POWER YOUR ECOMMERCE BUSINESS
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1 ebook POWER YOUR ECOMMERCE BUSINESS With Referral Marketing Did you know that customers are 4 times more likely to buy when referred by a friend? Learn how to launch a successful ecommerce referral marketing program that consistently delivers new customers at the lowest cost per acquisition. BUY info@rewardstream.com
2 This ebook will show you how to compel your best online customers to refer their friends and family to your brand. You will learn how an ecommerce referral marketing program can: Increase referrals while lowering your cost per acquisition (CPA) Precision target your marketing efforts to your ideal customers Grow loyal customers with rewards and incentives, and increase customer lifetime value. This is your first step toward using digital word of mouth referrals to drive higher conversion rates for your ecommerce site.
3 4What is ecommerce Referral Marketing? The Benefits of an ecommerce Referral 5Marketing Program Nothing Beats The Effectiveness of ecommerce Referral Marketing 6 ecommerce Referral Marketing Delivers The Lowest CPA Precision Target Your Ideal Customers With Referral Marketing 7Identify Your Highest ROI Customers and Prospects Optimize Referral Messaging For Your Ideal Customer 9 Social Grow Loyalty With Referral Incentives and Rewards Benefits for Referring Customers Useful and Relevant Rewards 12 Power Your Referral Marketing With The Right Technology 13 RewardStream s Spark Refer- a- Friend Software Is a Complete Solution See 15X The Conversions With Your New Referral Marketing Program 15 Resources 3
4 What is ecommerce Referral Marketing? ecommerce marketers struggle to build trust through their websites in order to acquire and convert new customers. But what if your sales pitch could be delivered by the friends, family, and influencers your ideal customers already listen to? Referral marketing is a method of reaching new customers through referrals, usually word of mouth. Simply, it is promoting a product or service through your existing customers, rather than less effective spray and pray forms of digital marketing such as display ads, Google AdWords, and social advertising. A digital customer referral program is a system that lets you turn your ideal online shoppers into willing brand advocates. ecommerce Referral Marketing is a proven way to capture new online customers with the power of social media and rewards, such as discounts, product exclusives, loyalty points, and more. Using techniques that you can easily assimilate into your everyday marketing, you can generate qualified, targeted leads referred by existing customers. In a Return on Word of Mouth Study, the Word of Mouth Marketing Association (WOMMA) reports that there are over 2 billion brand- related conversations every day in the U.S.. People already like to talk about the brands and products they use and enjoy. But instead of waiting and hoping that referrals will happen spontaneously, ecommerce marketers can encourage, target, and nurture referrals with an integrated, automated, and customizable referral marketing program. 2BILLION brand-related conversations every day in the U.S. 4
5 The Benefits of an ecommerce Referral Marketing Program Nothing Beats The Effectiveness of ecommerce Referral Marketing First, some facts: 65 % 65% of all new business comes from referrals (Source: New York Times) 16 % The lifetime value of a referral customer is on average 16% higher than non- referred customers (Source: Wharton School of Business) 92 % 92% of people trust recommendations from their friends and family over all other forms of advertising (Source: Nielsen) 70 % 70% of buying experiences are based on how the customer feels they are being treated (Source: McKinsey) 10 x Loyal customers are worth up to 10 times as much as their first purchase (Source: White House office of Consumer Affairs) The evidence is indisputable: Your prospects are far more likely to make a purchase if it was recommended by someone they know. What s more, referred customers will deliver greater value to your brand over time, especially if you shower them with gratitude and rewards. In light of these facts, you must start looking at your existing customers as a de facto sales team for your online store. The greatest benefit of ecommerce referral marketing is that it amplifies the voices of satisfied shoppers to help you discover new customers at the lowest acquisition cost. Consumer trust and satisfaction are more important than ever in our noisy, digital market. That s why Referral Marketing is the most effective of all ecommerce marketing tactics. Even the most elaborate marketing campaigns can t compete with word of mouth. 5
6 ecommerce Referral Marketing Delivers According to the latest in referral marketing research from Demand Metric, 71% of respondents report that referral marketing provides the lowest cost per acquisition of all marketing methods. Digital word of mouth referrals not only cut costs, they make more efficient use of your marketing efforts, add value to your products, strengthen customer relationships, and improve your online reputation. These are priceless benefits for an ecommerce business into today s crowded digital space. You may have heard about the great success that companies like Dropbox, Groupon, and PayPal have had with referral marketing programs. The success of these and many other companies proves that what marketers have long believed about referrals is true: they generate high- value customers at an unbeatably low cost per acquisition. Referral marketing boasts the lowest cost per acquisition (CPA) of all ecommerce digital marketing strategies for two reasons: It costs less to convert referred customers Customers who make referrals are acting as matchmakers for your business. They introduce you to new customers, and help you hit it off from the start. Because your new customers friends, family, and peers of your existing customers, they are likely to have similar interests and will quickly find products and services they want. Referred prospects convert with much less marketing effort than a cold lead, so they bring revenue to your business with less cost to you. Retention is far more cost effective than acquisition When you keep your existing customers happy with a referral rewards program, they feel appreciated and become more loyal to your brand and products. Happy, loyal customers will purchase more frequently, spend more with each purchase, and keep buying from your ecommerce store instead of price comparison shopping on your competitors sites. For many consumers, the personal connection they feel to your brand, and the sense of trust they get from the individual attention you have shown them, is worth spending extra money. Now that you know the benefits of referral marketing for ecommerce brands, read on to learn how you can implement a powerful referral program of your own. 6
