A guest article by Raul Galera, Partner Manager at ReferralCandy. ReferralCandy is a referral marketing tool that gets you more customers by incentivizing referrals. Carson is part of the ReferralCandy Experts network. Check out our expert profile here.
How do you get your eCommerce business off the ground?
Would you consider a sponsored video In Buzzfeed for a whopping $254,000! Or, would you buy a placement at Twitter’s promoted trends section for $200,000 a day?
While these online strategies can get you a lot of exposure, they’re not worth it.
Sure, it gets a lot of views. But do they incentivize viewers to buy your product?
At ReferralCandy, we believe that the most effective marketing strategy is word-of-mouth.
After all, when was the last time that you bought a product based on a friend’s recommendation? When was the last time that you were asked about an item you bought? I bet it was not that long ago.
Whenever you're out to buy a new product, you immediately seek the recommendations of friends and family. You want to know their experiences. You seek their advice.
That’s because they're the ones you trust the most.
In fact, a Nielsen study found that 67% of consumers believe that they are likely to purchase items that have been shared by their network on social media.
This works both ways.
I bet you love to talk about products you love. Not only because you genuinely love it, but also because you know that your advice and experiences can make somebody's life better.
This is why referral marketing works in a nutshell.
By setting up a referral program that rewards customers who promote your product, you are able to expand your business' customer base.
A successful word-of-mouth sales strategy can become one of your main revenue generation sources. Let’s take a look at a couple of examples:
Our customer Critical Pass—a brand that sells flashcards to Bar Exam takers—has so far generated 24x ROI. Their referral program now accounts for 10.42% of revenues and 10.05% of orders.
Success doesn’t happen overnight, though. We have actually seen a retailer start their referral program and not have any progress for the first few months before getting hundreds of referrals in a single month.
What can you do to make this happen?
First of all, you need to make sure that both your positioning as a brand and your referral incentives are very clear.
If your customers don’t know by heart what’s differentiating you from your competitors, they will have a hard time referring your product to their friends. Are they referring you because you have a very high-end product? Is it because your product is cheaper than your competitors? You need to make their pitch very clear.
Second, they also need to know what they are getting out of your referral program: is it a discount? A cash incentive? Make sure it’s easy to understand and that the incentives are clear for both the advocate and the friend.
You will also want to adapt this to your customers’ purchasing behavior. If your product is something that your customers buy periodically, a discount will be a better incentive than a cash reward.
And lastly, you need to constantly remind your customers that you have a referral program they can benefit from.
Email blasts, calls to action on your website, or just by spreading the word on social media. You can also combine some of these options depending on your customers’ demographics.
ReferralCandy’s automation features enable you to run referral programs smoothly without being managed constantly. This way, you can focus on creating products and growing your business, with the knowledge that your customers will promote your brand.
As more people continue to rely on online referrals, we’ll be here to help you run a successful referral program with the least amount of time and effort. And, to make it even easier for you, If you sign up using this link within the next two weeks, you can enjoy a 30% discount on your first three months, on top of our 30 day free trial.