[5] Shopify Referral Marketing Tips You Wish You Knew

Last updated October 17, 2019
Shopify-Referral-Marketing

The eCommerce market keeps on growing, with each day bringing a new slate of offers competing for customer attention. One study predicts that eCommerce will grow to a $4.48 trillion industry by 2021. As a result, business owners are struggling to promote their stores and gain new customers amidst the sea of competitors.

Shopify is no exception. It is an eCommerce platform with a target price of between $350,000-400,000. Shopify hosts 820,000 merchants, which makes it an active and very competitive commercial battleground.

Shopify-Referral-Marketing

So, how can Shopify store owners promote their businesses in a way that brings them a healthy customer base?

According to MarketingSignals, more than 37% of eCommerce startups fail because they can’t deliver with online marketing. Almost the same number (35%) share the same fate because of a lack of online visibility. Beyond problems with poor online marketing, e-commerce startups seem drift towards failure because they lack a market for their products or services, have sub-par customer service, or are squeezed out by bigger players. In other words, there’s a big problem with marketing amongst new entrants in the industry. 

In an interview with AdWeek, Shopify CMO Jeff Weiser says that his company “exist[s] to make commerce better for everyone, and we think that unlike other businesses, there are really no externalities of that succeeding.” 

First of all, small business marketers need to up their game if they expect to compete even in  localized markets. As a result of combining digital media practices with Shopify apps, eCommerce companies, big, small, or local and niche apparel brands increase their chances of creating better online visibility that drives customers to their online store. But don’t be too frightened — marketing isn’t a fearsome dragon to be slain, and not every marketer has to be a knight in shining armor! However, leaving everything to chance leaves you riding your boat up a creek without a paddle. If you want to make your business successful, you have to put in work, and in the e-commerce world, that means promotion.


Marketing Channels for Promoting a Shopify Store

There are six generally-accepted main marketing channels for promoting Shopify stores. They are:

However, the first four aren’t used as often. It’s not that they’re less effective, but rather that they require a bigger investment in additional resources, such as money, tools, and new specialists. Referral marketing is a much more straightforward took to add to your marketing strategy.


Influencer Marketing 

Influencer marketing works especially great with referral marketing — the people who follow influencers often have friends and relatives with the same or similar tastes. When someone who is considered an expert or trustworthy authority publicly recommends a product or service, this product or service gets a public perception boost as a good thing to purchase. 

Research indicates that 94% of marketers who turn to influencer marketing find it an effective practice because it can generate up to 11 times the ROI of traditional advertising.

Influencer marketing attracts key leaders to spread a brand’s message to the intended target market. For this reason, customers associate the brand with personalities. 

Back in 1984, Nike signed a $2.5m collaboration deal with Michael Jordan to create the Air Jordans line of athletic shoes. In just the first year, Nike sold $70m worth of sneakers. 

Now, it’s even easier. The concept we now know as “influencer marketing” has exploded with the advent of blogs and social media, especially Instagram. This means that not only sports stars can be influencers, but also more ordinary people who are able to attract a large following on social media. 


Email Marketing

Emails carry a personal nature. That’s why they work well for generating customer referrals. Let’s suppose a friend sends you an email about a great new product available at a discount. You are more likely to try it in this event than merely after seeing an ad somewhere on Facebook. This is evidenced by the fact that that 75% of referred customers choose to be added to the referred brand’s email database.

A MailChimp study found that marketing emails have a 16.48% open rate and a 1.74% click-through rate, whereas Talkable customers’ open rate is 57.1%, and their average click-through rate is 36.4%. 

The Shopify platform offers many email marketing integrations which are pretty easy to install. Take note of the tools with basic automation. This feature will help you set up an email sequence with an autoresponder for customers and visitors once they come to your store. 

It’s worth noting that the average referred customer has a customer lifetime value of 16% – 25% higher than the average customer. Emails are a medium to talk to new customers through the mouth of your brand advocates.


Search Engine Optimization

This step can’t be neglected. Well-optimized pages drive enhanced traffic and sales to your website from search engines (Google, Yahoo, and Bing).

There are two primary important elements to start with: the title and meta description tags. These should include keywords related to your page content. Regarding character/symbol counts, the minimum for title tags is 60 characters, with the minimum for meta description being 160 characters. While that process requires a bit of imagination, it brings good search engine rankings. 