7 Precision Target Your Ideal Customers With Referral Marketing One of the best things about referral marketing is that precision targeting comes built in: people tend to share products recommendations with the friends, family, and peers they know will be interested. Your products and promotions are likely to be relevant and valuable within the social circles of your happy customers. So even with minimal effort on your part, a referral marketing promotion is bound to reach qualified prospects. However, there are a few steps you can take to ensure your messages are highly relevant, and reach the right person at the right time through the right digital channel. Identify Your Highest ROI Customers and Prospects When starting your own ecommerce referral marketing program, ask yourself several key questions: When you have identified your highest ROI customers and prospects, you can design and strategize your referral marketing program to speak to their needs, interests, and values. How you contact and communicate with referral program participants, and the types of rewards you offer them will be determined by the unique persona of your most valuable customers. Who are my most valuable existing customers? What type of customers will generate the most lucrative referrals for my brand? What customer segment would I most like to see grow in future? Pro Tip: Use analytics software to track referral activity, including shares, click throughs, and the conversion journey. The right technology can also enable you to test offers, measure ROI and customer lifetime value, and more. 7
8 Optimize Referral Messaging For Your Ideal Customer Does your ideal customer prefer a mobile or desktop environment? Do they like to receive communications through or text messaging? Do they like push notifications, or in- app messages? Optimize your messaging for your ideal customers devices and platforms. A good rule of thumb is to make your referral link as easy as possible to find and share. And don t force participants to share a referral link through only one channel; it should be consumable across all channels and social media platforms. That said, if you know your ideal customer favors Twitter, for example, you will want to devote extra effort to making your referral link Twitter friendly, and engaging customers and prospects through your brand s own Twitter account. It s not just where you communicate with customers, but also when you communicate that counts. The best time to ask for a referral is when your customer is at their happiest. This is often following a purchase (especially if they got a great deal), or a positive customer service interaction, after a customer has opted to subscribe or followed your brand on social media, or after they have left a glowing review for a product. Be on the lookout for these prime windows of opportunity to ask your customer to share, and you will likely see a higher rate of referrals. Pro Tip: After you have invested some time in a referral marketing program, you can ramp up your precision targeting my personalizing content and incentives to your most influential customers: those who have generated the most referrals, or most referral value, in the past. 8
9 Grow Loyalty With Referral Incentives and Rewards The Bond Brand 2015 Loyalty Report revealed that 34% of customers claim that they would not be loyal to a brand that does not have an incentive program. Even more astounding is the fact that the very act of sharing your referral offer deepens individuals understanding of and commitment to your brand. Research shows that people process information more deeply when they share it. This means that product referral programs not only help you acquire new customers, but also increase loyalty in your existing customers. The key to a successful, low- cost ecommerce referral marketing program that delivers consistent results, is to commit to continually rewarding customers who advocate for your brand. You can encourage referrals by adding value to the entire referral journey. You can deliver value to customers in multiple ways. The most powerful ecommerce referral marketing program will reward participants with a combination of social benefits and highly useful, tangible rewards. 9
10 Social Benefits for Referring Customers Referral rewards, incentives, and credits not only save people money and give them material benefits, they can also help strengthen relationships. That is, if you offer rewards that enrich the lives of both the referrer and the person referred. A strong product referral program will appeal to your customers motivation to connect with one another not just with your brand. A product referral program with built-in social incentive will offer rewards to both the person who made the referral, and the friend or family member who claimed it. When everyone benefits, people feel less slimy about recruiting friends in order to make a buck. With social credit, the referral does not come off as greedy, but as a generous opportunity provided by your brand. According to the New York Times Consumer Insight Group, we are motivated to share online by a desire to connect with likeminded people, express ourselves, reinforce a positive public image, and inform others about topics we care deeply about. A powerful product referral program taps into one or more of these reasons to share, creating an opportunity for people to connect with one another, express themselves, and directly drive results. Pro Tip: Research shows that the importance of referrals and recommendations increases the further along prospects are on the purchase funnel. 10
