6 Tactics To Improve Your eCommerce Conversions Through Referral Marketing

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Referral is not an alien concept.

In olden days, villagers used to tell their family and neighbours about the best blacksmith down on the corner of the street. They would say, “You just go to the blacksmith, take my name and he’ll take care of you.”

Since the beginning, trade businesses are dependent upon referrals and today eCommerce marketers are using this old-school tactic to drive sales. 

Fast-forwarding to the early 2000s when the most well-known company PayPal adapted this classic technique to introduce its brand in the market. They used to actually ‘pay’ people to introduce their brand to their friends and invite them. 

By march 2000, they had 1 million users and 5 million by mid 2000. This success inspired many other companies like Dropbox. They began to invest in referral programs.

And the rest is history. Today, eCommerce marketers massively lean on referral marketing to expand their consumer base using this tried and tested tactic.

But why is referral marketing so popular and successful?

Gaining trust is a challenging task and marketers struggle with it a lot. According to a survey, 92% of customers only trust recommendations that come from family or friends over a brand advertisement. 

People often get overwhelmed with the amount of information they get on products and services which makes it difficult for them to figure out what’s real and what’s fiction. They simply turn to people who they trust before making any investment. 

This recommendation process is a psychological phenomena and happens naturally. However, there are a few steps which marketers can take to leverage and formalize referrals.

Every eCommerce expert should have a clear understanding of referral marketing if they want to utilize this tactic to generate more sales to stand out among their competitors.

However, what you need to know is every referral marketing tactic is different in nature. Some are more successful while some are a complete failure. Therefore, it’s necessary to think thoroughly before starting a referral program on your eCommerce website.

Today, in this article we’ll talk about 6 tactics you can use to improve the conversion rate of your website using referral marketing. 

Tactics to improve your eCommerce conversions through Referral Marketing

1. Make your referral programs easy

SaaSquatch Data Science stated that every referrer is capable of referring at least 2-3 people in one go. Once a customer has engaged with your brand, he is all ready to invite at least 2 to 3 people from his friends and family circle to your brand.

Sadly only 14% of customers take action once they are redirected to the referral program page. This happens because either the referral page is difficult or to refer your brand to others, it requires their contact details like email address. 

For the above reason, just make sure your referral program should be easy and straightforward. You should also offer social media share options to gain more referrals.

We also suggest you to use popular referral tools. There are plenty of referral tools available that automate referral programs to improve the conversion rate massively. 

Unfortunately only 22% eCommerce marketers use referral tools. Most of them create their own programs by coding. Using an existing referral tool is much more beneficial if you really want to improve the conversion rate of your website.

2. Create enjoyable referral programs

You might have seen a lot of shoppable quizzes and wheel of fortunes shared on social media communities. These are unique ideas to make your referral program more interesting.

 Create enjoyable referral programs

If you want to target more customers, think out-of-the-box and come up with a distinctive referral program. You can add a wheel of fortune in your referral program so your customers can gain rewards or points and flex them on social media. 

You can add quizzes to categorize your prospects. You can sort your customers on their personalities just like how students were sorted into 4 houses in Harry Potter. In this way your referral create will drive urgency in your potential customers.

3. Offer rewards they can’t say NO to

As we have mentioned before only a small fraction of prospects take actions on a referral program. Award rewards that resonate with your customers needs, you can gain more referrals and sales.

Size of rewards you offer matter and PayPal is a live example of it. In the beginning, PayPal was just like other startups – no prospects, no sales and no conversions

So they adopted the referral marketing tactic and started investing on their prospects. They began a referral program in which they offer cash in return of newsletter sign-ups. This small investment helped PayPal to grow their business and earned 1 million subscribers. 

What does this mean? It means you need to offer a reward to your prospects which they cannot refuse. It should be tempting enough to encourage them to go out of their way to convince their family and friends to buy from you.

4. Reward the referees

A referral program has two main components : the referrer and the referee. Most of the referral programs commonly focus on the referrer and often overlook referees. 

To run a successful referral marketing campaign you should reward the referee too.

Reward the referees

Why so? Think about it in this way. 

If you’re the friend (referee) and you’re asked to sign-up on a website just because your friend (referrer) says so will you do that? If your friend is getting rewards or discounts for your sign up, will you still sign up when you’re getting nothing?

Well, if you’re a really good friend you will. But most of the people will hesitate to do so since they’re getting nothing in return. 

So the only solution is to reward the referee. Give them offers that encourage them to sign-up on your site. You can either give them a discount on their first purchase or a free promotional product. 

If you do so, they will definitely sign-up and it will directly improve the sales conversion rate of your site.

5. Host contests

You make things a little more interesting by hosting contests. In fact, we believe this is one of the quickest ways to gain plenty of referrers and promote your brand in the market. 

But how do the contests help? Well humans love challenges, they enjoy doing things that are unique and different. Adding a contest in a simple referral program can motivate prospects to go out of their way to win the contest. 

Commonly a customer is capable of referring 2-3 people, but inserting this tactic can increase the rate to 7-10 referrals per customer. This directly improves your site traffic and conversion rate. 

To make this work, you need to offer high ticket products as prizes. You need them to convince your prospects. The more enticing the prize will be, the more prospects will sign-up for the referral program. 

6. Offer exclusive discounts to social celebrities

Another successful tactic to increase the sale conversion rate on your site is to approach online celebrities. 

Online celebrities also known as influencers are the experts of a particular niche. These people usually have millions of followers on social media. People look up to them and follow their advice and recommendations.

Offer exclusive discounts to social celebrities

You can use their massive power to gain more customers and improve the sales on your site. All you need to do is to get on their good side. 

But how can you do this? It’s pretty simple actually. Look out for those influencers who will be interested in your products. Then contact them and send them products for ‘free’. Don’t ask them for feedback instead offer them an exclusive discount on every purchase they make.

Since, influencers love freebies and exclusive discounts named after their brand, they will definitely promote your brand to flex the free products and exclusive discount they got from you. 

Don’t hesitate to make this long-term investment. Include the freebie expense in your eCommerce marketing budget. 

Also make sure to never offer unrelated products to influencers, they will turn down your offer. Send your products to those influencers who are already interested in your brand even before you contact them for promotion.

Using referral marketing tools 

Referral marketing becomes much easier when you have the right referral marketing tool in your hand. Identify the loop holes in your marketing stack and look out for a referral marketing tool. 

There are plenty of referral marketing tools out there in the market. Finding the right tool for running a successful referral marketing campaign is like looking for a needle in a haystack.

To make this choice easier for you, we would like to introduce an out-class referral marketing tool, Referral System for WooCommerce.

Referral System for WooCommerce

The Referral System for WooCommerce developed by Codup allows you to create customized referral programs to kickstart a powerful referral marketing campaign.

Referral System for WooCommerce

It is a simple tool to improve your brand awareness, customer retention, and customer loyalty. It comes with some outstanding features like,

  • Different discount types and settings – you can set flat percentage or pricing on your discount coupons.
  • Customizable referral emails – use the default email template of WooCommerce to personalize referral prompts.
  • Expiration dates –  set expiry dates on your coupons to drive urgency in your customers.
  • Multitude of custom settings – use plenty of options to create a customized referral program that aligns with your business model.
  • Integrated with WooCommerce Points and Rewards Extension – use the extension to offer redeemable points to your customers as referral rewards. 

All in all, the Referral System for WooCommerce is an excellent referral plugin made for WooCommerce stores that allows you to offer enticing rewards to both – your prospect (referrer) and the friend (referee). 

Endnote

We hope this article will help you in understanding the significance of referral marketing and how can you use it to increase your sales.

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