Referred customers are 18% more loyal, have a 16% higher lifetime value rate, and spend 13% more than their non-referred counterparts.
When it comes to referrals, the statistics say it all:
Referral programs center on word-of-mouth marketing that encourages customers to advocate on behalf of your brand by, among other things, letting someone else know about your brand via a gift coupon or discount code. The referrer may also receive a reward for helping spread positive sentiment about the brand.
As a HubSpot blog points out, you should begin a referral program strategy by asking yourself several questions: “What do you hope to get out of this referral program? Are your goals tied more to growth and revenue? Do you want to add retention to that mix? Are you in an industry that requires an exceptional amount of trust-building?”
Let’s share an example. Ned, a full-spectrum hemp oil brand, employs a subscription model that allows customers to easily replenish oils and remedies before they run out, with an emphasis on user experience and personalization.
They offer a Spread the Ned! a referral program that lets customers give friends $15 and earn $15 on their next purchase. Referring users only need to fill out their name and email and they will receive a shareable link to pass along to a friend.
Read: Conjured Referrals vs. Rivo.
Once you establish your referral program, your job isn’t done. You should be examining your program regularly to see what you're doing well and where you could improve. Experiment with sending customers feedback surveys to see what your fans think about your program and be sure to apply that feedback moving forward. The more effective your referral program is, the more leads it will generate for your marketing and sales teams. In this competitive e-commerce landscape, any advantage to stand out from the pack is always appreciated.