Aleksandra Velkova on March 13, 2023
With 84% of customers trusting recommendations from family and friends more than brand-led advertising, it's no wonder referral marketing has become the go-to way to acquire new loyal customers. To maximize its effectiveness however, your strategy must include a few important considerations:
Attractive, data-backed double-sided incentives
Branding of the program to promote that “tribe” feeling
Awareness of the program
Ease of access and use
Designed to enhance the overall customer experience
With this in mind, I’m sharing 13 creative customer referral program ideas you can try out to boost your referral program’s performance.
When you’re setting the incentives for both sender and receiver of the referral, you should be able to answer 2 questions:
How much are you willing to pay for a new customer?
Do you know what would motivate your customers to spread the word about your brand?
You can draw insights on how much you’re willing to pay for a new customer from your existing advertising campaigns.
And to get a sense of what would motivate your customers to spread the word about your brand, you can do a survey, analyze existing trends in your industry and check what’s the most frequently bought product from your store.
Combine these insights and experiment with 2 types of incentives: a discount and a free product. See which incentive type performs better in driving more successful referrals to your store.
If your incentive is a discount or a free product, consider reinforcing that with points for every successful referral. This is a great way to boost the repurchase rate (since senders will get a discount code for the successful referral) but also to increase the hype about the other potential rewards or VIP memberships they may become eligible for by adding more points to their balance.
Who doesn’t love the feeling of reaching a milestone!
Create a goal referral structure for your existing customers; offer better rewards as they refer more people to your brand. This tactic is especially effective if your product has a high buying frequency; senders would be more motivated to drive successful referrals to acquire rewards for their next orders.
Ease of access when it comes to an online referral program is key.
Don’t hide your referral program where no one can find it - that’s not the purpose of it. Make sure anyone who lands on your site and browses your products is able to make a referral. Even if they’re not a customer, they may still benefit from referring your brand to friends and family they know will love your products.
We at Lootly, highly recommend to prioritize ease of access to your program in order to allow your customers to engage with it at their convenience. If you’re using Lootly for your referral program, you can utilize the side tab referral method to deploy this tactic.
Your referral program should have its own house on your site. Consider this to be the page you’ll be sharing in communications with customers, in ads, in blog posts or even in videos!
Also, this will be the point where anyone who is interested can share a referral - they don’t necessarily have to be a customer yet. Brand it, own it and easily embed it on a dedicated page, making sure it’s easily accessible from your site.
You can do this with 2 goals in mind:
Drive awareness of the program
Boost sales with incentives you already know are working
Remember, it’s not just your existing customers who should benefit from your referral program. Expose it to as many potential customers as possible, especially after you’ve run it for a while and you know that your incentive is exactly what makes people tick. Use your referral program incentives as leverage in your ad copy and ad offer.
You can safely assume that people who have subscribed to your SMS marketing are slightly more loyal to your brand than those who haven’t. They’re engaging with your brand on so many different channels already right?
If you're not doing SMS marketing for your ecommerce brand, you should consider staring. Consumers use their mobile devices for virtually any activity today, and communication is almost completely on mobile. Therefore, SMS as a channel drives higher deliverability rates, higher engagement and consequently, more revenue.
So, using SMS as a channel for asking referrals is a great referral program idea; if you’re a Lootly client and are using a tool like Attentive for your SMS marketing, harness the power of a direct integration to get all the relevant data points for your customers into their Attentive profiles and run your campaigns with ease.
Customers are most hyped about their purchase right after they place the order. So, why not try to capitalize on that excitement? Keeping the principle of flawless customer experience in mind, add a popup to ask for a referral after the customer lands on the thank you page.
This is my personal favorite of the 13 referral program ideas shared in this article. Social media is a powerful tool for driving brand awareness and communicating with your audience at all stages in their journey through carefully crafted content strategy.
How can you use your IG channel to run a successful referral program? If you have a large IG followers base, you're looking at a large pool of potential customers and also repeat customers. Your referral program is the tool you can use to engage this audience. Remember, even people who are not yet your customers can benefit from sharing a referral.
So, how do you execute this idea?
Use Instagram Highlights. Since your referral program is your brand asset, treat it as such; give it its own highlight, consisting of carefully designed stories promoting the program's offer supported by amazing visuals.
Bonus tip: use your UGC like reviews for example to support your referral program.
Here’s an interesting fact: post purchase email flows have the highest open rate from all email types. 61% open rate, to be exact.
If you're following the principles of flawless customer experience, you're surely communicating timely with your customers in the post-purchase phase to notify them of their order status. So, why not take advantage of this channel to push your request for a referral? Your customers will surely open the email to check out the confirmation of their purchase, and with some careful, strategic and visually attractive placement of your referral request, you'll make sure your customers know of your referral program and can easily engage with it right at that hype moment from the purchase.
You can add your request for a referral in many ways in the post-purchase email flow. You can choose to link to your referral program page on the site and allow customers to send the referral at their own pace. You can also go a step further and really personalize the experience, by adding the customer's unique referral link in the request. That way they can instantly share their referral code.
Bonus tip: don't limit your placement strategy only to the confirmation email. You can use all post-purchase flow emails to add the request for a referral. Think in the “order shipped” email and “order is out for delivery” email.
Another cool referral marketing idea is to use the packaging as a referral marketing tool.
Packaging is really an undervalued communication channel in marketing and can achieve so much for the brand. The goal with good packaging is to enhance the overall shopping experience and to inspire that "wow" moment when the customer unboxes their offer. If you're able to achieve this feeling, you're motivating your customer to refer a friend!
So, how do you execute this idea?
Place a few cards with the customer's own unique referral code on it so they can share them with friends or family. Use a business card format, brand it and add your messaging on it with the referral code clearly visible. Make sure to add brief instructions on how to use the code on the back of the card. Add a few of these in the package for each order.
Since the referral program is your marketing asset, it makes absolute sense to make it part of your email footer. Bonus points if it’s personalized to the customer! Harness the power of the direct integration with email marketing providers like Klaviyo to make this as easy as possible. This enhances your program's accessibility and visibility.
Have a monthly referral request campaign in your email marketing calendar. You can align your referral request campaign with relevant events happening that month.
Think of it as a different promotion angle of your program each month. For example, you can promote your offer in light of St. Patrick's day in March. Change visuals, test different messaging, but always personalize the emails with the unique customer referral link to make the experience as easy and enjoyable as possible.
For ecommerce marketers, it's essential to provide customers with an unforgettable experience that will have them raving about the brand far and wide. A strategic referral program offers a great opportunity for consumers to spread their love of products while being rewarded handsomely at the same time - making sure your online store is well on its way towards success.
Aleksandra is the Customer Success Manager at Lootly
Whether you are looking to acquire new customers, increase customer loyalty, or drive
new DTC subscriptions, Lootly’s loyalty marketing platform software can help.