A quick tip: you can skip articles such as “the”, “an” and “a.” Style rules allow for this in headlines. 

Don’t forget to clear your pages of duplicate content. Generally speaking, duplicate content is content that matches with things on other web pages. Search engine machines flag it as plagiarism and push such pages way down in the search results. 

Don’t forget to link your Products Page from the Home Page. The Home Page is your most important page. Text navigation links are like signs on a highway which help your site visitors navigate. 

Beyond content, there is Technical SEO which requires a thorough analysis by your webmaster. This concerns checking your HTML and CSS, robots.txt files, sitemap.xml file, and proper use of Headline tags.


Social Media Marketing

Since so many people — 2,82 billions according to statista.com — are already on social media, you can easily reach hundreds of potential future customers. Social media is a communicative bridge between your store and your audience.

Traditionally, it’s recommended to create buzz around your brand anywhere possible. This is somewhat true. However, if you’re just starting out, put the bulk of your efforts into Instagram first, as its users are far more engaged, active, and responsive to brands than those on Facebook or Twitter. Moreover, Facebook has changed its algorithms in a way which prevents you from reaching your full audience without first paying for it.


PPC

Pay per click advertising is a great way to drive traffic to Shopify. Typically a blended approach works best, sending new traffic from Google Shopping and Search ads and retargeting with Facebook/Instagram DPA ads.


Why is referral marketing so powerful?

Companies with referral programs saw 86% more revenue growth over two years. It’s not a panacea, but referral marketing is a fantastic way to increase the reach of your brand.

Referral marketing is a word-of-mouth marketing strategy aimed at growing your business’s reach by providing your existing customer base with an incentive to invite their friends. Its effectiveness is firstly rooted in the fact that it is based upon trust between friends, family, and colleagues. Wouldn’t you be more likely to use the products or services trusted by the people you know? 

The second reason for referral marketing’s effectiveness is that it rewards your customers. It’s natural to want to be rewarded for what you do. Rewards, in turn, encourage customers to refer more people to your site. As a result, you get more than just traffic and site visits — you get people who very likely are already prepared to buy from you. If your product is good, they will pay for it. 

Referral marketing generates new customers and revenue at the same time. According to a study from Wharton Business School, your new referred customer base has a 16% higher lifetime value and better retention than other customers. The study also finds that 62% of businesses found referral marketing to be their most effective marketing channel for generating new customers.

When you ask Google what great referral marketing is, you get back articles starting with the word “ultimate”, “the only”, or “the best.” In other words: lots of tempting promises.  

Instead, it’s more effective to learn your average referral program metrics by heart. For campaign performance, the metrics you need to know the advocacy rate and share rate. For Friend Metrics, you have clicks per offer, visit rate, and conversion rate. The metrics for Talkable customers are:

  • An average advocacy rate of 8-10%.
  • An average share rate is 1.2 shares per advocate.
  • An average CTR for referral campaigns of 35-40%
  • An average visit percentage between 30-35%

Referral Marketing Program Promotion

Define Your Goals 

Although there are many well-run referral marketing campaigns out there, you can’t simply copy and paste them into your own marketing. It’s not a one-size-fits-all enterprise.

Focus on Your Key Message 

Your customer should understand the rules of the game in just a few words. If your referral program isn’t easy to use, you potential customers won’t give you a second look. 

referral-marketing-program-promotion

e.g. James Allen does a good job of concise, effective messaging. On their landing page, they give a clear call to action and lay out the variety of rewards the advocate can earn. Right below, they provide details about the program. 

Double-sided rewards 

Double-sided rewards offer incentives to both brand advocates and to their referred friends. Most businesses know about these rewards and actively use them because they lead to increased conversions. 

Naturally, happy customers are more likely to refer your product or service to their friends. 

List Possible Influencers

People trust not only their friends and family, but also people with reputations they trust, especially when their reputation is centered on a specific sphere. We call these people ‘influencers.’ The key element here is specific sphere. It won’t help your referral marketing to partner with just any influencer. There needs to be a connection between your product and influencer’s audience. 

e.g. If you sell toys for kids, your best influencer is a mom, dad, or child psychologist. A fitness model even with millions of subscribers won’t be the best candidate for promoting children’s products, except if they’re also known as a parent. 

