Referral Marketing for E-commerce Brands: 6 Top Tips

Nothing pays off in the long term quite like customer loyalty, because it cascades throughout social networks (online and offline) and wins you more customers. Even those of us who enjoy doing research and reaching our own conclusions about brands tend to be persuaded by recommendations from friends or family members.

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This is why e-commerce companies should put effort into referral marketing. A lead from a referral marketing is more actionable, more urgent, and more likely to convert. But if it were incredibly easy, everyone would be using it to great success: if you get referral marketing wrong, it can backfire and worsen your brand image.

So how do you get it right? Here are 6 top tips to point you in the right direction:

Offer Clear Incentives

Even someone who feels very strongly about your brand might not want to go out of their way to recommend you without some kind of incentive. Texas Tech found that 83% of satisfied customers are willing to refer a product or service but only 29% actually do. Leveraging double-sided incentives is the best way to get customers to share their referral offer.

Your incentives don’t need to be expensive, though. They just need to be desirable enough to create a sense of urgency and shareability. For example, if someone has recently made a purchase, you can offer them a 25% discount on their next purchase if they refer you to a friend — in fact, you can offer that discount to both of them. What will a 25% discount amount to in the end? Is your company’s average cart value worth offering a greater discount?

Realistically, your business should offer incentives that make financial sense to help your company grow. Alternatively, why not turn the referral process into a UGC (user-generated content) competition? Challenge your customers to come up with their most impassioned testimonials, with the most effusive earning a pin at the top of their social media page for a month.

Create Viral Content

Virality is immensely powerful. Get a piece of your content to go viral and it will build a level of buzz that no amount of money could buy. With everyone talking about the campaign, you’ll become a hot topic, encouraging existing customers to mention you more and bringing in new visitors curious to see what you can offer them.

It’s really hard to get content to go viral (even the biggest brands struggle with it at times) but there are things you can do to make it easier. Seasonal traffic is huge for this. Holiday periods such as Thanksgiving or Christmas and big national events like the Super Bowl or the Olympics are perfect breeding grounds for viral content. Create some clickable content that really suits current trends and you’ll win a lot of easy referrals.

You can go viral at other times, but you’ll need to pay more attention to trends. Jump on the right hashtag at the right time and you can capture everyone’s attention.

Ask for Simple Favors

If you get someone to do you a favor, they’ll probably end up liking you more. It’s known as the Ben Franklin effect. We typically do favors for people we like, so why else would they do you a favor? You can use this effect to build up your customer referrals.

Reach out to your customers and ask them politely for feedback, acknowledging that it’s an inconvenience but explaining that it’s important to you that you do better in the future. If they give feedback, offer them some kind of reward.

It will show that you care about your customers, and probably leave them remembering their customer experience more fondly.

Optimize your Customer Experience

We live in a time of near-unlimited opportunity. Almost any product you can think of is available from multiple retailers across multiple countries, so people don’t feel stuck with certain retailers. They know they can do easily go elsewhere. Unless you’re fortunate enough to have really low prices, you need to stand out through keeping your customers happy.

All tricks aside, the best way to earn referrals is to deserve them by providing a spectacular customer experience. Everything from the quality of your products to the empathy of your customer service team will affect how your customers view you, and how likely they are to refer you to their friends.

Carefully consider how your company comes across to others. Do you really think you’re the best? If so, what makes you the best? Are you playing to that strength? And if not, what could you do better? If you keep improving your business, you’ll naturally win more referrals.

Select the Best Sharing Channels

If you’re only asking people to refer you through email, you’re being far too myopic. After all, referrals can be shared through direct conversations, social media posts, written testimonials, case studies, video content, and even podcasts.

Any given customer may be perfectly happy to provide a particular kind of referral but wholly unwilling to provide any other kind. Tweet a link to the product page? No problem. Mention a product in a YouTube video? Unacceptable.

Put all your eggs in one basket and you’ll miss out on countless great opportunities. Run tests and understand your audience to select the right sharing channels. For Talkable advocates, email is the most popular share channel. By tracking where each referral comes from, you can meaningfully decide which share channel(s) to use.

Pick your Moments

Optimal referral marketing considers timing and targeting. If you ask someone for a referral too soon after a purchase and they’ll be puzzled — they may not have even had the time to use the product yet. Let alone have a strong enough opinion about your brand to recommend it, and your haste may make you look desperate. Ask for a referral too later, and their early post-buy enthusiasm might have worn off, leaving them less inclined to oblige you.

Then there’s the matter of picking the right people. If you’re trying to boost sales for a range of clothing items inspired by New York culture, do you really want to be chasing an Iowan who happened to stop by the Big Apple for a vacation and bought something from you on a whim? Even if they’re willing to recommend you, their word is less likely to reach New York circles than someone who lives in New York.

Of course, you shouldn’t run with your assumptions about which groups are worth pursuing referrals. See what the data tells you. If it turns out that moms between the ages of 35 and 52 are your most enthusiastic customers, then turn your attention in that direction — their in-group referrals will be valuable and likely to convert. Remember that the best practices for e-commerce fashion messaging require you to speak properly to your customers and adjust your tone accordingly. Analyze, then target, then execute.

Referral marketing is a goldmine if you nail it, so it isn’t something to be taken lightly. Follow best practices, keep improving, use the best automation tools you can find, and continue to grow your knowledge of your target audience.

Over time, you’ll improve your levels of customer loyalty, and win over some passionate brand advocates capable of bringing you sales again and again.

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Talkable is a SaaS platform that allows companies to profit from the science behind referrals, while increasing sales revenue and preventing fraud.

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