You put a lot of effort into creating a great product that you know people are going to love and one that will create value for your customers. You’ve also created a great Shopify store to sell this product. You have thought of a business plan, thought of ways to provide great customer support, implemented social sharing, and ways to improve end-to-end customer experience.
But all these matter only when people are already on your Shopify site and make a purchase. Marketing your store and products to new customers to drive traffic is one of the most challenging part of selling your products. A lot of money can be wasted on marketing agencies, online ads, physical and media campaigns, and marketing staff, especially when you’re starting small.
In such cases, you may get the most return on your marketing investment by starting a Shopify referral program for your store that rewards people for sharing your brand and products with others.
What are referrals and why do they matter?
Think of your day and how many times you make recommendations to your friends about food, movies, a new gadget you’ve purchased, clothes, and more; your customers can do this for you, and you can reward them for it. Encouraging referrals directs new customers to your store by someone else – usually someone they know who has tried your products.
Giving recommendations and listening to others’ recommendations is part of daily social interactions. If we have a good experience with a product or a purchase, we tend to share that experience with others. We are much more likely to try a product if someone we know and trust has already tried it and shared a positive experience.
According to a Neilson report about influence of various forms of advertising, 84% of people said that they trust recommendations made by someone they know.
Recommendations made by people we know is the most trusted source of advertising, well ahead of brand websites, and online or TV ads.
Since referrals are one of the most trusted sources of advertising, they should be one of the first areas of focus for marketing your store. Referrals are not limited to just a few trusted people, but can come from a number of sources, including friends and family, critics and bloggers, news publications, testimonials and online reviews.
Who uses referrals?
Most online brands use referrals these days to incentivize sharing their products and services. Referral programs provide rewards to customers for sharing and creating new leads. Most brands only reward existing customers when the person they refer has made a purchase or signed up for a service.
You have probably used a referral program to get a reward without thinking twice about it. Referrals don’t always mean a cash reward or incentive, they can also mean additional features or free access to a subscription.
Here are a few brands that use and promote referrals as a big part of their growth strategy:
Uber, a popular ridesharing platform, provides its existing customers with a personalized promo code. If someone else uses this promo code for their first ride with Uber, both the new customer and the existing customer get a free ride up to a certain value.
Dropbox, a cloud-storage service, gives its customers additional storage space, up to a certain limit, each time someone new signs up using a promo code.
Everlane, an online clothing store, gives customers a store credit on their account when someone else makes a first purchase using the referral code.
Okay, referrals work. What do I do now?
Your customers know your products better than anyone else. Your happy customers are the best advocates for your brand.
One of the first things you can do to convert your customers into advocates is to make it easy for them to share their experience with your brand. Once a customer completes an order in your Shopify store, instead of displaying the generic ‘Thank you’ screen, you can use our Happy Checkout app to embed social sharing buttons. This allows your customers to easily share what they have purchased and advertise their experience.
There are a number of ways for you to build customer loyalty, and adding a referral program to your online store can not only incentivize repeat customers but also bring in new sales. Referrals allow you to give your most passionate customers one more reason to align themselves with your brand.
Just like in the above examples, there are a number of referral rewards you can give your customers, and a number of Shopify apps you can use to implement and track these. Typically, these apps generate a unique code or link for each customer that they can share. Whenever someone else makes a purchase using this code or link, your customers get a kick-back that you can specify.
Some popular referral program apps for Shopify are:
- ReferralCandy – starts at $25/month, 30-day free trial
- S Loyalty: Refer-a-Friend – starts at $9.99/month, 14-day free trial
- Friendbuy Customer Referral Platform – starts at $99/month, 30-day free trial
- LoyaltyLion – Loyalty Program – starts at $39/month, 14-day free trial
- Forewards – 5% of referral revenue, first $200 free
- Ambassador – Custom pricing starts at $99/month for 250 Ambassadors, 14-day free trial
You can pick one of these Shopify apps to track and manage your referrals. These apps have a number of features to help you easily set up and maintain your referral marketing.
Here is a quick video by ReferralCandy that explains their platform and the options you get from using their app.
Word of mouth is the most trusted way of marketing to your potential customers and is typically the best targeted marketing for your products. Most major online stores and brands offer referral incentives. These are quickly becoming the norm as more brands compete for customer’s attention every day.
There are a number of Shopify apps that can help you implement and maintain a referral program for your store. If you don’t start one, your competition will. Remember, not all such programs offer cash rewards. You can offer different things as incentives depending on your product and business model. Incentives can be cash rewards, store credits, subscriptions, complementary products, digital versions of physical products, etc.
If you already use a referral program for Shopify, we would love to hear about your experience in the comments.
Latest posts by Jai Sangha (see all)
- Add Trust Badges to Your Shopify Store [2019 Edition] - June 20, 2019
- 3 Tips to Improve Your Shopify Store SEO - March 23, 2017
- March App of the Month: Show Instagram Feed on Shopify - March 15, 2017