Are you looking for ways to increase customer referrals?
Want to convince your audience to talk more about your store?
Referral marketing (also known as a word-of-mouth marketing) is one of the most powerful drivers of buying decisions. According to various data, it can influence anything from 20% to 50% of our purchases.
But did you know that by incorporating referral strategies into email marketing you can increase the chances of getting even more word-of-mouth?
And that’s exactly what I’m going to talk about in this post. I’ll show you 4 different ways to use email to increase customer referrals, get the audience to talk about your store, share your news, and convince their friends to buy from you.
Ready? Then let’s take it from the top.
Why Invest in Referral Marketing?
Apart from confirming our diminishing trust in online advertising, every year, the Nielsen’s Global Trust in Advertising Report highlights one other thing:
Trust in recommendations from friends, referrals, and reviews remains one of the strongest drivers behind our purchasing decisions.
What’s more, friend recommendations are one of the few factors in which our trust and actions align:
(image from the Nielsen’s report. Annotations by the author.)
As it turns out, we not only trust referrals but tend to act on them too.
Referrals also top the marketing channels across generations, making them the most effective marketing strategy today.
(image from the Nielsen’s report. Annotations by the author.)
But does referral marketing work?
According to the data by the Wharton School of Business:
- The lifetime value of a new referral customer is 16% higher than your average customer.
- The lifetime value of a referred customer is 25% higher than that of other customers.
Also, customers you acquire through referrals typically spend 200% more than your average customer. (source)
And the best part? Getting customers to talk about your store isn’t difficult at all. And you could use email to make that happen. Here’s how:
#1. Offer a Refer-a-Friend Promotion
The goal of referral marketing is to get someone to share your products or brand with their peers.
But relying on a person to take action and tell others about you on their accord might result in missing out on many possible referral opportunities.
Why? Because customers rarely think about it when browsing your site or reading your email.
Sure, if they purchased a product, they might tell others about it. But the idea to share rarely comes to them when they view your email.
To overcome this, include a refer-a-friend promotion in your message to stimulate sharing.
Here are some ways to do it:
Offer a shareable coupon or another referral incentive.
For example, Amuze allows their subscribers to send a $25 coupon to friends. In return, they receive the same amount off their next order too. This not only helps the company generate more referrals but also, increases return business.
(image via ReferralCandy)
Merge the referral promotion with competition. This way you use gamification and entertainment plus allow the referring person to benefit from doing so as well.
#2. Reward Subscribers for Social Sharing
I’m sure you already have some social sharing strategy in place.
Perhaps you include sharing buttons on your homepage or product pages. Add them to the purchase confirmation page, and include them at the bottom of their emails.
But do you know that you could stimulate social shares from email subscribers?
The opportunities to do so are many:
You could include a permanent sharing banner or call to action to attract subscribers’ attention to it.
InVision places social sharing buttons half-way through the newsletter with a catchy call to action:
Offer incentives (i.e. bonuses or coupons) for social sharing. DogVacay displays a banner with a $10 cash bonus for sharing information about their brand.
#3. Ask for Reviews
So far, we’ve talked about getting customers to tell their friends about your products and sharing them online.
But yet another way to get customer referrals is through reviews.
Although rarely considered a traditional word-of-mouth, reviews often work in a similar way, providing a proof of your products’ quality.
What’s more, they directly affect a person’s willingness to purchase an item.
For example, Bazaarvoice researched whether an increase in a number of reviews would correlate with the number of orders. And their conclusion? See for yourself:
Similarly, Reevo discovered that positive reviews typically result in 18% increase in sales (from the number of conversions to return rate).
Most stores use simple post-purchase questionnaires to solicit customer feedback.
However, this method allows you to get reviews only from people who have purchased products directly from you.
But what about anyone who got your products through a reseller or another source? And only then, signed up for your list as a result of using your products?
They might be a great source of reviews and testimonials…
…but only if you ask them for it!
This strategy ensures that every customer can review the company’s product.
TIP: To solicit more brand reviews, include links to specific sites you’d like customers to leave a review (i.e. Yelp or any other review portal). This will make it easy for your audience to act on the review request.
#4. Create Word-of-Mouth Coupons
Nothing beats coupons as ecommerce lead magnets.
Customers love them, and for obvious reasons, while issuing coupons doesn’t put a strain on any ecommerce owner either.
But coupons work equally well when you’re trying to get people talking about your store.
They allow you to entice someone to recommend your store to a friend, their entire family, office or any other group of people.
Hell, you could even use them to make people feel special by generating coupons a person could only receive from someone, not directly from you.
Wool Overs uses this strategy to offer a 10% OFF coupon for a friend in their emails.
Beckett Simonon offers a $25 cash reward for sharing. Note that they include a way to share directly in the email.
Referral marketing is one of the biggest drivers of buying decisions.
And by including referral strategies into your emails, you can increase the chances of getting the audience to talk about your store, recommend your products, and forward your newsletters to their friends.