Does Your eCommerce Site Need a Refer-a-Friend Program?

July 15, 2022
Michaela Barriga

Referral marketing allows you to tap into the power of your loyal customer base to drive sales. Learn how and why to add a refer-a-friend-program to your eCommerce site.

As an eCommerce business, you work hard to provide high-quality customer experiences and great products. Why not choose a marketing strategy where these customer experiences can work for you to make you more sales? Enter the refer-a-friend program!

a refer a friend program pop-up on an ecommerce site
An example of a refer-a-friend program pop-up on an eCommerce site.

Here’s the heart of a refer-a-friend program: your customers got a great customer experience when shopping with you. Now they have the opportunity to share how much they love your business with their family and friends and get a small reward from your business in return. Your business earns sales from both a new and a returning customer.

Refer-a-friend programs are extremely successful because they incentivize word-of-mouth referrals. One study found that 92% of consumers trust recommendations made by their friends and family more than advertising. Refer-a-friend programs help your business thrive using the power of your loyal customers. Let’s learn how!

How Refer-a-Friend Programs Work

Refer-a-friend programs incentivize your loyal customers to get their friends to buy your products. Here’s what happens:

  1. Customers invite their friends to shop your site.
  2. Their friends get a coupon code or discount to use during their visit.
  3. When the friend makes a purchase, the referrer gets a reward too!

While refer-a-friend programs vary, they typically provide a percentage or dollar discount for the referrer and their friend. Or, you can give the referrer and their friend something for free.

Like every marketing strategy, your goal here is to convert more customers. A refer-a-friend program helps you do this, and it typically takes fewer resources than many advertising efforts. After all, who doesn’t love discounts, incentives, and freebies?

5 Benefits of Referral Marketing

Let’s talk benefits! What awesome benefits can you expect to see from implementing a refer-a-friend program?

1) Tap into the Power of Word-of-Mouth Marketing

We’ve already touched on one of the biggest pros a refer-a-friend program has going for it: word-of-mouth marketing. People trust recommendations made by their friends and family. They can get the inside scoop and hear experiences firsthand, so they know what to expect when they buy from you.

2) Reach New Customers with a Can’t-Miss Incentive

When someone receives a recommendation from a friend or family member, they’re more likely to buy. When this recommendation is attached to a coupon or discount, they have even more reason to buy. By extending a special offer to referred friends like this, you can make it more likely that they’ll convert.

3) Drive Repeat Purchases from Existing Customers

Refer-a-friend programs come with an incentive for both the friend and your original customer. They both get a reward for making a purchase. This is great for you, because not only do you get a new customer, you get a returning sale as well.

4) Build Loyalty with New and Existing Customers

When you offer a discount and create this community of referrals, what you’re really doing is building a loyal community. Refer-a-friend programs create a loop by which customers will refer friends and return to make purchases themselves with their reward. With a great experience from the start, your customers will be happy to keep coming back, redeeming rewards, and inviting new friends.

5) Reach the Perfect Audience

One challenging piece of the marketing puzzle involves finding your ideal audience. Your perfect customer. Where are they? Targeted advertising can usually help you find them. But with word-of-mouth marketing, your customers do the legwork for you. They know who in their life will enjoy your products. You can reach people you couldn’t reach otherwise, without having to search for them yourself.

How to Promote Your Refer-a-Friend Program

By now, hopefully you have a good grasp of the incentive you want to offer and the benefits it will bring to your business. After you create your refer-a-friend program, where and how do you promote it?

examples of pop-up teasers for referral marketing programs
A few examples of pop-ups and teasers used to promote a refer-a-friend program.

Here are a few options – you can even use all three.

Add a small pop-up teaser to the bottom of your site.

Catch your customers while they’re shopping with a short, sweet pop-up teaser at the bottom of your site. Grab their eye with your offer, and explain the details when they click to learn more.

Show targeted pop-ups.

Target visitors, new and returning, with a pop-up offer.

refer a friend program pop-up
This simple pop-up makes the benefits of participating in your refer-a-friend program clear.

For instance, target people who have signed up for your emails but haven’t converted, or remind returning customers that they can earn rewards by referring their friends.

Promote it to your email list.

Send your new refer-a-friend program to your existing subscribers when you first launch. Going forward, promote it in your welcome emails when someone makes a purchase or subscribes. Promoting via email allows you to use the most relevant messaging for each segment, such as existing customers, recent buyers, and those on the fence.

Adding a Refer-a-Friend Program to Your Site

Ready to get started? Fortunately, implementing a refer-a-friend program can be as simple as installing a plugin or integrating software with your eCommerce platform.

Digioh’s new refer-a-friend extension for Magento allows customers to launch a refer-a-friend program, then promote it with custom pop-ups, teasers, and banners. Once you establish the rules of your program, you can use this extension to attract new referrals and run A/B tests to identify the most effective offer. Check out our video overview of Magento to learn more.

Using Shopify? We’ve got you covered with a refer-a-friend app too!

Refer-a-Friend and Beyond

Refer-a-friend programs are a win-win. They build loyalty with your customers and allow them to benefit from sharing with their friends and family. They bring you more sales both from new and repeat customers. Plus, they’re fun and engaging!

Here at Digioh, we make marketing on your eCommerce site simple and easy to customize for your unique business. Whether you’re implementing a refer-a-friend program or other marketing strategy, we’re here to help. We’d love to hear more about your goals as a business and discuss ways for you to achieve them. Contact us today!

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