Ultimate Guide to Marketing a Store — Chapter 3 — Referral Marketing

Robert M Kilonzo
Aug 25, 2017 · 4 min read

In this chapter, you`ll discover

  • How to Make a Referral Program Work for You
  • How to Reward People in Your Referral Program
  • How to Set up a Referral Program
  • Top Ways to Promote Your Referral Program

How to Make a Referral Program Work for You

Having a referral program has many benefits. Not only is it the fastest way to get more people into your sales funnel. But it is also a great way to promote your brand and let your business spread through word-of-mouth.

A referral program gives your business a tool to help your customers refer your business to other people. With it, you give your customers another reason to talk about your business aside from just good service. You give them an incentive that can come in the form of cash, a single-use coupon, a multi-use coupon or other forms of benefit.

Why does a Referral Program Work?

A referral program works because of

Referral marketing works because of two reasons:

It Works Because its Goal is Not Sales

People know a salesperson from a thousand miles away. They know if you are in it for the money or you are willing to lose money to get exposure. And if they see that you don’t care about the sales. That’s when your customer eyes light up. Suddenly, they are paying attention. Suddenly, they want to know what you have to offer.

This is how referral marketing works. You give them an incentive that they cannot refuse. For Uber, it is a free ride. For PayPal, it is plain cash. For eCommerce websites, it can be a discount coupon. And then you give this incentive to them without asking them to spend money. This makes the offer very attractive.

It Works Because It is Based on Trust

Real marketing is based on trust. People buy not only because they think that you have an amazing product or service. They buy because they trust you.

This is the same concept that works in referral marketing. When you have a referral program, you ask people to refer their family and friends to sign up in exchange for a reward.

This works because the person promoting the program is a person that they trust. It is a friend or family member. It is not just anyone. This trust factor encourages them to sign up and their engagement is far better than ice cold leads.

Now that the importance of a referral program is emphasized, let’s dive into the setup process.

Most marketers dismiss the idea of having a referral program in their website or business because the process can be quite complicated. Not only are you required to configure plugins, widgets or tools for it to work. But you also need to know how to promote it to really see its benefits. For a business owner who already have too much to do, this can get overwhelming.

Today, you’ll learn the step-by-step process on how to set up a referral program for your website or business.

How to Reward People in Your Referral Program

Referral rewards can take on different forms. You have to decide on two factors: what type of reward to give away and who to give it to.

Let me break down these decision points for you.

First, you have to decide on the type of reward to give away.

You see, rewards can come in different forms. It can come in the form of cash, single-use coupons or licenses, multi-use coupons or licenses and other forms of product or service. The key is to choose a reward that suits the product or service that you are giving away.

Choosing will require you to examine different facets of your product or service.

First, you should know if the product is designed for one-time purchase or multiple and continuous purchases.

For one-time purchases such as a car, cash may be the best incentive. It would be irritating to receive a 50% discount coupon for your next purchase if you buy a car. It is like giving away something that your customers will not be able to use.

Note: This article was originally published on the OSI Affiliate Blog. To see the whole article you can go here http://www.osiaffiliate.com/ecommerce-marketing-guide/referral-marketing.html.

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Robert M Kilonzo

Written by

osi affiliate software, ecommerce marketing podcast, running with the horses

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