Why Does Referral Marketing Work in 2019

Referral Marketing Is Designed For eCommerce Businesses

What else would be better than having someone personally recommend your business to people that they know? Recommendations are the top influencers to people that are deciding about purchasing, and when people recommend you and add in personal words to it then you sure would get more customers. But you have to give your customers a great experience in order for them to share their experience.

When you already see people recommending your business make sure that you start creating a formal referral program with the help of an amazing referral software. When you create an easy way for your satisfied customers to share with you, the more likely that they would do. And if you include a type of incentive then the more motivated they would be and the more reason for them to purchase again.

But why is referral program perfect for your eCommerce? Why should you be thinking about Referral tracking? Well, continue reading to know why referral marketing works.

  1. There are less objections to your pricing
    When you have a referral program, your pricing doesn’t become an issue. Well, it never really is out of the table but when your customers are mostly referred customers they aren’t that much worried about having to pay a little more compared to other shops because they are sure that the they could trust you and yes, trust plays a really big role here.
  2. It becomes easier to close a deal
    When you have a referral program, your closing ratio becomes higher. Most of the businesses would be experiencing a closing ratio of 10 to 30% but for those who have a referral program would experience close to 50 up to 70%.
  3. It becomes fun
    It turns doing business fun. What happens is that people who were referred are actually waiting to hear from you, they would also want to meet you and they even trust you from the very start so there’s no need to worry about winning their trust.
  4. You can scale up your referral
    You want to control and maintain your CPA while you are scaling up a media option that works in your favor. Unlike other ways of marketing strategies where in when you scale up the costs increases, with referral you can scale up without increasing your CPAs.
  5. It brings more game into your emails
    There’s a big chance that you already have an email drip or trigger set up for events and actions. A lot of businesses use this to promote their referral program as well. Since your customers already view your emails then this is a good way to increase more people in your referral program and get more people engaged. To make it more interesting you could try email receipts and confirmation emails because these are the type of emails that always get opened so your chance there is so much better. And when you aim to work on retaining your customers, post purchase emails could help you with that. Most of the time, after a customer makes a purchase they are excited, happy and that means it’s a great time to promote your referral and ask them to visit you again soon.
  6. Customers that were referred purchase more often and buys more
    Today, trust is very important because scammers are everywhere. Especially with online buying you have to trust your seller, so if you are a customer, who do you go to when you need to buy something online? Of course to someone you know, right? you ask from recommendations based on experiences of people you know. Here’s a fun fact, referred customers are more valuable than your already existing customers. Why? Because on an average they spend 25% more than them, they have a higher chance of referring other people, and they have higher chances of doing a repeat purchase.
  7. Implementation of referral programs are easy to do
    Great thanks to referral software OSI Affiliate, referral programs has become more efficient and easy to use and manage. A lot of people don’t have to get other people to do the coding for them and work on it from scratch so it becomes more cost efficient as well. Most eCommerce stores are already keeping track of their stores, and that is why referral marketing is really good for eCommerce. Why? Because you can easily implement referral marketing software into the existing processes without much changes.
  8. You can operate referral marketing on a sure CPA basis
    There’s only few platforms that can guarantee the amount of the CPA you’d be paying for every time there’s a sale while you could maintain the volume you have. There are tried and tested channels though like PPC but they have become expensive after years of service. Cost per click has increased rapidly because they have showed results that are positive. Today, you could already work toward a maximum CPA on AdWords but it would definitely decrease the volume of traffic you get. You would know your referral program is good when you can see an increase of new customers at a fair price.
  9. It makes coupons different
    Who doesn’t love coupons? They are one good way to motivate people to create an action. When it comes to referral programs incentives are the the way to go. There are different ways to give incentives and you have to consider what your customers would appreciate. There are coupons, discounts, gift cards and others more. When you combine the referrals with incentives that would bring your customer back to you, you are on the way to leverage in your business. It’s a good motivation strategy to give your customers a coupon after a successful referral, you gain a new customer and your existing customer makes another purchase.
  10. It would give you good reviews
