George Silverman, a psychologist, pioneered word-of-mouth marketing when he created what he called "teleconferenced peer influence groups" in order to engage physicians in dialogue about new pharmaceutical products. Silverman noticed an interesting phenomenon while conducting focus groups with physicians in the early 1970s. "One or two physicians who were having good experiences with a drug would sway an entire group of skeptics. They would even sway a dissatisfied group of ex-prescribers who had had negative experiences!” (Wikipedia)
Word of mouth is the best form of marketing. So let’s use this form of marketing to assist in growing your Shopify through referrals.
What is referral marketing?
Referral marketing is simply incentivizing your current customers to encourage friends and family to purchase your product. This word of mouth marketing is highly effective due to the trust of friends and family.
Nielsen found that consumers were 77% more likely to buy a product if their friends recommended it. 23% of consumers talk about their favorite products with friends and family every day. (buyapowa.com)
Referral marketing will be one of the best ways to decrease your customer acquisition costs, and increase new customer acquisition.
What to offer?
When determining your offer you need to consider both what you are willing to give to your existing customers and what you are willing to give to your potential customers. I typically will recommend keeping the offer fair on both sides. For example, “Give a friend 20% OFF their first order and receive 20% off your next!”
Humans are more altruistic than we think. Test wording your referral call to action as 'give $10 to a friend' rather than 'get $10 by inviting a friend.” Often, you may not even need an incentive for the giver. People like to be generous.
What apps?
Given there are countless apps on the Shopify app store that can assist you with referral marketing, let’s spend some time diving a bit deeper into what apps I would recommend based on your needs. Most of these apps have additional features as well, so here is a breakdown of what I recommend:
Smile is a great app if you are looking to keep it simple. They have a great free option that allows you to set up a referral program quickly and easily. You can set up your referral program based either on points for existing customers or discounts. Smile integrates perfectly into your store and has a great UI that doesn’t require you to notify customers via email or SMS about your new referral program, it is designed to integrate directly into your store with an icon in the bottom right corner.
Looking for a bit more customization and functionality? Automizely is a great choice. With options to customize your referral program and the design, Automizely will let you set up referrals based on percentage off, fixed amount, free shipping, free product and more. Additionally, with built in features made for influencer marketing, affiliate programs and limited time offers, Automizely may help you with more than just your referral marketing programs.
Lastly, Loyalty Lion is a great option if you’re looking to set up tiered programs. Refer more, earn more. Loyalty Lion is a great option if you’re truly looking to customize your customers’ experience. With best in class integrations, Loyalty Lion will be sure to work with whatever email or SMS programs you are using on Shopify.
Referral marketing is a super way to bring new customers to your Shopify store for the lowest acquisition cost. Use some of the referral marketing tips provided above and watch your customer base really increase!
Now go and grow.
J
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