eCommerce referral programs are powerful strategies for growing your online business. They are essential in attracting new customers, ensuring brand loyalty, building brand credibility and social proofing, and boosting revenue.
But what’s an e-commerce referral program, and how can your online business benefit from it? Are there metrics you should know signaling your company’s readiness to launch such a program? And how should you initiate a customer referral program for your online business?
Relax. We will shed light on these queries and provide nine examples to get your revenue-boosting program off to a solid start. Read on.
What is an E-commerce Referral Program?
An eCommerce referral program is a cost-effective and results-proven strategy for growing brand awareness. It can ensure brand loyalty and boost the bottom line of online businesses.
It leverages the interpersonal relationships of loyal customers. A well-planned e-commerce referral program encourages customers to share positive things about your online business with friends, colleagues, acquaintances, and social contacts.
In return, eCommerce businesses reward or incentivize customers for referring new clients to the brand. It’s nearly identical to affiliate programs. The difference is that referrers are existing customers while affiliates are third-party entities.
Benefits of an E-commerce Referral Program for Your Business
A well-planned and carefully implemented eCommerce referral marketing program can benefit online businesses in several ways.
First, acquiring new customers and growing your customer base is easier. Eighty-three percent of consumers trust recommendations from friends, family members, and close social contacts. So, if your customers recommend your online business, there’s a good chance many referees will become new clients.
Even if these referred individuals don’t become your customers, they will become aware of your brand. Building brand awareness should be a cinch. It can also guarantee your online business’s social proofing.
Brand awareness empowers you to reach more clients. People might not buy your offerings today, but they have you in their minds. That counts. Who knows? They might try your services or products soon.
Another benefit of an eCommerce referral marketing program is customer loyalty.
Happy and satisfied customers will never look elsewhere for their needs. You’re their go-to online brand. They trust you and expect to deliver high-quality products and impeccable customer support. The customer experiences they get from your brand are more than enough to keep them in your fold.
Did you know that businesses that boost their customer retention rates by at least 5% observe a 25% to 95% profit uptick? That’s impressive! Hence, if your online business makes $100 per customer, retaining the same customer will net you a $125 to $195 profit.
Why? The cost of retaining current customers (making them happy and feel valued) is five times lower than customer acquisition costs. That translates to a more significant budget for other online business pursuits.
The bottom line is that successful eCommerce referrals can grow your revenue by expanding the customer base. These strategies strengthen brand loyalty and increase customer retention.
When Should Start an E-commerce Referral Program?
Referral programs differ from affiliate campaigns. They have stricter requirements for initiation. While you can launch an affiliate marketing program as soon as your online business becomes operational, a referral campaign demands several signals.
For example, your baseline transaction volume should be sufficient. Experts say successful referral campaigns require at least a thousand paying customers monthly. Businesses with less than a thousand paying clients can still launch a referral system if the average monthly revenue exceeds $500,000.
Another sign you’re ready to start an e-commerce referral program is when you have a substantial base of loyal and happy customers. After all, this brand awareness- and revenue-boosting strategy requires loyal clients doing word-of-mouth marketing. You might want to aim for at least 1,000 supportive customers.
An email campaign is an excellent complement to conventional word-of-mouth referrals. Over four billion people receive emails daily. Forty-six to fifty 50 percent of email recipients open their messages, although only about three in 100 will click on embedded links.
You can launch an ecommerce referral program if at least 22% of your loyal clients open their emails with a click-through rate of 2.9% (the number of email recipients clicking links and CTAs in the email body).
Your presence on social media platforms must also be solid. Experts recommend at least 20,000 highly engaged social media followers from different platforms. That includes Facebook, Instagram, YouTube, Pinterest, TikTok, X, LinkedIn, and other social media networks. The more followers your business has, the higher your chances of succeeding in referrals.
Without these metrics, starting an e-commerce referral program might be ill-advised.
