Imagine you own an online store for fresh farm products and want to boost sales.
You could increase your advertising spend, but this may be expensive and is not always feasible, especially for small businesses.
Alternatively, referral marketing - also called word-of-mouth marketing - allows you to leverage existing relationships with customers who will refer their friends and family to your business without additional costs.
What are the benefits of a referral marketing program?
Referral marketing is an effective way to get the word out about your ecommerce store and expand your customer base. Here are some core reasons to invest in a referral marketing campaign.
Encourages existing customers to refer you
Builds brand awareness with potential customers
Builds social proof
Boosts trust between businesses and customers
Increases loyal customers
Attract high-intent people
Aids customer retention and engagement
Serves as a cost-effective customer acquisition strategy
2 referral marketing examples to learn from
Want some inspiration to start your brand's customer referral programs? Check out the referral marketing programs of these top brands: Emotive and AliExpress.
All Emotive customers get a unique referral link to share with others interested in learning about the company. Once a new potential customer completes the form via the link, they can schedule a product demo. The referring customer will receive a $100 Visa gift card if the brand completes the demo.
And if the referral signs up on Emotive, the customer who referred them gets to choose the reward they want, an Apple Watch SE (40mm) worth $279, Apple AirPods Pro worth $249, or another Visa gift card (this time worth $300.) Learn more here.
Active AliExpress users can invite friends to the online store using an invite code or link. Once they register, eligible new users - people who have never registered on AliExpress - receive coupons. The referring party will also get a coupon, but only after their referral completes their first payment.
Though there is no limit to how many friends users can invite, AliExpress limits the coupons customers can earn to only 10 per month. Find out more here.
Key tips for a successful referral program
Successful referral marketing relies on having a clear strategy in place. Get started with these best practices.
Offer strategic referral rewards
Create an incentive that will motivate referrals, such as discounts and freebies. Say you run a farm-to-table ecommerce business – you could offer a free box of seasonal produce for each referral. Or, if your brand specializes in organic skin care products, your referral reward could be a free sample of one of your best-selling items.
Make it easy for customers to refer others
Ensure the referral process is easy to understand, so an existing customer can quickly spread the word about your business. Make it super simple for customers to share their referral links via email or social media so they can start referring friends with minimal effort.
Streamline your referral program with referral marketing software
An automated referral program software can help you easily manage your referral marketing efforts. It will enable you to track referral campaigns and monitor the success of your program in real-time.
Maintain relationships with existing customers
Ensure you keep in touch with existing customers and inform them about upcoming referral promotions. This open communication will encourage them to refer your business and help spread the word. Additionally, regular communication will help ensure that your customers remain engaged with your brand over time.
Set expectations with both the referrer and referee
Ensure that both the referrer and referee understand the terms of the referral program. Make sure you communicate what will be expected from them, so there are no surprises down the line.
Create a customer referral program page on your website
A dedicated website landing page for your customer referral program makes it easier for customers to learn more about it. You can also use this page to showcase customer stories and highlight your referral rewards.
Prompt customers to leave reviews
Happy customers are more likely to refer your business, so ensure you actively collect customer reviews. These reviews will boost your credibility and help show potential customers how much your current customers love your products and services.
Promote your referral program on multiple channels
Asides from your website, use multiple channels to promote your referral program. Some effective referral program promotion channels to explore include:
Promoting your program in multiple ways helps ensure that more potential customers know it and can quickly sign up to participate.
Enhance your referral marketing strategy; create a community around your brand
Creating a community of loyal customers can be a great way to get more referrals and increase brand awareness. Encourage customers to join your brand's online forums and ask for their input on certain product decisions, so they feel seen and heard.
This approach will help them build a healthy rapport, learn from each other, and connect to your brand more. In turn, they will refer your store to others, enabling you to reach new customers without paying for additional advertising.