A New Approach to Referral Marketing for Shopify Merchants

Having a referral marketing program is one thing, but optimizing it for your Shopify store is another.

Why do you need to optimize your referral program? To gain virality, and brand recognition of course! It is not enough to just launch a referral program on your website. You should also know how to promote it, across different channels, both pre-purchase and post-purchase.

More than basic ecommerce marketing, optimizing your program is one way to generate purchases from new users, and increase brand advocacy — with the right incentives in place, of course.

Today, I’ll show you some strategies that can help you do that. These are the strategies that worked for me and I hope it works for you as well.

Have an amazing offer

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The worth of a referral program starts and ends with your offer. The offer is your reward to all referrals who will not only sign up on your website, but participate through your post-purchase notification emails. If it is not attractive enough, people will just skip your program.  It must be at least worth their time.

So what type of offer do you consider ‘amazing’? Well, that depends on your target market.

Let’s get it very granular for a moment. Say that you’re a merchant running a store on Shopify that sells makeup. It may be in your interest to reward purchases, and not referrals. A merchant by the name of Althea did this, and the results were amazing.

What they did is that they implemented a limited-time freebie offer for every purchase. Instead of rewarding mere referrals, they decided to reward every purchase. The result? People bought items in hordes and the lip glosses ran out within two days. That’s how effective their campaign was.

Start with your existing customers

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Who are the best people to promote your store Shopify store? That would be your existing customers. Why’s that? Well, your customers have already bought from you. If they have bought from you again, they are likely satisfied with your services.

Although, this doesn’t automatically mean that they have the motivation to promote your brand. While they may like your services, they will not tell other people about their experience. You have to give them a reason to share their experience, and be an advocate for your brand.

One of the easiest ways to reach your existing customers is to nudge them throughout different touchpoints. People often think of newsletters, but this can be either pre-purchase using follow-ups, or even post-purchase using Shopify order confirmation emails. 

Consider this, transactional order emails average $0.75 per open compared to $0.13 for bulk mailings

Spently can allow you to plug-in referral marketing components directly within these emails along with unique discounts, product recommendations to incentivize a purchase, and even referrals.

Another way to reach out to your existing customers is through loyalty points. These are rewards that are tailored to your existing customers that have previously purchased from your store. You can adjust the rewards based on the amount that they have purchased or how much they have bought from you. From here, your customers have the abilities to accumulate loyalty points that can be generated from purchases, and even referrals.

These points can be used towards discounts towards purchases on your store, which is a great way to encourage repeat purchases.

Customize rewards based on your customer

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We now live in an era where data is prevalent. Technology allows us to gather information about customers, but this data doesn’t help unless you leverage it to your needs. It is all about examining customer motivations and purchasing behavior.

For example, if you have a customer that seems to keep buying from you, then a discount code will be quite valuable to them. Now the type of discount that you should give also depends on the product that you are selling. If your products cost more than $100, then a cash discount is good. However, if the product costs less than $100, a percentage discount will do.

It’s important to have the functionality in place to make these sort of customer specific customizations. Spently can allow you to set specific rules to accommodate users on any side of the spectrum using unique discount codes.

Now if you sell items on a one-time basis or your customer tends to buy occasionally, and on longer intervals from your store, a cash reward may be the best. This way, they will still be encouraged to refer people to your site even if they don’t plan to buy from you in the near future.

Here are some examples.

The first example is PayPal. Since PayPal is a service that you sign up to on a one-time basis, they chose to give out cash for every sign up. What makes PayPal’s referral program stand out from the rest is the amount of cash that they have given away. The amount is so great that the website earned viral status instantly. It’s important to that is not for everyone, the founders of PayPal are playing the infinite game, and willing to lose that money initially for long term gains in brand recognition.

The second example is Uber, known to give out free rides for referrals. Then, they also give out exclusive discount codes to those who fulfill a certain number of rides, which is a great combination of having a relevant incentive as well as providing rewards based on customer behavior.

The key is to get to know your customer and provide rewards that are based on their needs.

Position your referral program to reach scale

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There is one type of reward that is designed for marketing, influencer reward. This is a form of compensation that you give exclusively to the influencer so that he or she refers more people into your referral program, or shine a light on your products. In this case, the influencer acts as a main referrer.

Typically how it works is, you’ll do is create a discount code with the influencer’s brand or name on it. Then, contact the influencer that you have an exclusive discount code that is just for their followers.

It’s important to note these propositioned affiliate partnerships to generate are a hit or miss, and shouldn’t be the only approach utilized.

How can we increase its efficacy? The best way to implement this is to have a group of influencers promoting you at the same time. Why’s that? Well, you don’t want to depend on just one influencer. You want more and more people talking about your brand. And if they get to do it at the same time, then that’s better. That will instantly boost your credibility and get you on your potential customers’ radar.

What am I suggesting? If you don’t stop there, and utilize post-purchase referral plugins with exclusive discount codes associated with specific customers. 

Your existing customers will be moonlighting as your affiliates.

If your Shopify store is using Spently, it can allow you to include share functionality within emails paired with the ability to track conversions based on unique referral codes that are assigned to specific customers. These marketing components can be placed within any of your Shopify notification emails.  

Influencer rewards have tons of benefits. First, it can get your name out there. Once your brand is mentioned by an influencer or a group of influencers ie. your existing customers in this scenario, you’ll gain instant credibility. With this, it will only be a matter of time until you 10x your sales.

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