Starting a business is no easy task, and maintaining one is no bed of roses either. It’s daunting to manage a business while still getting the word out there somehow. Fortunately, there is a solution to this, and that is referral marketing.

Referral marketing is the technique used by companies in order to build a presence, which then theoretically leads to more revenue through word-of-mouth referrals. You don’t need to fund a whole marketing team or department. Rather, your customers essentially do the marketing for you. So how is this done?

Customers are incentivized by businesses to recommend their product or service to friends and/or family members. Once this is successfully achieved, the customer gets rewarded for it through cash, store credit, or other perks. In some cases, the new customer that was given the referral is also rewarded for using the company’s services.

The more people who know about a brand, the higher the rate of return for that company, assuming it’s a brand that people know about for the right reasons. Because of this, referral marketing is becoming an increasingly popular strategy among ecommerce business owners, especially in the age of the social media boom where information is widely spread at dizzying rates. People trust their friends and family most of the time, too, so it only makes sense that businesses would try to utilize their already loyal, valued and satisfied fanbase to drive more sales through this seemingly benign method.

That being said, how can you make referral marketing work to your advantage? Here are some tips on how to implement referral marketing for your ecommerce brand the right way:


Using incentives gives people the motivation to want to help spread the w upord about your brand because they know that when they do they’ll get something in return for it. This usually comes in the form of cash, store credit, or free samples. MeUndies, for example, gives $20 of store credit to you every time a friend buys a pair of underwear. They also save 20% off their first purchase.

It’s important to keep in mind that whatever it is with which you’re using to incentivize that it’s not too big of a reward. This ensures that your customers genuinely value your business, and are not referring just for the sheer gains. Your customers will love you even more as a result of an incentive because they’ll be getting rewarded for something that they probably would have done in the first place without any perceived benefit.

Have an email referral program

Email is generally considered to be a reliable and direct form of communication, and it’s an approach used by many ecommerce businesses to build and sustain clientele.

When you acquire a new customer who creates an account on your site, it’s good practice to let that person know of your referral program after a few weeks time. That way, they can get used to you. Vitasave, a successful vitamin and supplement company, sends their subscribers an email after several weeks about their referral program. You don’t want to make the mistake of asking for referrals too soon before your customer has a chance to establish some sense of comfort first.

You can then, as an example, highlight a new perk once a month to your growing list of email subscribers if they refer somebody to make a purchase at your online retailer.

Exploit social media

Having regularly active and updated social media accounts, including heavy-hitters like Instagram and Facebook, are great sources for referral marketing because you can use them as landing pages for customers to engage with one another and feel a sense of community that centers around your company.

It’s also helpful with respect to referral marketing because there is an endless amount of potential as to how many people can find out about your brand because of the endless networking potential social media has to offer. Most people have it, it is easily identifiable, and these pages can be followed, liked and shared with others ad infinitum. You can also communicate with customers personally, which in turn builds trust.

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