Best practices

How to Acquire Customers Through Effective Referral Campaigns

Referral marketing campaigns are often confused with lead generation strategies. Referral programs generate leads, customers and fuel revenue growth.

See the title of this blog? Notice we used the term “customers” instead of “leads” — that’s deliberate. Turns out, referral marketing campaigns are often confused with lead generation strategies. But referral programs don't just generate leads; they generate legitimate customers and revenue. Yes, lead gen yields interesting contacts, but cultivating those prospects takes time. With referral marketing, however, pre-existing customers promote your brand. 


In short? Their friends become your new customers. 


Really, referral campaigns are an eCommerce marketer’s dream, because the heavy lifting is done among a company’s existing customer base. These current customers, also known as brand advocates, create a ripple effect: One customer refers your brand to a friend, and as this continues, your campaign quickly becomes a self-replicating customer acquisition machine. 


Interestingly, your referral campaign doesn’t actually need huge advocacy rates to see big revenue gains. In fact, Talkable’s practice suggests the top 1% of your most active advocates generate up to 20% referral revenue, on average.


With all of that in mind, a referral program is only as successful as the promotional efforts behind it. Luckily, we’ve provided best practices behind promoting your program effectively.


Promoting Your Program

Arguably, properly promoting a referral program is the most effective way to bring in new business. The good news? It’s also pretty easy. 


First, make sure you’re shouting about your program from the rooftops — your website, that is. We recommend doing this by:

  • Adding floating widgets, site-wide, on both desktop and mobile
  • Creating post-purchase pop-ups
  • Building a stand-alone landing page
  • Promoting via an account dashboard so advocates can track their referrals

How to Acquire Customers Through Effective Referral Campaigns

Additionally, add various calls to action (CTAs) across your site that drive traffic to the aforementioned landing page. Prominent placements include inside navigation bars, banners, headers, footers, carousels, and product pages. 


We also suggest promoting your referral program (particularly its respective landing page) off-site via email and social media. Send a welcome email announcing the launch of your referral program. Following that, send quarterly email blasts to your existing customers to drive referrals and engagement. (More on email optimization later on!)


Be sure your referral marketing strategy also includes social media efforts. Promote your program across all relevant platforms in concise, creative ways through social posts, organic and paid ads, and more.


Creating a Strong Offer

So, your promotional efforts are running smoothly, but customers aren’t sharing and referring your brand at the rates you’d like to see. What’s the catch? Perhaps it’s the offer itself. 


Here’s how to check whether your offer is suffering, plus ways to improve it:


  • Test the offer for advocates and/or friends to pinpoint whether it’s the reason no one is sharing 
  • Increase your brand’s friend offer — it could actually be more effective than the advocate offer
  • Offer a 20% discount — our recommended best practice — on your average order value as a percent or cash discount, but don’t forget your purchase threshold. If your minimum order requirement for friends is too high, first-time customers may not want to risk purchasing from your site.


Recognize, too, that motivating customers to spread the word about your brand won’t be successful unless you understand what makes them take action. What’s more appealing to them: a dollar-off reward to use on your site or an e-gift card to use elsewhere? It’ll take a little research to find out, but sending a short survey or poll can yield accurate results a little faster. 


Optimizing Your Campaign Emails

Earlier, we touched on the use of emails in your referral campaign, but we recommend going much deeper. Optimizing your campaign’s email workflow could mean the difference between good and great referral ROI. 


So what does this look like? 

  • Personalization
      • When it comes to subject lines, personalize them! In your “friend” workflow, add a brand advocate’s name, like: “Anna just sent you 20% off!”
      • In the email’s body, use the friend’s name for added personalization: “Hey, Sam — here’s your discount!”
      • Don’t be afraid to add emojis to your subject lines where it makes sense: “Anna just sent you a surprise gift! 🎁 ”
  • Keywords
    • Consider including the following keywords in your emails:
      • Congrats! You’ve earned 20% off at Talkable!”
      • “You got a surprise gift from your friend, Anna!”
      • Get your 20% off!”
      • Important! 20% off from your friend Anna!”
  • Email body 
    • Your intro paragraph should only be 2 to 3 sentences long and include the most important information, right out of the gates.
    • Keep sentences and paragraphs short. Make sure they’re easy to read, and remove any jargon or marketing “speak.”
    • Your CTA buttons and directives should start with action verbs, like:
      • Get my 20%”
      • Shop now”
      • Find my apparel”
      • Start shopping”
  • Considerations
    • A/B test any plain-text emails. While they may not look as pretty and branded, they can help your referral emails feel more personalized. They also tend to increase click-through rates.


Improve Your Campaign Even More: Test Everything

Any good marketing initiative should include a series of A/B testing to see if one swim lane works better than another. So while most facets of your referral campaign should leverage A/B testing (i.e., does one email workflow work better than another for the same audience?), the most crucial aspect to test is, of course, your referral types. 


Begin A/B testing your offers to discover which reward types work best for your target audience. You can also perform A/B tests on different referral web page designs to discern which version advocates find more appealing. 


Additionally, updating copy across your site and other collateral can improve the number of customers who click on your offer (and ultimately sign up). We recommend including your advocate offer in a CTA button — “Get $10” or “Earn $10 Now” — because this tends to spur intent to sign up and share.


As you A/B test, be sure to avoid a common mistake we often see eCommerce marketers make: appealing to an “average” audience. In other words, we encourage you to make segmentation and personalization essential elements of your A/B testing efforts. And there’s a big reason for this: 90% of customers are more likely to shop with brands that provide relevant offers. 

How to Acquire Customers Through Effective Referral Campaigns

Bottom line? The more relevant and tailored your referral offers, the more likely you are to enjoy loyal repeat customers. Consider basing your A/B segmentation around:

  • Behavior: This gives you insight into the behaviors of advocates, occasional buyers, and first-time prospects when interacting with your brand. 
    • Talkable example: We send a promotional email to advocates who have attempted to refer a friend but weren’t able to get that friend to purchase. The limited-time promo allows unsuccessful advocates to share a stronger discount.

  • Purchase history: This helps determine whether targeted referral prospects are, in fact, first-time buyers or if they’ve occasionally purchased with your brand. 
    • Talkable example: If an advocate is unsuccessful in getting a friend to make a purchase, we’re able to identify whether that friend is actually an existing customer, and we instead provide a free shipping coupon instead of a “$X off” new customer offer.
  • Share history: Use this segmentation to find out who’s sharing about your brand’s referral program and offers. 
    • Talkable example: We can check the share history of any customer as they check out. That way, different offers can be shown post-purchase based on whether customers have previously seen an offer or if they’ve shared it. 
  • SKUs: By identifying what a customer is shopping for, you can start creating custom post-purchase ads and pop-ups specific to your brand (we’ve done this!).
    • Talkable example: When a site has multiple product lines and SKUs, we can track each product category and show imagery or an offer relevant to customer buying patterns. 
  • Location: Update your referral campaign’s messaging to reflect a customer’s location.
    • Talkable example: We can promote locally relevant events or stores and have displayed different offers or context-specific images as it relates to a location. 


Many eCommerce companies we’ve worked with have not only deployed these referral campaign methods, but they’ve also found great success in them.

rothys     toms     colourpop

If you’d like to join the ranks of successful brands like these, contact the Talkable team to learn more.

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