Most eCommerce businesses make use of social media, email marketing, YouTube videos and digital advertising to market their products in their target segment. But after a point, all their efforts and campaigns start to look repetitive. And anything repetitive on the internet in today’s fast moving generation, isn’t interacted or engaged with by most.

So how does an eCommerce business change the rules of the game?

By making use of referral marketing.

In our previous post, we spoke of how eCommerce businesses can boost their sales using referral marketing. In this post, we’ll look at the main pillars of a referral campaign for any business.

What is referral marketing?

It is the method of promoting products or services to new customers via word-of-mouth (existing customer referrals). While referrals are something that often come in on their own once the business has established a market for itself, they can also be triggered by appropriate strategies.

referral marketing program


Why does it work?

People tend to trust other people’s reviews before engaging with a new business. It makes them feel that if a product offered by the business is benefitting someone like them, it is more likely to suit their needs as well. As a matter of fact, according Harvard Business Review, referral marketing is ranked as one of the highest ROI generating marketing activities a business can invest in.

Another thing that referral marketing ensures is that your referred customers are usually high-quality (target specific) and sales ready. And the acquisition doesn’t cost you as much as running ad campaigns does – you only end up rewarding for the achieved referrals.

referred customers


What should you monitor when running a referral campaign?

Unlike other digital marketing efforts, you won’t get instant results from a referral marketing campaign. Based on the industry you are in, the kind of people you are targeting and the referral offer, the results may vary from one eCommerce business to another.

But here are a few numbers you need to keep an eye on for optimizing your referral campaigns for better results:

1. The rate of participation

The participation rate is defined as the number of people who are willing to become your brand advocates on social channels. These could either be your existing customers or new customers, based on what the referral campaign has to offer.

How to optimize the rate of participation?

In simpler words, the more number of participants you have, the greater are the chances of getting higher referrals. Here are a few variables this will depend on:

  • the number of existing customers you have
  • number of referral campaigns you’re running
  • promotion of the referral campaign

A few tips to get your referral campaign noticed and get more people to participate in it:

  • highlight your referral campaign and include CTAs on your ecommerce home page
  • invite existing customers to sign up for the campaign via email
  • create a compelling referral landing page that clearly states what the participants are required to do for winning
  • encourage visitors leaving the website to participate using exit intent campaigns

Also read: How to create landing pages that convert (checklist)

For example, Dropbox has a very simple referral program page, that states what the user is supposed to do to win, and how to go about it.

dropbox referral

2. The rate of sharing

The sharing rate is defined as how many times and by how many people is the referral link shared on different digital channels. Usually, businesses provide each participant with a custom URL so they can track how many referrals an individual is able to generate and reward him accordingly.

How to optimize the rate of sharing?

The popularity of your referral campaign depends entirely on what you’re offering your target audience. It could either be an incentive or something that stimulates their interest. The variables that affect the rate of sharing include:

  • perceived value of the incentive
  • messaging of value proposition
  • how long you’re able to grab attention

A few tips to achieve the optimum rate of sharing:

  • consistently remind them of the referral campaign via social media, paid promotions, on your website, etc
  • appeal to their social interests so that they don’t mind sharing it in their circles
  • make an offer that is time bound and appeals to their purchase triggers
  • send email reminders of the referral campaign to your existing customers

Also read: 14 Social Media Marketing Tips for high converting campaigns

For example, Faballey promotes its referral offer on its homepage so that none of its website visitors miss the campaign.

fab alley referral

3. Referral link open rate

The referral link open rate refers to the percentage of click throughs you get to your website when people share your referral campaign.

How to optimize the referral link open rate?

  • optimize your referral message and make it appealing, as most people make use of the default sharing message
  • use high quality compelling images – make use of Facebook images and Twitter cards while promoting your campaign on social media

4. Referral conversions

The number of conversions you have achieved via the referral campaign. This also helps you gauge the acquisition cost per customer for the campaign. Now the number of conversions you get will depend on all the above numbers and the effective of the sales cycle.

Over to you

While you need to think through a referral program before actually running it, it is also important that you test out small variations. But remember, the variations shouldn’t cause any kind of dispute in your target audience.

For example, if you are offering $50 off for 5 referrals, stick to the offer. You could instead vary your messaging tone and type of CTA, letting the referral offer remain the same.

And most importantly, understand what your target audience is seeking for on your website. A referral campaign around a popular demand, is automatically more effective.

Have you tried running a referral campaign on your eCommerce site? Do let us know if you think it is an effective way of increasing sales, in the comment section below!

get more customers 2

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Vanhishikha Bhargava

Content Marketer at Exit Bee. Most of the times found trying to create compelling copies for blogs and digital campaigns, keeping a watch on what's happening on social media or ranting on Twitter. At all other times, not found.

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