketing campaign.

When all the input investment is lower than the total profit earned from the campaign then it is said to have a positive ROI. Such ROI is important for the growth of the business.

Conversely, negative ROI is when the investment input is more than what is earned

from the campaign. Negative ROI is not favorable to businesses. Immediate steps must be taken to convert those negative ROIs to positive ones.

Referral Marketing-Based Plugins for Festive Season

Digital referral programs shine during the peak festive hour by taking advantage of the increased consumer activity, the spirit of gift-giving, and word-of-mouth promotion. Imagine a satisfied customer recommending your products or services to their friends and family during holiday gatherings can lead to an immediate surge in referrals, as trust in recommendations is heightened.

Keeping this in mind let’s talk about plugins that help with eCommerce referral marketing seamlessly.

1. Coupon Referral Program

coupon referral plugin

The WooCommerce Coupon Referral Program offers a powerful way to engage and reward your customers for various activities on your WooCommerce store. Customers can earn referral coupon rewards by sharing their unique referral links to encourage sign-ups on your platform.

Merchants have the ability to limit how many times a referee can redeem a referral coupon which adds the element of control to the program. You can display the referral coupon code on the shop page or even create a dedicated referral tab using shortcodes, making it easy for customers to participate. The referral plugin also facilitates social sharing and email referrals, and you can tailor the content in the referral modal/pop-up window, enhancing revenue opportunities, especially during festive seasons when referral programs tend to shine.

Keeping the festive season in mind, you can use the plugin to,

  • Incentivize customer referrals during the holiday season.
  • Boosts word-of-mouth marketing and engagement.
  • Customizable rewards and messaging for holiday promotions.
  • Social sharing and email referrals.
  • Enhances the shopping experience for customers.
  • Drives increased sales and revenue during festivities.

Curious About the Ultimate Referral Program?

2. Points and Rewards for WooCommerce

points and rewards

With WooCommerce Reward Points, merchants can implement a robust referral system in their WooCommerce store. The Referral Points feature allows users to earn reward points when they refer others; for instance, if User A shares their referral link with User B, and B signs up using A’s link, A receives reward points. Admins can easily activate this option in General settings, specifying the number of points and minimum referrals needed. 

Additionally, the Referral Purchase Points feature enables customers to earn points when their referrer makes a purchase via their referral link. Store owners can configure this in General settings, choosing either a Fixed or Percentage-based reward method and setting the points or percentage to be granted for successful referral purchases. These features provide powerful incentives for both referrers and referees, fostering customer engagement and boosting sales.

Merchants can also utilize the rewards plugin to boost revenue during the peak festive rush, 

  1. Launch themed campaigns, offering increased reward points for referrals.
  2. Offer special discounts accessible only through referral links.
  3. Create urgency with time-limited referral incentives.
  4. Use festive-themed emails and social media to promote the program.
  5. Provide holiday-specific rewards to entice participation and sales

How Can Points and Rewards Help With Referral Marketing?

Top Referral Marketing Software 2023

Referral marketing may seem simple but it is fairly complex when you get into the details. Frankly, you can simply avoid the complexities of using eCommerce referral marketing software.

The below list contains the top 5 referral marketing software in 2022. The list’s order is random and doesn’t represent any kind of ranking.

1. Referral Factory

Referral Factory helps businesses easily build their referral programs without involving developers. This software offers endless possibilities with design and branding.

You can choose any of the templates and customize them to match your brand identity. It has modest price plans ranging from Starter $95/month to Enterprise $1400 per month.

Except for the Enterprise plan, you get a 15-day trial for every other plan, which would help you evaluate its usability.

businesses easily build their referral programs

Also, an expert will review the effectiveness of your referral campaigns and advise you on how to proceed further. Customer service is available to help every step of the way.

Features of Referral Factory

  • Automate rewards and incentives
  • Best Referral management and real-time tracking
  • Drag and drop program builder tools
  • Integration with business tools like Hubspot, Salesforce, Intercom, and Zapier
  • Full-featured 15-day trial period

The only drawbacks I could notice are that support isn’t available 24/7 for all plans and you can’t add multiple users until you upgrade the plan to the enterprise version.

2. Talkable

Talkable is an eCommerce referral marketing software for enterprise businesses. It helps businesses in campaign organization, referral program management, monitoring, expert recommendations, and so much more.

talkable referral marketing

Considering the business needs, it provides AB testing and segmentation features that are crucial for large businesses. You can make any customizations required to maintain brand symmetry.

