8 Handy Tips on Increasing Ecommerce Sales with Referral Marketing
Who do you trust more? The word-of-mouth of your friends or the well-written advertising copies circulated by ecommerce sites? I’ll go with the former one, and I’m sure you are no different in this case. Even statistics say that 84% of customers trust a product when referred by people they know personally. And referral leads have a 30% more conversion rate than leads generated through other channels. Thus ecommerce referral marketing can contribute greatly to increasing sales. Keep reading to learn how to make the best use of ecommerce referral marketing to skyrocket your sales.
Why Referral Marketing Matters
Referral marketing serves multiple purposes by bringing traffic to your website, generating more sales, and creating brand awareness. When a past customer suggests his friends, peers, and family members to buy a product, they will grow confident to buy it. It’s important to provide quality products or services and offer incentives in exchange for referrals. Only then will past customers feel urged to refer your products naturally.
Referrals are more trusted than other forms of marketing (i.e., affiliate marketing) as it involves only actual customers who liked your products and want to get more from you. People sometimes spontaneously ask for referral codes from their acquaintances before opting to buy from a specific ecommerce site. What’s more surprising is that 65% of new deals of companies come from referrals. If you’re yet to introduce a referral program, you’re already late.
8 Strategies to Increase Sales with Ecommerce Referral Marketing
Referral programs are comparatively low-cost marketing campaigns that result in better lead generation and higher conversions. You need to craft a well-planned ecommerce referral marketing program to reap the benefits. The following steps will help you implement effective referral marketing strategies.
Ensure a Win-Win Situation
Even if your customers are satisfied with your products or services' quality, they may feel reluctant to recommend your business. It would help if you gave reasons to encourage them to refer a friend. That’s the point when you have to incentivize your customers to make a referral. This is like a win-win situation for both merchants and customers. These incentives don’t affect the trustworthiness of referred products/services. As you’re selling quality products, customers who follow the referral funnel will not regret it afterward; rather, they’ll refer more of their friends.
Choose the Type of Rewards
You can incentivize customers in many ways. Choosing the right kind of reward is critical to the success of a referral program. You can experiment with different forms of rewards to determine which one renders the best output. Then finally, choose an incentive that increased sales during the testing period. The most common types of rewards are as follows.
Cash: Plain old cash is what most customers expect in exchange for a referral. You can consider this option, but my suggestion is to provide a gift card applicable to your store. This will motivate consumers to buy again from you after getting the rewards.
Discounts/Coupons: Discount and coupon methods refer to a specific percentage of merchants' waivers. A discount offer facilitates the buying process more quickly as the person who makes a referral, and the referred person will get a discount only if both of them buy something from the store.
Free Gifts: You can offer gifts as rewards for referrals. Usually, complementing products associated with the purchased items are given as gifts. This is also an implicit marketing technique. People will buy the gifted product after finding the free one useful and ideal as per their needs.
Points: The more numbers of referrals one makes, the more points one earns. This is the process of rewarding points to the referee. These points can be converted into discounts or any other types of incentives later on. Most customers stop using points at the midway of a referral program. It saves money for your business.
Free Delivery: This is a less complicated process of incentives. Most ecommerce stores charge a shipping fee. People take it as a burden. You can offer them free shipping in exchange for referrals.
Adopt a User-friendly Referral Process
If your referral program involves a good deal of complexities, why would anyone bother to participate in a referral program? Make the process as easy as possible. Integrate a user-friendly system that allows customers to send referral links to friends with just a single click. If a referral program seems difficult and existing customers give up on making referrals, you'll lose a substantial number of prospective customers.
Promote Your Referral Program
Customers hardly know about an offer unless companies reach out to them and attractively inform them. Designing an outstanding referral program will result in nothing if you can't promote it through different sales channels. Create content around it and spread them effectively using emails, social media posts, landing pages, and other promotional materials. Customers will come to make a purchase only if you can interest them with your marketing campaigns.
Make It Noticeable
Optimize your product pages and homepage, keeping in with the referral program. Design the layout in a way, so that information about ecommerce referral marketing attracts visitors’ eyes right away. You can integrate flash buttons, pop-up notifications, vibrant color palettes, and other design elements to make the referral program visible.
Integrate a Review Section
Customers like to take at fellow customers’ words. Positive online reviews encourage potential customers to make a buying decision. This is also one kind of referral. You can take advantage of user-generated content like reviews, social media shares, contests, and more to increase sales. Offer incentives to buyers who give positive feedback via reviews, social media posts, referrals, or in any means.
Measure the ROI Regularly
You’ll never understand whether a referral program is successful without tracking the analytics of this marketing campaign. It's crucial to keep track of the data regularly to come up with more effective strategies. Find out what’s going wrong and what’s yielding huge sales. Measure the ROI (return on investment) timely to ensure you are making enough money to maintain a positive ROI. You have to take immediate action if the ROI is unsatisfactory.
Employ Referral Marketing Software
It's possible to run an ecommerce referral program without using referral marketing software, but it's way easier to run it with a competent tool. You can employ marketing tools to simplify the whole process to a large degree. These applications can help create, manage, and monitor referral programs. They also provide credible data to help determine the success or failure of your ecommerce referral marketing campaign.
Referral marketing can increase sales exponentially as people trust their friends and family more than company representatives. Now it's up to you how you can adopt strategies to produce a successful referral program. But I can assure you of splendid results if you follow the above-mentioned steps.
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