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.
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:
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.
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:
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.
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?
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.
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:
Many eCommerce companies we’ve worked with have not only deployed these referral campaign methods, but they’ve also found great success in them.
If you’d like to join the ranks of successful brands like these, contact the Talkable team to learn more.