How to Launch an E-commerce Referral Program
Trust us. Launching eCommerce referral programs is easy. You need a business plan and observe the following tricks. It should get your program off to an excellent start.
Select attractive rewards.
People are more likely to act on a request if they get something in return. You can call it reciprocity. That’s the key to any successful program.
Hence, an e-commerce referral system will be more effective if you offer incentives or rewards to customers. But it shouldn’t be just any other referral reward. It must be enticing.
Although most online businesses offer a discount reward, you could think outside the box. For example, giving an exclusive item to VIP advocates guarantees robust referrals.
How about giving referrers a free three-month subscription or an exclusive access pass to an upcoming industry event? Buy-1-take-1 and dollar credit schemes also work. Accumulating points customers can exchange for gifts and other rewards can stimulate advocates to increase referrals.
Use double-sided rewards.
A more effective referral program reward involves incentivizing referrers and their referees. At least nine in ten programs use this trick, with 72% offering promoters and their referred friends identical rewards or incentives.
For example, an online company can offer a 10% discount to customers who successfully refer a friend. Their referred contacts also receive the same discount. Or, the price cut could be slightly lower or higher. The point is both parties get a reward.
A double-sided rewards program values the close relationship between promoters or referrers and their social contacts. People love to share, especially with friends. They believe their social contacts must also have what they have.
Choose the right referral program software.
Launching a program is easy. However, preparing for it and managing its different components can be challenging. You will need automated marketing tools to simplify processes and ensure more accurate and consistent results.
Your online business can benefit from an easy-to-use, customizable referral program software. These technologies make program preparation, launch, monitoring, and management more convenient. You could sit behind your desk doing other tasks, and the software runs everything about your program.
We recommend UpPromote, a powerful tool for many online companies seeking a successful referral system. It’s effortless to use and delivers accurate reports in real time. Making timely and correct decisions should be a cinch. UpPromote also allows customization to give your online brand a distinct image.
Promote your referral program via multiple channels.
Like any marketing program, referral systems are more successful when promoted on every marketing channel.
For example, you could promote your program on your website. Create a dedicated landing page for it and add thoughtfully designed referral widgets. Unfortunately, some customers only return to your website when they have something to buy.
Communicate with these customers via email. Keep them posted on latest brand developments. More importantly, send them a referral email with description of your rewards and a link to your referral page.
Please don’t forget social media. Two in three American consumers buy products recommended by friends on social media. Even if social media users don’t buy your brand, they will become aware of it.
Keep it simple and easy to share.
An online company’s referral system should be straightforward to join and refer friends. Customers would want a program with as few steps as possible.
For example, clicking a refer-a-friend button should be effortless. The action opens up the referral landing page. Referrers fill up as little yet all-important information as possible. And they’re done.
Generating a referral link should be easy, too. Customers don’t need technical knowledge to code. A simple copy-and-paste is enough.
Please don’t make referring a friend seem like a chore to your customers. It will scare them and ruin your chances of ensuring a successful program.
Offer various sharing options.
Promoting your program across multiple marketing channels works. If you have many options, so should your customers or promoters. Give them plenty of referral options.
For example, you could encourage them to post referral codes on social media (i.e., Facebook, TikTok, Instagram, X, and LinkedIn). They can also embed the links on messaging apps like WhatsApp, Telegram, and Viber. Emails and SMS are always welcome.
The more sharing options your promoters have, the more chances the online business will acquire new customers.
Ask for a referral at the right time.
A successful referral marketing campaign requires making referral requests from your valued customers. Asking for it demands impeccable timing.
Nobody would want to receive a request when you’re gloomy or in a bad mood. Hence, online brands must check for signs the customer is more receptive to referral requests.
One such opportunity is when a customer returns to renew a subscription or buys another product. This behavior shows the customer is happy with your offerings. You can jump on the chance and ask for a referral.
Another example is when a customer writes and shares positive experiences about your brand with friends on blogs and social media. It shows genuine appreciation for your company. You can thank them for the nice words and politely ask for a referral.
