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If you’re here, it means that you own an eCommerce business and you want to know more about how to bring new customers in.
Even though there are lots of different ways of acquiring new customers for your eCommerce store, using referral marketing to leverage your existing customers will always be one of the most efficient.
For that reason, we’ve created a simple guide that’ll take you through the following:
Plus, we’re going to share several inspiring examples of successful eCommerce businesses that are nailing referral marketing.
Last but not least, we’re going to share our Referral Marketing Wizards ebook, which you can download and start reading right away.
We’ve got quite a lot to cover, so let’s get started.
A referral program is a system of giving your customers rewards and incentives in order to refer your brand to people from their circle of family, friends, and colleagues.
In terms of eCommerce referral marketing in particular, the elements of the system focus particularly on eCommerce businesses that incentivise their existing customers and social media audience.
The way this works is quite simple.
A company creates a referral code that it then shares with their existing customers, usually through email.
Depending on the elements a company chooses to put into their referral campaign, the referral code or referral link might be given to customers as soon as they:
In terms of the rewards, the sky’s the limit!
After a successful referral is made, companies might give lot of types of referral rewards and incentives, including the following:
In most, cases both the referrer and the referred customer will get a reward.
However, some companies particularly focus on rewarding their brand advocates, who in this case are their loyal customers that have made the referral.
Let’s look deeper into an eCommerce referral program from a company you probably already know.
Gillette is an American company that sells shaving supplies as well as personal care products.
The company was launched over 100 years ago, at the beginning of the 20th century.
We can only assume that if they’ve been around for such a long time, they must know how to use the right marketing tools and leverage their satisfied customers through word-of-mouth marketing.
Taking a closer look at the Gillette UK referral marketing program, we see that they’ve created a simple referral page that gives their current customers a clear idea of what’s in it for them.
Image Source: Gillette
More specifically, Gillette gives £5 – roughly $7 – for every customer referral that leads to an order with Gillette.
The incentive in this case is in the form of a credit to the referrer’s account – we’ll see more examples like this one a little further down in this post.
We’ve now talked quite a bit about what an eCommerce referral program is.
Let’s dive deeper into the benefits a referral marketing campaign can bring to your eCommerce business.
It’s not news that loyalty programs generally come with lots of benefits for various types of businesses.
In terms of eCommerce businesses, a successful referral program is one that prompts happy customers to basically prove their customer loyalty in a very real way.
By referring potential customers to the business, they help a business grow its customer base and also build brand awareness.
Additionally, since referrals usually come with rewards for the referrer, they can also help increase customer retention and make it easier for existing customers to make their next purchase with the business.
The following graphic includes some of the benefits you can expect when you build a referral program for your business.
You’ve seen them in short; now let’s have a closer look at the various benefits referral programs can bring for eCommerce businesses.
Referral marketing can be very effective in terms of customer acquisition.
According to a Nielsen survey, 83% of consumers state that they trust recommendations from friends and family.
Why?
Because the referral code sent to you by one of your friends might be all the proof you need in order to make your first purchase within an online store you’ve never shopped with before.
However, even if a referred person isn’t willing to directly get to the point of actually buying something from your business, referral marketing can still be useful with regard to generating leads for your business.
Keep reading to find out more about how referrals can help you build brand awareness for your eCommerce business.
A referral marketing strategy that focuses on giving existing customers – who are happy with how your business works as well as with your products – an extra boost in terms of spreading the word about your business can be great for helping you build brand awareness.
In simple terms, referral programs are based on word-of-mouth marketing, which means that people speak of your brand when you, your ads, or your products, aren’t available to ‘talk’ about your business.
Given that word of mouth has the power to influence 90% of purchases, we can clearly see that it makes total sense for eCommerce companies to invest in referrals and other marketing activities that’ll generate buzz around their products.
Plus, when it comes to brand awareness and recognition – which is the process of people recognizing basic brand elements, such as your logo or company name – having people who already know your brand refer others to it helps boost your social proof.
Let’s get to the last benefit we’ll be talking about.
We’ve said it over and over again; the way referral marketing works is bound to help a business grow and achieve several important goals.
