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5 Brilliant Reasons to Prove Referral Programs Can Acquire New Customers

Posted by Monisha Thangavel on  December 23, 2020  in Marketing


Customer acquisition through referral programs is nothing but people referring people. Undeniably, this is the foremost concept of referrals. Nothing can beat the trust gained from a friend’s recommendation.

According to Mark Zuckerburg, a trusted referral is the holy grail of advertising. Many eCommerce stores have been exploring ways towards multiple channels to promote their brand/store.

Why? Aren’t they aware of sticking towards a single platform?

As it turns out good, many eCommerce store owners have been depending on the most cost-effective concept, referral marketing. Moreover, people are 4 times more likely to buy from an eCommerce store referred by their close friends or relatives.

When an eCommerce business taps into their customer’s existing interactions, then it pairs up with the referral program. Vastly, the word of mouth marketing and the referral program increases to improve customer acquisition at a lower cost than traditional marketing.

Let us dive into the article to know more about the reasons why referral marketing comes first in every marketer’s mind.

Referral Marketing vs Lead Generation

Often, marketers and eCommerce store owners come across the terms of referral marketing and lead generation. Both terms are nothing but playing with the concepts related to customer behavior.

Using referral marketing is a sort of lead generation strategy that might result in a way that benefits both customers and the eCommerce store owners. With the help of lead generation, the marketer will get a list of contacts and nurture them as their potential customers.

On the contrary, the referral program generates new customers through their potential ones. Referral marketing uses its potential customers as an aid to bring new customers to their store. Through amazing referral coupons and discounts, referral marketing has become a smooth way to promote their business brand and find new customers elsewhere.

So far we have discussed the importance of referral marketing and lead generation. The difference between them is not a null point to consider. Instead, focusing on what the eCommerce store needs are more important.

Continue the article to know how effective a referral program works to grab the attention of new and potential customers back to your store.

Why Referral programs get more subscribers than lead generation?

Customer acquisition has become a cakewalk for an eCommerce store owner through a referral program. When an eCommerce referral program has a better reach, it has a high tendency of getting new customers. It also satisfies the potential customers and makes them proud to be your store’s customers.

Referral marketing becomes the most powerful marketing tool when compared to other lead generation tactics.

Do you know why? It is because,

  • No more tricky marketing steps. As easy to set up as your phone’s wallpaper
  • No more manual assistance. They run on their own with detailed reports
  • A cost-effective way to increase your customer acquisition rate
  • Rather than walking behind influencers, make your customers loyal to your store

Still, there are some store owners who haven’t tried the referral program yet. Their prime question seems to be, why do I need a referral program?

If you are one among them, the enlisted points lighten you with the reasons to start a referral program today.

Information from the closed circle is more trustable

Have you ever tried any brand recommended by a stranger? Probably, there are chances to skip. But, what is your reaction when your close friend or your spouse recommends a brand?

Absolutely, there is no backway, right? This is how referral marketing actually works. When a person recommends a particular product, the urge to try it becomes higher. In order to make it more triggering, many eCommerce store owners have taken the route of providing attractive discounts.

According to Nielsen’s study, approximately 92% of consumers from myriad markets tend to believe people around their circle. Because people are aware that their closed ones never mislead them with the wrong brand.

When 30% of the internet users use ad blockers, referral marketing and word of mouth marketing seem to take the throne to gain sales prospects for your eCommerce store.

Easy promotion opportunities

Compared to an eCommerce store’s customer acquisition strategies, referral programs seem to have more promotional opportunities. Say, social media platforms become a great way to promote your referral program.

Though the users do not follow the brand separately, they will get attracted to your referral marketing program when they are personally engaged with your brand’s influencers. Giving your brand advocates the reason to share your referral marketing program becomes a wise decision.

Almost 76% of the individuals’ survey says that they are more likely to trust the testimonial of a normal person rather than the top paid promotional influencers. Many eCommerce sites have been thriving to have a place in social media.

A referral marketing program will become a reason to do so. Many referral program plugins will make it incredibly simple to automate and track your referrals.

Referrals have high chances of turning into a potential customer

Referral marketing programs for an eCommerce store help in building social proof for the customers in the queue. When a new referral shares a store’s referral program to their social media audience, they will feel inclined to check out. This is the high-end to grab the new customer’s attention and transform them into your potential audience.

In order to do so, you can bring in a second purchase coupon or any attractive discounts with colorful popups. The eCommerce store owner can rely on the referral program software that helps in automated emails to the customers with attractive offers.

It will make them come back again to your website. Using the referral program software, it is easy to select the referral program incentive type that the eCommerce owner wishes to offer. And, the referral program statistics will be available in the dashboard for easy monitoring.

