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Below is our guide "Referral marketing - Engage with the customers that love your brand". Scroll down or click the header titles to go straight to the part that is most relevant for you!

Online guide - Referral marketing - Engage with the customers that love your brand

Do you want to know how to increase sales in your e-commerce by making your best customers ambassadors for your brand? Today, there are several flexible solutions for e-commerce companies that want to work with customized personal recommendations. This guide will go through how Referral Marketing works in general and how you can apply it to work for your e-commerce!


The effect of word-of-mouth

Word-of-mouth is basically just consumers, friends and family talking to eachother, exchanging experiences and giving eachother recommendations and warning. This means it's been going on since the dawn of commerce, which hardly makes it a trend or "the latest marketing stunt".

This doesn't mean word-of-mouth hasn't evolved, however. It used to be analogue, like exchanging tips and tricks over the dining table or sharing coupons. Today it's more about sharing content over social media! Digitalization has given this ancient phenomenon even greater conditions. New platforms and an evermore interconnected world makes this method deliver viral spread, more effective communication and accurately targeted campaign offers than ever before. This is the power of Referral Marketing.




How Referral Marketing can boost your e-commerce


1. Your Micro Influencers (yes, you already have them)

The cornerstone of Referral Marketing is using your existing customers to recruit new customers, while strengthening your brand and also increasing retention and customer loyalty from the existing ones. Here's the basics of it! Offer your best and most satisfied customers a discount towards a future purchase (incentive, anyone?) if they share an offer with one or more friends.

It's an easy and simple to use process for your existing customer, in order not to create frustration or unnecessary friction in your relationship with them. All they need to do is decide whether or not they want to recommend your store to their friends, in order to get a reward (most will). When they go through with the process a number of positive things happen at the same time. Your existing customer has taken a stand and recommended you're business to their friend(s), cementing your place as "top of mind" in their head. This brand interaction will increase the likelihood of the customer coming back to place a new order soon, i.e. boosting retention and customer loyalty. Your customer's friend(s) have gotten a recommendation to check out your business, driving new traffic to your store and creating new customers.

Happy customers normally don't have any second thoughts or doubts about acting as ambassadors for your brand, so if you have happy, satisfied customers - chances are you already have an army of micro influencers awaiting your orders!




2. Increased sales and brand awareness

Referral Marketing doesn't only lead to more recurring as well as new customers, but also increases brand awareness. This will both lead to a more positive attitude towards your brand and increased growth - as it both encourages a new customer to buy and provides the person who recommends you with a discount code. This types of offers is something that you're probably already giving out to loyal customers from time to time. Why not ask them to do something for you in return by recommending a friend?

If you have 100,000 customers placing orders with your e-commerce every year, maybe 20,000 have a recurring buying rate around one order every three months. These are your best customers, people you would have liked to reward with a discount code sooner or later. Take the opportunity to offer them a presale deal on a new collection, for example, in exchange for sharing a discount code with a friend. On average, a third of a loyal customer base engages, giving you thousands of dedicated microinflucers - without having to spend unnecessary time or money. The results are increased sales and brand awareness, at a very low cost!


3. An investment in your future marketing

The consumers of today are overwhelmed by all sorts of advertising from search engines, social channels or other channels and media. As commercial content is pushed out in an ever-increasing volume, competition among companies fighting for consumer attention increases. Your potential (and current customers) can (and will) only receive a certain amount of information at a time, raising the relevance requirements as well as cost, over time.

Consumers are well-educated and aware of which marketing channels companies use. Influencers, for example, are not as reliable a marketing source today as they were just a few years ago, since more and more consumers are questioning their relevance and asking for genuine messages. The more relevant your e-commerce is, and the more genuine you are in your marketing, the better.

Consumers are getting better at shielding themselves from advertising by turning off notifications, logging out, removing apps and newsletters. This makes it more and more difficult for e-retailers and other companies to reach them with their offers. Referral Marketing lets you reach them through their friends!

What you need to do to survive is to invest in new forms of marketing efforts that are better suited the current and future digital climate. This makes Referral Marketing an interesting method, as it is based on personal recommendations between related parties. Chances are probably greater that your customers will rely on a friend or family member's advice than from an influencer whose blog post they know is read by thousands more and that is likely paid for by a company.

Referral Marketing also gives you a human filter that lets you reach out to the people who are really interested in your business offering - not just recipients located by an algorithm. The best filter for unwanted advertising is that which cannot be bought, after all - that is your friends, family, colleagues, etc. As a related party, you don't want to spam your friends or give them a recommendation about something that is irrelevant, which means that a personal recommendation is always more likely to end up being relevant for the recipient!


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