11 Useful and Relevant Rewards People respond to rewards that are truly valuable, and which they can actually use. Many people will only share information and offers that are specifically relevant and useful to the recipient. For example, you might offer your existing customers a discount on repeat orders if they invite their friends to sign- up, and give new customers half-off the product of their choice. Introducing the freedom to choose rewards means that people will customize the reward to their needs. Whether you decide to offer coupons, discounts, e- store credit, cash rewards, physical gifts, or giveaways, the rewards should be based on a deep understanding of your ideal customers. If your reward offer is mistargeted, it may actually have a negative impact on customers who want to feel that you know and care about them. It is also important to reward people quickly when they have fulfilled their end of the referral agreement. If you say a customer can receive a $10.00 bonus for a successful referral, be sure to deliver that $10.00 to their customer account the moment their referral makes a purchase. This proves that you are trustworthy and motivates the customer to continue sharing their referral link. Pro Tip: Research shows that consumers are not stimulated by the reward itself but by how it is presented. It may be tempting to frame your reward as something easily gained but rewards that are gained without effort tend to be viewed as less valuable than rewards that require effort. 11
12 Power Your Referral Marketing With The Right Technology If referral marketing is so amazing, why isn t every ecommerce business already taking advantage of the strategy? Because many companies do not have right technology and software to support and monitor a digital referral program. A robust and comprehensive referral tracking system is the backbone of any good referral marketing program. Without it, the demands of launching and managing ecommerce referrals can be too great, especially for small marketing teams. The right referral marketing solution will allow you to weave all types of referrals, whether , mobile, or word- of- mouth, into customer acquisition strategies with a powerful mix of software, promotion, and management tools. Your software should make it fast and easy for you to engage and convert customers, activate employees, and mobilize brand influencers to spread the word about your great offers to friends and family. You don t want to limit who can spread the word about your brand. Employees, customers, sales reps, bloggers and social influencers all make great referrers. You also need the creative assets and technological capabilities to promote in- store, on the web, in and across social media. When you want to sell in multiple languages, integrate the program with an in- store promotion, or add your referral program to a social media page, you ll need advanced yet easy to use referral software to do the job. Pro Tip: Make it easy to refer a friend. The referral process should be as simple and frictionless as possible so customers aren t discouraged from participating by too many steps or confusing instructions. 12
13 RewardStream s Spark Refer- a- Friend Software Is a Complete Solution Dominate social channels: Make referrals via your favorite social media channels or share links that anyone can repost. Measure and compare the results to see which social media platforms lead to the most conversions, and see exactly how many people your customers social referral messages actually reach. Leverage mobile: Deliver seamless consumer experiences across every device and screen size. Deliver a responsive digital experience, complete with dynamic CTAs to drive higher conversions on referrals. Promote consistent engagement: Regular, automated s throughout the referral journey, including thank you messages, program reminders, and reward notifications, will keep your referral program top of mind. Remind customers of the rewards awaiting them, and reveal new incentives over time. Meaningful Analytics: Easily access powerful analytics to track a wide range of key performance indicators, such as visitor stats, registered members, referral actions, referral impressions, referrals by channel, referral responses and conversions. End-to-End Support: A dedicated account manager who understands your program inside and out will answer your questions whenever they arise. We ll also address your referral program member questions and concerns so you don t have to! 13
14 See 15X The Conversions With Your New Referral Marketing Program RewardStream customers see an 80% conversion rate on referrers that s 15X more than , affiliate, site visits, or keyword searches. Digital word of mouth referrals are a strong driver of consumer behavior at all stages of the purchase lifecycle. ecommerce marketers can t afford to ignore consumers need for recommendations from trusted family and friends, as well as experts and influencers. As consumers go from awareness toward researching your product or service, the influence of advertisements drops and the importance of online sources of information increases. The bottom line is referral marketing is an opportunity too good for ecommerce marketers to pass up. The potential for acquiring new, highly valuable customers while also increasing existing customer loyalty is huge. Your customers are your most powerful marketers. Give them the invitation and incentive, and they will become dedicated brand advocates guiding you toward even more ideal customers. If you are ready to learn more about how an ecommerce referral marketing program can transform your online business, contact RewardStream s team of referral marketing experts today. We are happy to answer your questions, give you more information, and even provide a tailored web demonstration of our referral marketing software and services. 80 % CONVERSION RATE 14
15 Our team of referral marketing experts are here for you. Phone: Resources Nielsen. Under The Influence: Consumer Trust in Advertising. the- influence- consumer- trust- in- advertising.html Word of Mouth Marketing Association. Return on Word of Mouth Study. Demand Metric Benchmark Report. Referral Marketing: Identifying Current Strategies and Programs For Success. benchmark- report- november- 2014/ New York Times Consumer Insight Group. The Psychology of Sharing. Bond Brand Loyalty Loyalty Report RewardStream All Rights Reserved
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