One of them is to reduce customer churn and increase customer retention.
When we talk about customer retention, we’re talking about this fantastic thing of creating long-term relationships with your customers that are happy to remain loyal to your brand.
Research by Bain & Company with Fred Reichheld proves that even a small increase in customer retention can produce a significant increase in profit.
More specifically, the research found that a 5% increase in customer retention can yield a 25% increase in the company’s profit.
As simple as that!
You now know the theory, but you might still want to see some proof that a referral program can indeed help your eCommerce business grow.
I hear you!
In the next section, we’re going to see several examples of eCommerce businesses that use referrals to leverage their existing customer base.
Here we go.
Whether you’ve used referral marketing for your eCommerce before reading this post or not, you now have several reasons why you should start leveraging the idea.
To inspire you and show you how others in the eCommerce industry are making the most of referrals, we’re going to discuss six examples of eCommerce referral programs.
The examples come from different industries, but they’ve all got a common goal: to expand the company’s customer base and reward their existing customers for referring their business to family and friends.
You’ve probably all heard of marketers that work for companies like PayPal and Airbnb and their referral programs, right?
It’s widely known that eCommerce and SaaS businesses use referrals to create a strong network around the business.
The examples of businesses and retailers that follow will show us how.
Author’s Note: If you’re into inspiring examples, feel free to read our $67B Worth in Referral Programs ebook that includes well-known referral examples from companies like Dropbox, Robinhood, and the Hustle.
Here we go.
Cult Beauty is a skincare and beauty online store that has almost any beauty products one can dream of.
Image Source: Cult Beauty
Referral type: Two-sided
Referral reward: Discount
Restrictions: Invite up to ten friends
With over 13 years of experience in the beauty industry and over 1.5 million followers on Instagram, we can only assume that Cult Beauty must be serious when it comes to engaging with its audience on social media platforms like Instagram.
The business uses as many marketing channels as possible, including influencer marketing and running an affiliate program.
As you may have guessed, the company also runs a refer-a-friend program that goes as follows.
Image Source: Cult Beauty
As we read on the referral landing page above, Cult Beauty gives its existing customers the opportunity to invite up to ten friends who’ll get 15% off of their first order with the business.
Similarly, referrers also get a 15% off.
This simple, two-sided referral incentive that rewards both the referrer and the referred friend can undoubtedly lead to referral sales and help the business increase sales.
Keep reading for our second example.
Hussle is an online business that gives users access to browsing and buying passes for over 1000 venues, such as spas, swimming pools, workout centers, and gyms.
Image Source: Hussle
Referral type: Two-sided
Referral reward: Discount
Restrictions: N/A
Referral page: Access Here
Similar to the referral program we discussed a little further up in this post, Hussle offers their existing customers an incentive to refer their friends.
Plus, the company also rewards invitees with a discount on their first pass.
Image Source: Hussle
Clicking on the Refer a friend button will get users to a pop-up window…
… that’ll get them to the registration page:
Once the referred friend redeems their pass, the referrer gets £10 off their next pass.
That’s a quite generous referral amount and can definitely motivate an existing customer in terms of making them want to spread the word about the business.
Here’s the third example we have for you.
Solo Stove is an outdoor products eCommerce store that focuses on creating products that will accompany people in their outdoor activities and help them create good memories.
Image Source: Solo Stove
Referral type: Two-sided
Referral reward: In-store credit and discount
Restrictions: First order minimum of $100
Referral page: Access Here
The company has established a rewards program that offers existing customers the chance to earn credits that they can redeem in the Solo Stove online store.
Image Source: Solo Stove
More specifically, the company gives…
… thus rewarding them both for their trust in the company.
Image Source: Solo Stove
Last but not least, what we particularly liked about this specific program is the pop-up window that gives users the opportunity to know more about how referrals work.
Image Source: Solo Stove
That’s pretty cool, isn’t it?
Moving on.
Three is a mobile and data network that was founded almost twenty years ago, back in 2002.
