Referral Marketing for eCommerce stores – Tips and Tricks

Posted in Social Referrals

March 13, 2013 @ 3:34 AM

Since the recent past, referral marketing is getting greater importance in eCommerce sector. Most of the top retailers have their own referral programs to convert customers’ loyalty into more visibility and sales.

Recent studies have revealed that the likelihood of new customers buying from your business is four times higher if someone refers them to your store and also that they produce 25% more profit margins. For both online and offline businesses implementing a referral system is a cumbersome process. Businesses spend a lot of time and resources to create successful referral programs. However platforms like ours can take care of many of these headaches, although the success of your referral campaigns depends on a lot of other variables as well.

Below presented few tips may help you in implementing a referral program for your online store

Find a suitable avenue to run your campaign

Many a times stores try to run referral campaigns on all pages particularly at product pages. It is always a good idea to run referral programs once the customer receives the products/ services. Obstructing the visitors’ flow is not a good idea. For online stores it is better to introduce the referral program once the customer completes his order. For instance post purchase emails and order confirmation pages are good examples to place referral campaigns.

Offer an incentive

Incentives will encourage the visitors to act on the referral program. Many a times, higher incentives lead to higher engagement level of customers. Tailored and personalized incentives are a good way to get even higher customer engagement. Different incentives should be tested to identify the one that works the best for your store’s customers.

Segment the visitors

It is a good idea to segment the visitors to run referral campaigns. Visitors can be segmented based on the age group, cart value, frequency of shopping, geography etc. Various segments tend to behave differently to different offers and incentives. Visitors in some segments get motivated easily whereas for some you may need to offer a little extra/ give different offer to encourage them to act on the campaigns.

Track and optimize

One of our consumer electronics retail clients started a referral campaign which initially achieved only a 5% referral rate. However, after making some variations to the theme and layout, the referral rate rocketed to around 40%. Sometimes minor modifications in campaign text, color and image can make a substantial difference in the referral rate and the resulting traffic. Hence, it is important to track and optimize the referral campaigns.

Make it simple

Make it clear and simple for visitors to engage with the referral campaigns. One of the important aspects of offering incentives, especially as part of a referral campaign, is being clear and consistent about what the customer has to do and what will they receive in return. From our experience the clarity and simplicity in the messages can give exceptional user responses.

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