Show your gratitude.
Although incentives and rewards are enough for most customers, some value a heartfelt thank-you note more. It’s one of the best-kept secrets of successful loyalty programs.
Writing a thank-you note by hand shows you care enough for your customers. You go out of your way to write your thoughts and thank them from the heart. Mailing can take time. However, the message is clear. You value your customers for referring their friends.
If you’re not a fan of snail mail, you can deliver a heartfelt thank-you message via email. Check your VIP advocate’s email address and create a heartwarming note. Thank them. It won’t cost you a dime.
Track the metrics of your referral program.
How do you know your online company has successful referrals? You monitor various metrics, of course.
For example, the referral rate will tell you how happy and satisfied your customers are with your brand. They are so happy they refer as many friends as possible.
Another metric worth tracking is the conversion rate. It shows how many referred friends become paying customers.
You could also monitor customer lifetime values (CLVs), churn rates, costs per acquisition, customer retention rates, click rates, and invitation conversion rates.
9 Best E-commerce Referral Programs in 2024
We talked about an e-commerce referral program and its benefits. We also know the requirements for initiation and how to launch and manage a successful program. In this section, we will learn how these things apply in real life with the following ecommerce referral programs.
Casper
Casper entered the e-commerce scene in April 2014. The online brand delivered the much-beloved bed-in-a-box design with a remarkable 100-day trial period. Although Casper started as an online business, it has over 200 physical stores across the US and Canada.
The online mattress brand features a referrer-friendly referral widget across its website pages. Although small, the white text-on-blue background “Refer a friend” link at the web page’s upper left corner is easy to spot. Smacked in the middle is the benefit – $75 for each qualified referral.
Unlike other refer-a-friend programs, Casper allows non-purchasers to join its advocate program. You can register as a Casper Friend even without buying a mattress.
Referrers or advocates receive a $75 Amazon gift card for every qualified referral. Meanwhile, referred friends enjoy a 25% price drop from their initial purchase. That’s a good deal, considering how pricey mattresses are.
Unfortunately, Casper caps its rewards value at $599 annually. Moreover, the brand advocate program is only available to US and Canadian users.
Still, Casper remains a worthy case for aspiring online brands to design a referral system.
- URL: Casper Mattress Referral Program
- Reward/Incentive: $75 gift card for referrer, 25% discount for referee
- Type: Double-sided
Outdoor Voices
Here’s another online brand that highly values customer loyalty. Outdoor Voices is an online platform for health & fitness enthusiasts. Instead of encouraging its customers to focus on fitness performance, OV motivates them to have fun outdoors.
Outdoor Voices’ referral system is integral to its rewards & incentives program. The brand encourages Doers to score points by referring friends or attending events. Customers can write reviews and earn points they can redeem for product discounts.
For example, creating an OV account scores the customer 20 points. The first two purchases are worth 30 points while succeeding purchases give customers a point for every dollar spent. Following OV on social media is worth 10 points while writing a review is worth 25. Add a photo to the review, and you’ll score an extra five points.
Customers with 250 points get a $10 discount, while 400 points equal $15 price off. Referred friends also receive a 20% discount.
Joining its Bronze program is free. Unfortunately, that limits the rewards you will get. On the other hand, Gold and Silver members enjoy more and better perks.
- URL: Outdoor Voices Rewards Program
- Reward/Incentive: Redeemable points for referrer, 20% discount for referee
- Type: Double-sided
Omsom
The Vietnamese are famous for rich and flavorful dishes featuring the freshest herbs, spices, and local ingredients. Creating an authentic Viet dish at home can be challenging.
Omsom to the rescue! This online Vietnamese brand delivers saucy noodle samplers, vegetarian options, and other products that capture authentic Asian flavors.
Like many referral marketing campaigns, Omsom wants to spread the word about its offerings. They envision a world that appreciates Vietnamese cuisine and bold Asian flavors.