Image Source: Three
Referral type: Two-sided
Referral reward: Cash reward
Restrictions: N/A
Referral page: Access Here
With over 13 million subscribers as of July 2020, the company is doing really well in terms of maintaining and growing its customer base.
Even though we’re sure that they’re using several different marketing tools to keep their customers happy, we’re going to particularly focus on their interesting referral program.
As you can see below, Three offers existing customers the opportunity to refer a friend to the business and get a referral reward.
Image Source: Three
What’s interesting about this specific referral program is that it allows the user to choose between different referral options in terms of the products they’ll be referring their friends to.
More specifically, users can make a referral for any of the following:
Image Source: Three
Naturally, every referral option comes with different rewards.
For example, referrers can get up to £80 cash rewards for referring a new user to broadband and tablets, whereas they can get up to £40 for SIM-only deal referrals.
This shows us that you can use modern referral marketing software to create a referral program that’s diverse and suits your needs.
Let’s get to the next program we want to show you.
ASOS is a well-known fashion, accessories, footwear, and beauty products eCommerce company that’s quite known for its modern approach to social media and the way it engages with its audience.
Image Source: ASOS
Referral type: Two-sided
Referral reward: Discount
Restrictions: N/A
Referral page: Access Here
The company focuses on doing successful relationship marketing moves and building long-term relationships with its customers.
For example, ASOS generally uses lots of user-generated content as well as referrals.
Image Source: ASOS
The way their referral program works is the following: they give existing customers a unique referral link they can share with their friends.
As we can see above, the program offers both the referrer and the referred friend a 20% discount on everything the company sells online.
This must make all ASOS lovers go crazy!
If a user already has an account with ASOS, all they need to do is to register on the ASOS Refer a Friend Scheme using the form below…
Image Source: ASOS
… and then get their referral link that they can share with their friends:
Below is the final example in our list.
Ploom is an electronic vaporizer company that was established in the US some years ago.
Image Source: Ploom
Referral type: Two-sided
Referral reward: Discount
Restrictions: Referred friends must be over 18 and smokers
Referral page: Access Here
The company has taken referrals to the next level by introducing the marketing move to the heated tobacco industry and the result is a straightforward referral system.
To be more specific, Ploom’s refer-a-friend program works like most referral programs.
Image Source: Ploom
All existing customers need to do is to invite their friends who are over 18 years old and currently smoke to the store.
Once they’ve made their first purchase, for which they’ll get £20 off, the referrer will also receive the same amount of discount as a credit to be used on their next online purchase in-store.
Plus, it looks like there are no additional terms in relation to the number of friends one can refer, as long as they’re smokers and they’re not underage.
After having completed our list of six inspiring eCommerce referral programs, we can only imagine how much you now want to start your own.
That’s why we’re going to dedicate the section that follows to help you get started with referrals for your eCommerce business.
We’ve already established that referrals, when done correctly, can help your business grow its customer base and raise awareness of your products.
It’s not a surprise that a great number of businesses around the world are inviting their existing customers to refer their friends to their business.
Overall, referral marketing can be used as a creative way to drive growth for your business.
If you can’t wait to know more about the magic world of referral marketing, we suggest that you read our Referral Marketing Wizards ebook.
It’s free to download and it can help you get some of the ideas we discussed in this post to the next level.
Let’s close with some final thoughts.
There you have it!
We’ve taken you through various aspects of eCommerce referral programs, including a definition of such a program as well as the benefits it can bring to your eCommerce business.
As you’ve read already, referral programs are great for eCommerce businesses as they boost customer retention and can also help increase sales.
In this post, we’ve seen several examples of companies that are already making the most of their eCommerce referral programs.
Plus, we’ve given you access to our free Referral Marketing Wizards ebook.
Before you go, feel free to request a demo with us to put the theory into practice and start seeing for yourself what referrals can do for your business.
If there’s anything we didn’t cover in terms of eCommerce referral programs, feel free to reach out and let us know.
Thanks for reading!
Written by:
Nikitas is responsible for growth at Viral Loops and also helps customers on 1-on-1 basis to reach success with their referral campaigns. Let's connect on LinkedIn
