Referral marketing: 7 tactics for success

Referral marketing is an incredibly effective form of marketing for increasing sales and conversions. Referral marketing is about purchasing products based on someone else’s opinion or influence. It’s a powerful marketing channel because people trust the opinions of other people in their lives and those they respect, such as family, friends, social media influencers or celebrities.

It makes sense, as we regularly get advice from our friends on which TV shows and films to watch, or what restaurants to go to. And, as consumers ourselves, we want to share our stories, the products we buy and the brands we choose. This becomes magnified when the buying experience and products are exceptional.

In this blog, we’ll discuss the fundamentals of referral marketing and outline 7 growth hacking tactics to supercharge your referral system.

Why is referral marketing so powerful?

Let’s take a look at the three main reasons why referral marketing is such an effective channel for ecommerce brands:

Precision targeting

Have you tried using Google AdWords or Facebook Ads and only seen a minimal return? Often, this isn’t the fault of the platform – it’s likely not targeting properly. A great marketing campaign involves two key components, a strong message and precision targeting.

Referral marketing tends to be much more targeted because generally people trust their friends and social audiences enough to take actions. This allows your brand message to spread more effectively than with most other marketing channels.

Trust factor

Trust goes a long way to convincing someone to buy something. If we don’t trust someone, we aren’t going to listen to them. Consider the last time you were cornered by a salesperson you know is on commission. You likely had doubts about their authenticity, due to a lack of trust. With referral marketing, the sales pitch is usually coming from someone that you either know well, like friends and family, or someone else you trust, like your favourite blogger.

Remember, referrals aren’t just limited to friends and family. They can come from a variety of other sources, such as:

• News publications
• Customer reviews and opinions posted online
• Influencer opinions (bloggers, social media influencers)
• Testimonials

Reach and acceleration

Until fairly recently, the reach of a typical consumer was limited. For the most part, it was contained to the number of people they saw in person each day or talked to on the phone. Now, the average consumers’ reach is much larger and, for many people with strong social communities, their reach can be huge and can make or break a business by what they say about it online.

7 growth hacks for referral marketing

Implementing your own referral marketing strategy to increase referrals and sales isn’t difficult. Here are 7 growth hacking tactics to supercharge your referral system:

1. Provide exceptional customer service and an awesome buying experience

At the core of effective referrals are great products, exceptional customer service and a great overall buying experience. This is fundamental to any referral campaign. Evaluate the customer experience of your own website, looking at it from a customer perspective and ask yourself, “what’s worth sharing with my friends?”

2. Pay attention to your analytics

You’re probably already regularly getting referrals and you just don’t know it. Google Analytics has a whole section on referrals that can help you pinpoint other sites that are linking and referring people to you. This report can be can be broken down to not just visitors but customers as well, giving you a deep understanding of which of the referring websites are the most qualified.

With this knowledge, you can reach out to those sites and work out a plan to acquire even more traffic. For example, you may work out:

• Additional mentions in upcoming posts
• Guest blog posts
• A profit sharing affiliate/referral programme

3. Make your products and product experience sharable

There are many ways to create a wow factor for your customers. Consider your packaging and unboxing experience. How can you turn it into an enjoyable part of the buying process? Bear in mind an awesome unboxing experience makes for a great photo to share on Instagram and other social networks.

4. Make it easy for visitors and customers to refer your brand

Make sure you make it as easy as possible to share your products and refer your brand. Consider quick-win tactics like adding social sharing badges to every product page, as well as bigger initiatives like, for example, Charlotte Tilbury’s “Tag a Tilbury” feature, which allows users to tag products in selfies and posts on different social channels, which then appear on the website, if selected/verified by the administrators.

Read our blog: Boost your ecommerce website performance with customer reviews and UGC. 

5. Implement a referral program

Sometimes people need a nudge. Providing rewards for referrals can be just the thing to get your visitors and customers sharing your brand with their friends and family. You can increase customer loyalty, reach and conversions by offering rewards through a referral or loyalty program.

6. Capitalise on influencers

Influencers within your niche can be a goldmine of referral traffic and sales. The key is to find influencers whose following is as close as possible to your target market.

You may not be able to afford to pay David Beckham to refer your product, but there are plenty of other influencers (and micro-influencers) out there with smaller, loyal audiences. Influencer marketing can be as easy as reaching out to a popular blogger, YouTuber, or Instagrammer and asking if they do sponsored posts or would like to review your products.

7. Reviews are referrals too

People often trust what other customers say about your company more than what your brand says, so encourage users to leave customer reviews after purchases. After all, social proof is the glue that binds referral marketing together.

Summary

Referral marketing is a powerful and important component for every business. Implementing some basic tactics and growth hacks can help encourage and facilitate the referral process, which can be a major source of new sales.

Want more inspiration on growth hacking across different ecommerce channels? Download our omnichannel retail report now and get inspired by cutting-edge ecommerce strategies!

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Space 48 is a leading UK ecommerce consultancy, based in Manchester. Specialising in Magento website development, we create award-winning omnichannel strategies for top brands. Why not get in touch with our ecommerce experts and see how we can increase your website performance?