Omsom’s double-sided reward isn’t as attractive as other programs. However, it compensates by making referrals straightforward.
Landing on the Omsom page activates a colorful referral popup. The website is as rambunctious as the term “om som” implies. Its bright red and screaming orange design complements the equally stunning yellow.
It also has a rewards section, allowing customers to earn a point per dollar spent. Accumulate a hundred points, and you’ll enjoy a $5 discount on your next purchase. If it’s your birthday, Omsom gives you 50 points. Creating an account is worth 100, while following the brand on TikTok or Instagram nets you ten points.
- URL: Omsom Share the Omsom Love Referral Program
- Reward/Incentive: $10 discount for referrer and referee
- Type: Double-sided
Allbirds
Studies show that 39 in 50 consumers value sustainable products. Moreover, 11 in 20 consumers will buy eco-friendly goods. Surprisingly, three-quarters of sustainable products sold in e-commerce platforms sell better than in-store options.
That makes Allbirds an excellent online brand.
Unlike some ecommerce stores, Allbirds’ commitment to sustainability and eco-friendliness isn’t merely lip service. It’s at its core. And this philosophy resonates well with like-minded people.
Allbirds is an online store specializing in surprisingly comfortable and stylish eco-friendly footwear. The brand uses wool, sugar cane, and tree fiber to create stunning, bouncy, comfortable shoes.
However, it needs all the help from its Green Earth-minded customers to spread the word.
Allbirds’ Refer-a-Friend program is easy to join. Opening the page reveals a simple popup with a “Give $15 Off, Get $15 Off” messaging in bold print. It couldn’t be simpler and clearer than this.
Referrers only need to fill a few boxes, and they can share Allbirds’ admirable dedication to sustainability and loving Mother Earth.
- URL: Allbirds Refer-a-Friend Program
- Reward/Incentive: $15 discount for referrer and referee
- Type: Double-sided
Love With Food
Have you tried a 6-ingredient vegan tzatziki? How about mung bean crunchsters or Hollywood film-inspired snacks? If you’re a fan of unique yet delicious treats, Love With Food has several offerings.
This ecommerce brand is a food delivery service offering high-quality, nutritious, and fun snacks. It doesn’t have a dedicated website, but its Facebook Business page has a substantial following. Over 335,000 Facebook users follow Love With Food.
LWF’s social media presence compensates for its lack of a website. It’s understandable. Websites are costlier to maintain and manage than social media business pages.
Referring a potential customer to LWF gives the referrer a chance to earn 1,000 points and a snack box for free. If the referred friend buys an LWF box, they only pay 50% of the price.
The good news is you don’t have to be an LWF customer to refer a friend and enjoy the rewards. Sign up for an account and invite friends. You can share LWF on Facebook and other social media sites.
- URL: Love With Food Referral Program on Invitation
- Reward/Incentive: 50% discount for referee, 1000 points + free snack box for referrer
- Type: Double-sided
MOO
Richard Moss established MOO in 2006. It creates thoughtfully designed business cards for the modern professional. With nearly 334 million businesses globally, MOO’s target market is huge.
But that doesn’t prevent MOO from securing its customers’ assistance in growing MOO’s clientele. That’s where its referral platform comes in.
Surprisingly, MOO’s referral system is unlike most successful referral programs. Advocates and promoters have two options. They can refer family, friends, and colleagues. Alternatively, they can promote MOO to larger organizations.
The latter option offers large businesses the chance to standardize their business cards. More importantly, the referrer gets a more handsome reward. You can receive $150 for each qualified Business Package referral. The referred organization also gets bulk discounts, a company template, and advanced account management.
If customers prefer promoting to individuals, MOO’s refer-a-friend scheme is perfect. Referrers receive a #20 gift cards for each qualified referral. Meanwhile, referred friends only pay 75% of the business card’s price.
MOO’s refer-a-friend program couldn’t get more attractive than it is.
