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5 Reasons Why A Referral Marketing Program Is Beneficial In eCommerce Success

Customers who are pleased with your goods & services are the finest brand advocates because people value and trust word-of-mouth recommendations from friends.

Reviews, recommendations, ratings, and referrals are typical parts of today’s eCommerce websites since many online retailers recognize the significance of these elements in brand exposure, lead generation, and sales growth.

Customers’ experiences with your products and brand might range from cost to quality and customer service; however, its breadth makes referral marketing all the more beneficial.

There are numerous clever ways to encourage and drive customers to submit favorable reviews and recommend your items to others.

Unlike word-of-mouth marketing, in which friends and family talk about your products based on their own experiences with them, referral marketing includes incentives, such as discounts and freebies, to encourage customers to spread the word about your company.

This post will look at the advantages of referral programs for eCommerce success. 

What exactly is referral marketing?

Often known as word-of-mouth marketing or people marketing, referrals convert people’s trust into buying power.

You are far more inclined to test a brand if you read an excellent review or if one of your friends or family members raves about it.

The store you used to walk by without noticing becomes interesting to you since a friend mentioned it to you once. How’s that for word-of-mouth marketing?

In the world of eCommerce, referrals allow you to profit from this psychology with technology. It assists you in engaging and incentivizing customers, expanding your customer base, and building brand loyalty.

You may effectively increase revenue with referral marketing programs by rewarding your existing client base to suggest your company to their friends and family.

This may entail generating prizes such as coupons and referral discounts or offering promo codes that clients can share with their connections.

Or it entails establishing discounts for the first purchases or awarding points referred consumers can later redeem for discounts.

You want the referred party to use your product or service immediately and tell their network about you so that you may continue the referral cycle.

Reasons Why eCommerce Websites Should Indulge In Referral Marketing

For those still deciding, we’ve summed up the most significant benefits a referral program will bring to your eCommerce business.

It Is Ideal For Your Social Media Strategy

eCommerce and social media go together, and any legitimate online business needs a robust social presence. This social method is ideal for referral marketing.

Most good referral programs include social sharing buttons, allowing clients to share their great experiences with their peers online effortlessly. As a result, eCommerce businesses can quickly solicit and track new referrals.

Another advantage of social referral marketing is social proof. When customers share your brand openly online, it is visible to their followers and friends. This builds trust in your brand, which is crucial in the crowded eCommerce market.

Even individuals who do not participate in your referral program are aware of your brand and are either exploring it themselves or keeping it in the back of their heads for later.

And for those who do join your program, you can use their data to build your customer segments and identify those you may have yet to consider.

It’s Simple To Get Started

Referral programs were notoriously difficult to deploy in the past. However, the ascent of referral marketing technologies such as Talkable has made this possible. Technology makes referral marketing simple, which seamlessly integrates with your existing online store.

These technologies can sync with most eCommerce sites, making implementing a referral marketing strategy simple for eCommerce entrepreneurs. With the help of technologies like Talkable, you can design and test your referral campaigns to get the greatest results possible, tweaking each to deliver the most traffic and sales for your company.

And, of course, anything that saves you time when you’re beginning your eCommerce firm is a blessing.

It Increases Your Email Marketing ROI

Your email marketing approach includes a variety of formats, such as promotional, informational, and transactional emails. Because clients are already looking at them, these emails are ideal for promoting your referral programs.

While mentioning your referral program is appropriate in most client emails, they shine in post-purchase emails.

Receipts or order confirmations are frequently sent when your consumer is ecstatic about the product or service they have just purchased. As a result, customers are more inclined to recommend your company to a friend.

As a result, adding another lead generation source increases your email’s ROI. Create a visually appealing order confirmation email that reminds clients of their purchase and capitalizes on the post-buy glow to induce referrals.

It Aids In The Identification Of Brand Advocates

Customers who send you referrals will be a diverse group. Some may simply provide one or three referrals, but others may send you five or six. Of course, each is beneficial to your company by increasing revenue.

However, you may find that a select few consumers send you multiple referrals. These clients are crucial since they are brand ambassadors. They support your company and enthusiastically promote it to their followers and friends offline and online.

Find brand champions with a large number of followers on social media and contact them. These brand advocates are frequently influencers with large social followings that drive enormous revenues for eCommerce firms.

Connecting with them and offering them an incentive as a thank-you strengthens their support, which raises your prospective referrals. It demonstrates to them and their followers that you care, improving your brand image in their minds.

It Is A Time And Money-Saving Marketing Method

Marketing is typically the most expensive and time-consuming component of maintaining an online store for many eCommerce firms. Marketing can be time-consuming, what with paying for PPC or social ads and generating blogs for your content strategy.