The in-built reporting system will display the performance of your referral campaigns using key metrics.

Features of Talkable

  • Automate coupon creation 
  • Referral tracking methods 
  • Advocate personal coupon-sharing 
  • Customer service portal 
  • Segmentation with traffic source

Overall it is excellent referral software, especially from the security point of view and campaign management. Although the plans are cheap, it is more suited for enterprise businesses.

3. Friendbuy

Friendbuy referral marketing software allows you to integrate referral and customer loyalty programs into your online business.

It is high-functioning but easy to use at the same time. Most importantly, it lowers your CPAs.

 

friendbuy pricing

Friendbuy offers various ways to reward your customers such as purchase, refer-a-friend, downloading the mobile, and reward programs.

You can use the referral templates to speed up the setup process. Your customers can refer their friends through SMS, referral links, social, and email. It allows integration with messaging, data privacy, and email marketing services. So, you don’t have to worry about managing a large email list.

Throughout your journey, you will have support from eCommerce referral marketing experts, a personalized launch roadmap, recommendations for best practices and program enhancements, and analytics.

Master Google Analytics 4 for Your WooCommerce Store

However, the pricing for the basic plan starts at $249. If you are looking to scale your business the API access and integrations would require $749 per month.

Feature of Friendbuy:

  • Reward automation 
  • Detailed analytics and reporting 
  • A/B testing 
  • API Access 
  • CCPA and GDPR compliance 

It has minimal features for the basic DIY plans and is expensive when compared to other software packages.

4. Refersion

Refersion is a robust affiliate marketing and referral-tracking software platform that simplifies the setup and management of affiliate programs. It offers customizable commission structures, comprehensive real-time tracking, and automated payouts, making it easy for businesses to recruit and manage affiliates, monitor performance, and scale their marketing efforts.

They have three kinds of pricing plans for individuals,

refersion pricing

With integrations with popular eCommerce platforms and detailed reporting, Refersion provides the tools and insights necessary to maximize the effectiveness of affiliate marketing campaigns, making it a valuable solution for businesses looking to boost sales and expand their online presence through affiliate partnerships.

Features of Refersion

  • Intuitive interface for easy program setup and management.
  • Real-time tracking of clicks, conversions, and sales
  • Streamlined commission calculations
  • Seamless integration with popular eCommerce platforms simplifies implementation.
  • A customizable affiliate program with flexible commission structures and rules.

5. CrewFire

crew fire

CrewFire is a versatile social media management and brand ambassador marketing platform that empowers businesses to identify, activate, and effectively leverage their passionate customers and followers as brand ambassadors. With features like task assignment, content sharing, and performance tracking, it simplifies the process of turning loyal advocates into active promoters across social media channels. 

CrewFire also offers incentives and rewards to motivate ambassadors while fostering a sense of community, and it seamlessly integrates with popular social platforms and eCommerce systems, making it a valuable tool for businesses looking to amplify their brand message and expand their reach through ambassador marketing efforts.

Features of CrewFire,

  • Mobilize passionate customers as dedicated brand ambassadors.
  • Assign and track specific marketing tasks
  • Streamline content sharing with ambassadors
  • Comprehensive analytics to measure ambassador effectiveness
  • Motivate ambassadors with rewards, fostering loyalty and enthusiasm.

Conclusion

eCommerce Referral marketing is effective, requires a low cost per acquisition, and is a more trusted form of marketing.

It can quickly boost sales, and increase traffic, and there are lots of successful examples of referral marketing in history. All of these make it appealing to try.

There are multiple ways to do referral marketing in eCommerce. These include coupon code referral programs, contest referral programs, event marketing, cashback, etc.

You can start with any of these for your next referral marketing campaign. And the tips I’ve shared in the article will help you run a successful eCommerce referral program.

If there is any other way I can help you, please write to me in the comment section.

About the Author: Muskaan Sabarwal

Muskaan Sabarwal is a content writer with a knack for telling stories, a flair for detail, and a hint of humor. She is passionate about creating valuable content on online platforms. She can blend conversion optimization and persuasion tactics like magic to share your brand's message.
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One Comment

  1. Rahul November 30, 2022 at 5:29 pm - Reply

    Usefull information. I can relate the information as I am also digital marketing professional so I can understand. Thanks for sharing.

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