    When a person has an experience with a a company they write a review. That’s why you also have to make sure your customer is always satisfied because they could do a good or a bad review. And that is why reviews are actually read by people before they do a transaction with a company. They want to know how bad is your bad review and how good is your good review in order to weigh if you’re worth giving a try.
    When a person is emotionally invested into your business they are more likely to post a review or send a feedback. And referral programs give a positive effect on your customers emotional response toward your brand.
    Referral programs are like a foundation for positive reviews. A lot of customers actually join in referral programs and if you ask them for a review, most of them are likely to comply. This is all because they are satisfied with your service and they are more than willing to help you out.
  11. It creates trust
    Referrals are worth trusting, everyone knows that. People would listen more to referrals from friends, as I mentioned earlier, trust is a very important factor when purchasing today. So if you have a referral program, your customers that were referred are good leads. And good leads trust the brands they were referred to because they know that people they know have already tried it and they wont refer them if it was a bed experience in the first place.
  12. Referral programs are Social Media Channel friendly
    There’s a lot of eCommerce sites that live by Social media, and referral marketing does too. Most of the referral programs have an easy way of sharing on social media it becomes easier for businesses to track and manage. Referral program also build social proof for businesses. When your target audience sees you being shared by people they would feel the urge to check what the fuss is about. This also adds to your credibility, and again, trust is very important.
  13. You can find influencers because of referral marketing
    You would know a person is a fan when they constantly send you referrals. And with referral software you can easily track who those top referrers are/ this one is important to check because this is a way to know who you could be best to be your advocate or influencer. When your customer is a top referrer, they have a huge following and their following easily listen to their opinions, that’s a good influencer. Make sure that you also always look for ways to reward those who are giving you more than others are, those who are putting more effort because you need them more than they need you.
  14. Customization becomes easier
    A lot of ecommerce sites are trying to set up their own referral program. But then they realized that it could be a bit difficult and there are other components that has to be put into thought. There are things that should definitely be flawless like the fraud detection, the codes, the tracking of rewards and a lot more.
    And a lot of eCommerce brands has actually given up on referral marketing because of getting overwhelmed as they tried to set up their own program. Some people spend days on trying to set it up but don’t really get it to run. Thankfully there are already referral software that makes things easier. You can simply embed the program into your site, and your good to go. There’s so little time and effort needed to get your referral program started when you have a software.
  15. Referrals is an inexpensive marketing strategy
    Everyone would want to brag about experiencing something good, that is just how we are. And that would get the word out about your brand, and that is one of the components of referral programs- word of mouth. With referral programs, there’s no need to search where your target market is. Why? Because your customers would do it for you in exchange for incentives. The better your incentives are the more motivated they get. And the people that they would refer are those who somehow have an interest in what you offer. When a referred person becomes a customer then they could join your program and it all becomes a loop, so you are now creating a community all thanks to your customers who said a word and shared about you.


Referral marketing has the most powerful word of mouth, it makes people trust the company without the business owner having to put in effort to win their trust, aside from that it’s cost effective, you give an incentive whenever it’s a successful referral, so what’s there to lose? All of these is why referral marketing is good for your eCommerce, if you aren’t convinced yet then go ahead and give it a try.

5 Response to "Why Does Referral Marketing Work in 2019"

  1. Comment From Alicia

    For me, next to word of mouth marketing, referral marketing is the best strategy to use for E-commerce businesses.

  2. Comment From Allyson

    Referral marketing is like an all in one, it get’s you customers, sales, and also builds your trustworthiness.

  3. Comment From Gabriel

    Trust is very important when it comes to any type of business, but it becomes more important for eCommerce shops, and having referrals make trusting more easier because the referrals would come from people the know.

  4. Comment From Andrea

    Referral marketing could be dragging after a long while, putting in coupons contests just make it all fun for you and your program members, tip: don’t forget to think of the customers and your business before your own preferences

  5. Comment From Arthur

    Referral marketing is like a gift from God. Just imagine how much it could help your business plus it’s almost risk free

Leave a Reply

Your email address will not be published. Required fields are marked *