However, by utilizing something already in place, referral marketing saves you time and money. Referral marketing simply capitalizes on the fact that your delighted consumers are already raving about your business.

Those same consumers typically suggest people who are likely to be drawn to your brand, thus performing the majority of the work for you by generating qualified leads.

And when those new members join your referral program, the cycle repeats. It’s easy to use and self-replicates, saving you time, money, and trouble.

4 Crucial Steps in Developing Your Referral Program

Follow these steps to develop a customer referral program that grows your business:

1. Establish Rewards or Incentives

Incentives or rewards motivate your clients to participate in your referral program. You need to be generous with your incentives and make it as easy as possible for your clients to make their first recommendation.

This creates a positive feedback loop in which they are more inclined to suggest consumers to you in the future.

Knowing your competitive landscape is helpful since it allows you to match the incentives your more successful competitors offer.

Gift cards, free items, features, discounts, or services, shop credit, branded swag, and cash are some of the most frequent eCommerce referral program perks.

Whatever type of incentive you choose, make sure your customers consider it valuable. One of the most effective strategies is offering a two-sided reward, which benefits both the referrer and the referred individual.

2. Make It Simple To Find

For a referral program to be successful, your consumers must be aware of its existence. Make your referral program easily accessible on your eCommerce website, and alert new customers immediately after they make a purchase.

The process for claiming incentives, as well as the reward system, should be simple. You should also simplify the reference process by offering a discount code or unique link your customers can share with prospective referees.

Here are some strategies for increasing the likelihood that your consumers will find it simple to use your referral program:

Keep It Simple. Make it apparent to your visitors that you would like them to refer friends, what benefits you provide, and the precise means for them to do so. Your referral page doesn’t need a lot of copy to describe the aim of the program.

Limit the number of clicks. A one- or two-click approach for sharing with friends is much more likely to become habitual. Do not make your consumers jump through hurdles to provide you with referrals.

Various sharing options. Social sharing buttons, email templates, or a clear and concise referral link are all excellent ways to lessen the friction associated with sharing the brand with friends. Keep in mind that convenience is key.

Mobile-optimization. People not only read emails and scroll through social media on their smartphones, but mobile shopping on eCommerce websites is at a historic high. Make your referral program and eCommerce flow smartphone-friendly to meet your clients and potential purchasers where they are. Do regular website maintenance to ensure your website loads quickly and is simple to use.

FAQ section. Reduce the burden on support by answering commonly asked questions on a FAQ page. Include information about how you manage refunds when people can expect to get their incentives, and how they may follow their progress.

3. Use A Short, Direct CTA

Encourage referral program participation through a clear, short, and powerful CTA (call to action). Put the text in a prominent location in your user experience, such as the primary navigation menu or at the bottom of any transactional emails.

The most effective CTAs for referral marketing are frequent one-liners (5 to 10 words) that leverage specific numbers or offer a free sample of a popular product.

Here are a few examples:

“Give $5 and receive $5.”

“Get $25 off.”

“Tell a friend and get 20% off.”

“Spread the word, and you’ll get free.”

“Share and Earn”

4. Understand Your Numbers

You’re unquestionably already tracking many of the same KPIs as an online business. However, referred clients and clients who have referred new customers are intriguing groups you can use to drill down further into your KPIs.

When it relates to a referral program, here are a few numbers to keep track of:

Gross orders: Gross orders are the total sales generated by your referral program.

Net orders: Net orders are gross orders minus returned or canceled orders.

Click traffic: The number of clicks generated by your referral links.

Commission: The amount you’ve paid your referrals in terms of both a percentage of sales and an absolute quantity.

Referrer performance in each segment: You want to identify and measure the traits shared by your most prolific referrers.

Total referrers: The total number of customers that have successfully referred your product to at least one other person.

RCR: The percentage of referred visitors who purchase on your eCommerce website is referred conversion rate.

Customer referral percentage: What proportion of your clients have referred someone else to your product?

Earnings per click: EPC or earnings per 100 clicks, based on the reporting technique.

ARPU stands for Average Revenue Per Order.

Keeping these figures in check will help ensure that your referral marketing program is healthy, functional, and ready for expansion.


Referral programs are a promotional powerhouse because of their low client acquisition costs, scalability, and viral network effects, making them a very appealing channel to all organizations.

You should also get a fast eCommerce website design so that your pages load quickly and users can readily access information.

The key to running a successful referral program is to align your motivations with those of your consumers, make it simple for them to promote you, and provide a fantastic product or service that they will brag about.

There is no better time than now to establish a referral program, so get started!

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