Automated Emails 

This is a trick that raises number of sign-ups for your referral program. As Charles Duhigg, a researcher on the nature of behavioural triggers puts it; triggers follow a “signal-pattern-reward loop.” 

Ideally, you would want to set up a chain of triggered emails. It’s important to note that the sequence for friend referrals should be different from the sequence for advocates. 

e.g. Talkable’s Customer Success Managers recommend condensing your most important information into one or two sentences. There’s even a copywriting trick called the ‘inverted pyramid model’ which helps with this. It has you front-load your copy with the most essential information first, starting with the conclusion and ending with general information with supporting details in between. 

Blurb, a self-publishing service, crafted their email with this model. The reward (share $15, get 30% off) is the conclusion. The supporting details are in the visual — two ice cream cones — which indicates that both the advocate and their referred friend will get a reward. Below, they have general information, including the terms and conditions of the offer, and a motivating call to action. 

automated-emails


7 Do’s and Don’ts

  1. Do choose the right app. You should use a well-established, trusted referral app for Shopify with many merchants behind it. With a referral app, it will be easier for you to get your customers to spread the word about you, attract more new people, and track the effectiveness of your marketing efforts. There’s a free tool worth trying.
    Talkable Referrals, by Talkable, is a zero-configuration referral program with 9+ years of history in the industry. It’s a ready-to-use program with established campaign logic. The customizable design allows you to change the look of your program up to your liking.
  2. Do offer the right reward. It doesn’t take a lot to choose the right reward. The Talkable app on Shopify is integrated with Rybbon, a digital gift and reward provider, which broadens your customers’ range of options. A selection of over 50 US & international digital rewards is available, including VISA and Mastercard gift cards.
  3. Don’t forget to clarify the terms and conditions of receiving rewards. It would be a shame to miss out on this crucial detail. The more detailed information your page provides, the less time you will have to spend answering questions. You want to put forward all the information in a presentable, attractive manner. 
  4. Do use email marketing. An email is like a sales pitch. The only difference is that it not only allows you to pitch your customers, but also to build brand awareness and long-term relationships with potential and existing customers with personal communication. As Summer Lindman, CEO at Talkable puts it, “the things that make emails good ones are personalized subject lines, the body copy, good design, and clear call-to-action buttons. The crucial element, however, that makes emails stand out of the spam crowd is simply being useful to your customer! Help them, but don’t push them.”. 
  5. Don’t make your referral program hard to find. Placing a referral program at the bottom of your page with poor visibility doesn’t make sense. our site’s visitors aren’t going to pore over every pixel on your page. Instead, put your referral prompt in an attractive widget or pop-up. That way, your customers will read the brief (~140 character) text in your graphic and then be prompted to click the referral button, thus bringing more referrals to your store. 
  6. Do set up fraud-prevention measures. Your customers might love you so much that they’ll try anything to get a discount on your products.  That can mean dealing with people who try to refer themselves to your business by providing one of their other emails. It’s an attempt to cheat the system and it hurts your program. As Summer Lindman notes, Talkable provides end-to-end fraud prevention and a quality control engine where you and your dedicated customer success manager can define your rules to catch and prevent fraudulent behavior.”. 
  7. Do keep an eye on metrics. The effectiveness of any marketing campaign is measured by accurate metrics, including traffic, new customers, revenue, and so on. There’s a particular need with referral programs to define concrete metrics. What’s your goal? Boosting sign-ups? Growing sales revenue? Increasing the LTV of your referred customers? There are plenty of questions to ask, and you’ll need to answer them if you don’t want to be flying blind.

Best Shopify Referral Program

Shopify supports merchants all over the world. Big and small, they compete with each other for customers’ attention. One of the best ways to do this is with referral marketing is referral marketing, which is also one of the most trustworthy methods of attracting new customers, Simply because the new ones come at the recommendation of their friends. That goes quite far for your customers and will go quite far for you.

giles thomas

Author:

Hi, I’m Giles Thomas. Founder of AcquireConvert, the place where ecommerce entrepreneurs & businesses go to learn how to increase conversions & profits. I’m also the founder of ecommerce growth agency Whole Design Studios. I’m a head marketing mentor at the Google Launchpad Accelerator & Google Marketing Expert. Ps. Check out my new blog RisePro.co

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