Referrals breed more referrals in a cost-effective way

When an eCommerce store owner comes across other marketing strategies, he/she will understand how affordable the referral program marketing is and it can also bring you new customers & huge profits during festive seasons like Black Friday/Cyber Monday.

Customer acquisition is a huge responsibility that tends to bring in profit and visibility to your store. In that case, customer referrals are like a snowball rolling down the hill. It will surely gather more snow when it comes nearer. This is how referral marketing has to be handled.

When your eCommerce store referral program reaches a particular customer, it will spread to their closed circle. And, the circle gets bigger and bigger unless you stop interacting with your customers.

Though they are existing or new customers, provide them with offers according to the category. There are some eCommerce sites that provide offers dividing the customers into existing and new customers. It actually works well. Give it a try!

Customers take the responsibility to bring more referrals to your store

There is nothing more flattering than touching your customer’s ego. When an eCommerce store owner asks for referrals thereby complimenting them, there are high chances of them referring more referrals to your store. Every existing customer takes the responsibility to promote your products as their own.

No, they are not doing it for free!! Of course, they are getting benefited with huge compliments in the form of discounts and offers. Moreover, try to give a more positive experience to your new customers.

It will help them share your store in all possible mediums. Increased visits to your eCommerce store will help in building loyalty with increased customer retention.

Irrespective of the compliments or the add-on offers, the positive experience in your store helps the existing customers to make you feel special. The existing customers have the power to spread your brand to their closed circle.

5 Stellar Referral Program Examples to look at

Using the referral program marketing aptly, many businesses have stood straight thereby yielding its benefits. Using the referral program, the eCommerce store owners can gain increased ROI and thereby get an increased customer base too.

Here are the examples that showcase how the referral program benefited their eCommerce store well in increasing their sales.

Adore Beauty

Adore Beauty, an online beauty store, has been amazingly using the referral program to increase its customer base. With its 128k followers, reaching a huge audience and promoting its referral program seems a cakewalk.

Adore Beauty Refer A Friend

Their marketing strategy involves providing new deals and discounts to the new customers and thereby benefiting the potential customers too. The customers will get a $10 reward for every referral.

Threadbeast

Threadbeast, a fashion subscription box with a personal stylist, lets the users create their own style profile to assemble a unique package along with a personal stylist. Attracting the fashion audience seems a daunting task as multiple brands circulate among the audience.

ThreadBeast Contest

In that case, Threadbeast’s referral program seems to be a much promotive and attractive feast for the audience. Threadbeast’s referral program provides its brand advocates with a $50 reward for their first package. Added, they will also receive a free package in exchange.

Ztylus

Ztylus is an eCommerce store that includes multifunctional phone cases, add-on lenses, and other smartphone and car accessories. Their unique discount system helps the audience to get attached to their accessory purchase.

Ztylus Rewards

Ztylus has an amazing referral marketing program that resembles an affiliate program. Referrers will share a code and receive a 10% commission as a bonus for the purchase made by their friends or their fans. Referred shoppers will save 25% on their first purchase too.

Leesa

Leesa with its unique approach grabs the attention of its audience through the referral program. They donate one custom-made mattress for every 10 mattresses they sell. It supports the homeless and individuals at risk.

Leesa discounts

Added, Leesa partners with the Arbor Day Foundation to plant trees in order to support local community-focused organizations. Their referral program is equally generous as its unique donation. They allow their referrers to give a $100 discount to their friends. Here, Leesa will pay the referrer with $50 in cash through their PayPal account.

Harry’s

Harry’s, more than a shaving brand, has been pairing up with a subscription service to increase their customer base. Harry’s referral program has been intended to fuel its launch. They have offered an increased reward system that attracts many users.

Harry's Rewards

It encouraged them to refer to plenty of individuals as possible. Through their immense reward system, the program has turned out to be a massive success. Through the single referral program, Harry’s has generated around 100,000 leads. Referrers received a free shaving cream when they successfully referred 5 friends. They would also gain around 10% off on their first purchase.

Key Takeaway

A Referral marketing program becomes an effective way to tune your potential customers. When an eCommerce store owner leverages their users, their friends, and family, you can multiple one sales into a countless number.

All you need is a plugin with great referral features. It is the best way to get more customers thereby supercharging your word of mouth marketing.

With the help of the referral plugin, the eCommerce store owner can choose between multiple reward systems and customize their campaign with easy monitoring. Why not start a referral program for your eCommerce store and experience the benefits out of it?

Nothing is too delay! Create the referral program for your eCommerce store now.


Author Bio
Monisha Thangavel 
Monisha Thangavel
Monisha Thangavel is an ardent writer and a blogger carrying years of experience in different realms including eCommerce, Tech, and SEO. Her brevity rich writings flash a light upon the uncovered yet important points about WordPress and eCommerce plugins. Apart from content, Monisha spends her free time learning calligraphic writing.

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