As an eCommerce store, you’re always looking for ways to drive targeted traffic to your site and stimulate conversions. You want to spend your resources wisely so you can invest your marketing dollars in as much growth as possible.
Referral marketing has become an important tool for eCommerce stores who want to grow their sales without burning cash on tough-to-track marketing tactics that don’t guarantee results.
Specifically an eCommerce referral marketing program is a system of incentivizing your current customers to refer new people to your business. When the new customer makes a purchase, you reward the referrer with a discount, credit, small gift, or whatever they find valuable.
eCommerce Referral marketing programs are sometimes called refer-a-friend programs or affiliate programs. Regardless of their name, they’re simple ways to leverage the power of informal recommendations and word-of-mouth.
Why are referral programs powerful marketing tools for ecommerce stores?
They’re easy to set up. With the help of a referral marketing tool, you can set up your program, embed the right widgets to your site, and then let your customers spread the word.
They run automatically. Once the program is active, there’s no work left for you to do (other than fill all the new orders!).
They make your customer acquisition cost predictable. It’s hard to tell how much it costs to acquire a customer through your soft marketing tactics like social media, blogging, or partnerships with other brands. But you know exactly how much it costs to acquire a customer through a referral program because you set the reward.
They improve customer loyalty. When your customers refer your friends, both the referrer and the referred customer feel invested in the brand. Both parties become more likely to purchase products from your store, rather than a competitor.
In this post, we’ll give you examples of effective ecommerce referral marketing programs that have worked for popular online stores. These are big brands with large audiences and healthy customer bases thanks to referral marketing. Use their programs as inspiration for your own.
1. Love With Food
Love With Food is a monthly subscription box that helps you discover new healthy snacks. Each month, you receive a mystery box of organic, all-natural, or gluten-free foods. For each box they ship, they donate a portion of the proceeds to organizations that help fight childhood hunger all over the world.
When someone uses a referral link, the referrer gets a free box and 1000 points ($10 value). Since plans start at $8-$10, referrers can fund their own subscription with just one referral each month. Subscribers who use a referral link get 50% off their first box, which lowers the barrier to entry and increases the likelihood someone will use the link.
Zulily takes an interesting approach to ecommerce. They list products for a limited time at massive discounts (70%+). They manage this by purchasing in bulk once their sale ends (so they know exactly how much to buy). This keeps their prices low and their selection fresh.
Referrers get $15 for each friend they invite who orders a product. Considering the store’s deep discounts, that $15 goes a long way.
Referrers can connect their email address and Zulily will explore their contacts to identify the best people to invite. Or referrers can send automated invites just by entering their friends’ addresses.
Gilt is a retail store filled with discounted designer clothing. They sell high-end clothing for men, women, and kids, as well as some exclusive services and luxury travel.
Gilt’s referral marketing program rewards referrers and their invites with a $25 gift card each. There are several ways to collect invites: Referrers can pass out their referral link, use one of their convenient share buttons, or have their friends scan a custom QR code.
Snapwire isn’t like most stock photo websites, so they needed a powerful way to spread the word about their unique model.
Their system connects content creators with brands who need authentic, custom images. Buyers post a brief, creators submit their best work, and buyers purchase any (or all) of the content that meets their needs. They also have a growing library of authentic visuals for purchase.
Buyers can invite friends, who receive $20 off their first purchase. Buyers get their own $20 credit when the invited friend makes a purchase.
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You wouldn’t think massive brands like Sprint need referral programs to attract new customers. Who isn’t aware of Sprint? The truth is that referral marketing works no matter the size of your business.
Under Sprint’s program, customers can earn $50 for each line their friends activate. That means if a customers convinces a family to activate four lines, they could earn $200. There’s a cap of $500 per year, but that’s still a generous offer and an easy way for referrers to pay their phone bill.
6. Frank & Oak
Frank & Oak is a menswear store full of ethically-sourced and sustainable solution. They combine classic styles and modern cuts to produce exciting clothing.
Rather than paying out commissions for referral purchases, Frank & Oak have set up a robust affiliate partnership program. Affiliates can earn money by offering their audiences exclusive promotions and sales. Affiliates earn 5% commissions on all purchases.
Frank & Oak supports their affiliates by giving them access to a wide selection of product photos, images, logos, copy, videos, and other assets. Affiliates can even create their own custom shop on the store’s website, filled with the affiliate’s curated products.
Harry’s is more than a shaving brand. They’ve paired an ecommerce store with a subscription service to double-dip into their customer base.
Harry’s referral program doesn’t exist anymore because it was only intended to fuel their launch. They offered incremental reward to encourage fans to refer as many friends as possible. It program was a massive success. Harry’s generated 100,000 leads
Under the program, referrers received a free shave cream for referring five friends, a free razor for referring ten friends, a free shave set for referring 25 friends, and a year of free blades for referring 50 friends. Plus, referee’s received 10% off their first purchase.
Leesa is trying to make the world a better place for those in need. They donate one custom-made mattresses for every 10 they sell to non-profit organizations that support homeless and at-risk men, women, and children.
They also partner with the Arbor Day Foundation to plant a tree for every mattress they sell and donate time and resources to support local community-focused organizations.
Their refer-a-friend program is equally generous. When referrers give a $100 discount to their friends, Leesa pays the referrer $50 in cash. They sent money right to the referrer’s PayPal account.
Ztylus sells multifunctional phones cases, smartphone add-on lenses, and other phone- and car-related accessories. Their innovated cases use a unique disc-mount system to attach accessories to the phone without changing the case.
Their referral process is more like an affiliate program. Referrers share their code and receive a 10% commission on whatever their friends and fans buy – indefinitely. Referred shoppers save 25% on their first purchase, as well.
Furthermore, affiliates earn extra bonuses based on their total referral sales: An extra 2% for hitting $5,000, an extra 5% for hitting $10,000, and an extra 10% for hitting $50,000.
The program is highly attractive to content creators (popular Instagram accounts, YouTube video creators, etc.) because they make money from their referral codes forever. By appealing to influencers, Ztylus found a way to maximize the success of their referral marketing program.
Leverage Your Customers
Referral marketing campaigns are an effective way to grow an ecommerce store. By leveraging your customers’ friends and fans, you can multiply one sale into countless more. You only pay for what you convert. All you need to get started is a referral marketing tool like Rewardful.
Rewardful is the best way to get more customers by supercharging your word-of-mouth. You can choose between multiple referral programs, customize your campaigns and rewards, and monitor your analytics.