Referrals are incredibly important in ecommerce.
For a start: they’re proven to work. Your loyal customers, or ‘brand advocates’, are the most powerful form of advertising your business has. Just look at the results of this Nielsen Study from 2016:
- 82% of all consumers (and 92% of 18-34 year olds!) seek recommendations from friends and family when considering a purchase.
- 67% are a little more likely to purchase a product if their friends or family have shared it on social media or via email.
Referrals are all about trust
Referrals have a powerful return on investment because they’re ‘trust’ incarnate. This is especially true in ecommerce. The first consideration the vast majority of consumers have when making a purchase is whether or not the business they’re about to do business with can be trusted.
Sure, in the bricks and mortar world of retail we can safely assume that most businesses are legitimate. They have a shop. They pay rent. You can see the product you’re about to buy. There’s a real life, walking, talking person standing behind the till. But online? In a world where any thirteen year old with a laptop can make a website, you’re going to want to be pretty damn sure you know who you’re handing your card details to.
Online reviews can be fabricated. Websites can make spurious claims. But if someone you know and trust tells you they shopped with a business and loved their service and product, you know you can believe them.
Unfortunately, you can’t rely 100% on your customer’s loyalty alone to spread the word. Even if you have the world’s best product. Sometimes, your customers – even your happiest customers – need a little push.
Choosing the right customers for referral campaigns
Asking all your customers in a social media update or email blast to tell their friends about your business isn’t going to net you particularly good results. You need to ensure you’re only asking your most loyal customers for referrals, so as to not risk coming off as desperate or annoying anyone.
The best metric to gauge a customer’s loyalty is their lifetime value. A customer who’s purchased twice is likely happier with your products than a customer who bought once, and then dropped off the radar.
Protip: If you haven’t already connected your ecommerce platform with your email marketing platform – do it today! You’re missing out on putting to use some of the most valuable data available on your customers!
Sure, you could create a segment of all your customers who’ve purchased three or more times, and send off a single referral campaign hoping to get a boost in customers. But then you’d be missing out on referrals down the track. And besides – those who purchased three times, but haven’t bought anything or engaged in the last 6 months probably aren’t going to drop everything to start singing your name from the rooftops.
Instead, let’s take a look at ways we can ensure that a referral campaign is sent to EXACTLY the right customers, at EXACTLY the right time.
This looks like a job for Marketing Automation
It sounds difficult, but this level of targeting can be done quite simply with Marketing Automation.
By integrating your ecommerce platform with your email marketing platform, you should be able to set up an automated flow that will fire off your referral email as soon as your customers have made the appropriate number of purchases.
This ensures your marketing is consistent and relevant. Sending campaigns as soon as a customer reaches the perfect point in their journey with your brand ensures your campaigns are working a peak affectivity.
Plus, if you want to optimise your flow at any time, you can be sure your changes are across the entire board.
What makes a great referral campaign?
Depending on product, brand and business model, the perfect referral campaign will look very different between ecommerce stores. But for the sake of this article, let’s give you an example of how one might go for ACME Widgets Inc.
ACME Widgets Inc. sell a range of disposable widgets. Happy customers generally repurchase every few months – and they have quite a loyal following! So ACME decide to set in place an email automation.
This automation is triggered when a customer has made their third order – ACME are confident they’re definitely enjoying their product by that stage, so they know these are the types of customers they can hopefully turn into brand advocates.
The email is quite simple. It’s well designed and fits the ACME brand perfectly. Simple, straightforward copy asks the happy customer to refer a friend. It promises that if they give them a friend’s email, both that customer and the friend will receive a small discount on their next order.
Alternative tactics might be to share their website on Facebook, (or even leave a positive review), but we have found for the best results, asking for the email address is the most effective. However, you’ll need to ensure your flow is set up to allow the new lead to opt in to your marketing service properly before you add them to any of your lists! (Get in touch and we can explain in greater detail).
Do referral campaigns work?
We’ve implemented ‘Refer a Friend’ automation campaigns for many of our clients. As both data capture and sales tools, they work. And not just for ACME widgets. We’ve implemented similar strategies for everything from boutique swimwear to DIY lift kits for Hilux utes.
Get in touch with us today for more information on setting one up for your own ecommerce store! Our strategists would love to have a chat with you about how you can implement something similar for your business. Trust us – you don’t want to leave referral revenues on the table!