Referral marketing for ecommerce is a system of incentivizing your current customers to refer new people to your online stores. When the new customer makes a purchase, you reward the referrer with a discount, credit, small gift, or other appreciation items they find valuable. It is a simple way to leverage the power of informal recommendations and word-of-mouth.
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.
Related: What is the difference between affiliate and referral marketing programs? Find out here.
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Why Ecommerce Stores Should Leverage Referral Marketing Programs
- 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 ecommerce referral program is active, you’ll just need to maintain it—and 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 marketing program because you set the reward.
- They improve customer loyalty. When your customers refer their friends, both the referrer and the referred customer feel invested in the brand. Both parties become more likely to purchase products from your online store rather than a competitor.
Now that you know the benefits of having a retail referral program let’s see some examples of great referral marketing programs.
Related: Discover 11 nifty referral marketing tips to acquire more customers.
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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 worldwide.
Here’s how Love With Food’s referral marketing program works. 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 that someone will use the link.
2. Zulily
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.
For their referral marketing tactics, Zulily’s referrers get $15 for each friend they invite and order a product. Considering the store’s deep discounts, that $15 goes a long way.
Referrers can connect their email addresses, and Zulily will explore their contacts to identify the best people to invite. Or, they can send automated invites just by entering their friends’ addresses.
3. Gilt
The next in our ecommerce referral marketing program example is Gilt. 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.
4. Snapwire
Snapwire isn’t like most stock photo websites. In fact, it labels itself as an on-demand production studio. 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.
To attract more users, Snapwire uses referral programs to spread the word about its unique model.
Their referral marketing program allows buyers to invite friends. The referees will receive $20 off their first purchase, and the referrers will get $20 credit when the invited friend makes a purchase.
5. Sprint
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 referral program, customers can earn $50 for eachline their friends activate. That means if a customer 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 that offers ethically sourced, sustainable solutions. It combines classic styles with 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.
7. Harry’s
Another smart ecommerce referral marketing program worth checking is Harry’s. Harry’s offers subscription-based shaving products to double-dip into their customer base.
Although Harry’s referral program doesn’t exist anymore (because it was only intended to fuel their launch), they offered incremental rewards to encourage fans to refer as many friends as possible. It program was a massive success. Harry’s generated 100,000 leads.
Under the referral 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, the referees received 10% off their first purchase.
8. Leesa
Leesa is trying to make the world a better place for those in need. They donate one custom-made mattress 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 ecommerce referral marketing 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.
9. Ztylus
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.
Although their referral program is more like an affiliate program, it’s worth checking. Here’s how it works: referrers of Ztylus products share their code and receive a 10% commission on whatever their friends and fans buy—indefinitely. Referred shoppers also save 25% on their first purchase.
Furthermore, the referrers 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 referral program is highly attractive to content creators (popular Instagram accounts, YouTube video creators, etc.) because they can earn money from their referral codes forever. By appealing to influencers, Ztylus found a way to maximize the success of its referral marketing program.
Boost your Ecommerce Sales with Referral Marketing Programs
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.
If you're looking for inspiration for your next campaign, explore our collection of affiliate marketing ideasor learn effective affiliate marketing campaign promotion ideas.
Rewardful is one of the best referral and affiliate marketing tools for ecommerce. It helps you supercharge your brand with a word-of-mouth marketing strategy. With Rewardful, you can choose between multiple referral programs, customize your campaigns and rewards, monitor your referrer's performance, and more.
Sign up today to Rewardful and get a 14-day free trial. Ecommerce referral marketing programs have become an important tool for retail stores that want to grow their sales without spending cash on difficult-to-track marketing tactics that don’t guarantee results.