- URL: MOO Refer a Friend or Business Program
- Reward/Incentive: 25% discount for referees, $20 gift card for referrers
- Type: Double-sided
Gilt
The fashion industry is huge. It’s worth $1.7 trillion globally. Unsurprisingly, many online brands find success in this niche. One of them is Gilt.
This e-commerce fashion store carries some of the most recognizable brands in the industry. Customers can buy Prada, Gucci, Armani Exchange, Balenciaga, Dior, Chanel, Burberry, Giuseppe Zanotii, Saint Laurent, Valentino, and Versace. The list runs in the hundreds.
It has clothing, footwear, jewelry, handbags, fashion accessories, and beauty products to equip modern individuals with their preferred style. Gilt even has fashion goods for kids.
Unfortunately, Gilt’s program isn’t as straightforward as other ecommerce referrals.
According to Gilt’s Terms of Membership, customers can earn Referral Credits from the brand or any of its invitation channels. Unfortunately, it doesn’t describe how many points the referrer will earn.
On the other hand, Invitation Codes say Gilt offers a $25 reward for every qualified referral. The value applies to the referrer and the referred friend.
- URL: Gilt Referral Program on Invitation
- Reward/Incentive: Discounts or referral credits
- Type: Double-sided
Hydro Flask
Exploring the great outdoors can be fun. It can also be tiring. Hydration is vital to keep your bodily systems in tip-top shape.
Hydro Flask guarantees adequate hydration wherever your adventures take you. Its offerings feature premium-quality materials in a design that traps heat (or cold) within the vessel’s double-insulated walls.
It’s no wonder that Hydro Flask is a huge hit among outdoor enthusiasts.
Deciphering the referral system of this ecommerce business is quite challenging. It doesn’t offer store credits, discounts, or cash rewards. Instead, Hydro Flask plays to the customer’s sense of adventure by giving mystery gift items per qualified referral.
Referring a friend is as easy as registering your name and email. A landing page opens, allowing referrers to copy a link they can share on social media. They can also post the link on email and messaging apps.
Unfortunately, you must buy a Hydro Flask product to become a referrer. This observation can be a deal-breaker for aspiring Hydro Flask advocates.
Still, Hydro Flask’s brand awareness-boosting strategy is worth considering.
- URL: Hydro Flask Refer-a-Friend Program
- Reward/Incentive: Mystery gift items for referrer and referee
- Type: Double-sided
Lokai
Lokai brings up the rear of our list of e-commerce referral platforms. This online brand specializes in bracelets and rings with “balancing” effects. Some products communicate a purpose (i.e., mental health, breast cancer, and veterans’ awareness).
Like other ecommerce referral marketing programs, Lokai institutes a double-sided reward system. That’s great news for customers who want their friends to enjoy identical rewards. They can wear the same bracelet or ring and enjoy their lives as friends.
Lokai’s reward used to be store credits. Today, it’s a handsome 20% discount. This reward should give customers more savings, allowing them to exploit Lokai’s regular discounts and specials.
Lokai’s program is ingenious. A referral promotional popup opens when a customer buys a product. This tactic thanks the client for the purchase and reminds them of a rewarding opportunity. Customers will have more reasons to become Lokai’s advocates.
The referral widget floats on every page. This strategy allows customers to become an advocate regardless of their web navigation behaviors.
Online brands might want to integrate these tricks into their programs.
- URL: Lokai Referral Program
- Reward/Incentive: 20% discount for referrer and referee
- Type: Double-sided
Conclusion
eCommerce referral programs aren’t different from other referral platforms. It’s only more specific to online companies. This strategy has more stringent startup requirements because it’s exclusive to the digital world. E-commerce brands must have a significant online presence to make the program work.
Launching such a strategy requires observing proven tactics to ensure success. We shared nine foolproof techniques to get the program off to an excellent start. Learn them by heart and watch your online business gain more new customers. These tactics can also help drive your bottom line through the roof.
