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Creating Your Store's Referral Program

referral program

Referral marketing - it’s the most effective form of marketing when it comes to getting new customers. What is it? Put simply, it’s just people making purchases based on someone else’s opinion and influence. In fact, Nielsen reports that people are 4 times more likely to buy when referred by a friend.

So, why is referral marketing so effective? 

It’s effective because it’s highly targeted, consumers trust each other. And it accelerates, creating a network effect to expand your store’s reach.

It’s highly targeted - Friends have shared interests (it’s why they’re friends), they share style, and they have common demographics. So the new customers you want to target are your current customers’ friends, because they are likely to love what you have to offer too. According to the Journal of Marketing, referred customers are more likely than non-referred customers to spend more and turn into loyal customers themselves.

Consumers trust each other - Consumers trust recommendations from friends and family more than any other form of advertising. A Neilsen survey reported 92% of respondents said they trusted referrals from people they knew.

Reach and acceleration - Now with social media, the average consumers' reach is much larger than ever before and for many people with strong social followings, their reach can be gigantic.

If you do it right, your referral program will accelerate on its own, creating a network effect and expanding your reach. When your referred consumers became happy customers they themselves are likely to refer their friends, and so on.

Creating your store’s referral program 

To encourage your customers to refer their friends, you can offer them an incentive. The American Marketing Association found that offering a reward increases referral likelihood.

Using Collect Loyalty you can create a winning referral program. Simply, adjust the referral settings and choose how many points you want to reward the customer once their friend has made their first purchase. It’s that easy. Collect Loyalty takes care of the rest, with ‘Refer a friend’ links on all customer emails, coupons and the customer portal. So you don’t have to worry about promoting your referral program. It’s all done for you, and it’s completely trackable so you can measure your results.



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