Referral marketing for e-commerce
The rapid evolution of devices and free access to the Internet from any place are the main factors influencing the formation of marketing trends of the future.
In early 2015, mobile traffic bypassed the computer traffic. It led many companies to take a different look at brand promotion in the network. Today, online stores have not only a mobile version of their site but also offer applications for smartphones, so that users can quickly make purchases. 43% of brands actively conduct their communities in social networks, 59% keep in touch with customers through microblogging (Twitter) and Instagram. More than half of the companies (53%) pay for advertising in social media, and 25% use advertising in applications.
Every Internet user has faced the concept of a referral at least once.
A referral is a person who has been attracted to work or participate in a specific program. A person who recruits partners is called a referrer. This way of attracting people is relevant in various areas of activity: websites, work exchanges, copywriting, affiliate programs of online stores etc. More often, a person who wants to register and participate in the program passes on a "referral link" that leads to the accounting information about a person who invited the referral.
How to attract a referral?
You can attract referrals by:
- Friends and acquaintances;
- Placement of commercials;
- Social networks;
The way to attract new participants can be chosen by each person on their own. But we must take into account that, for obsessive advertising, spam and other manifestations, you can be simply banned.
Types of referrals
Referrals are divided into direct and indirect. A direct referral passes through such a link and connects to the system, and an indirect one is connected through it.
There are systems in which a person receives a certain benefit even from those referrals who are invited through the second and third parties but from his direct referral. This type of attracting people is popular and in demand.
This marketing strategy is popular among companies that deal with the Internet, sell goods and services to consumers. The goal: to expand the client base, encourage existing customers for a recommendation, reduce advertising costs.
This method of promotion is less expensive than traditional methods of television and radio advertising. Although it does not contradict them, it supplements. How to attract referrals, each company decides itself, developing its marketing program. The goals and budget are taken into account.
Earnings on referrals
Benefits of companies that create referral programs are understandable. The more people cited for it - the more customers. And what kind of benefits can a referee have?
Your income is limited by the terms of the marketing program. In some cases, the award is only for direct followers (one-level marketing). In others, any growth of the structure, including deepening, is encouraged. The payment will be for the fact that the client you mentioned works actively and recommends the company to your friends. Depending on the program, the incentive will be a fixed amount of money, a gift by the company's goods or services, a percentage of the earnings of the new client you quoted.
Such practice is widespread when the income from a direct referral is higher than from an indirect referral. And the further in structure it is, the less payment can be. The structure of clients looks like a pyramid.
Searching for referrals
Attraction can take place in two ways:
- Passive - any person can become a sponsor.
- Active - you need to perform certain actions: view content, subscribe, participate in the survey... Only after that, access is opened.
Let's consider referral marketing tools used in e-commerce.
Marketplaces and price-aggregators
Marketplaces are the websites that display products from many sellers. The most vivid examples are Amazon or Alibaba Group. In each country, as a rule, there are 2-3 large marketplaces. Connecting to an affiliate program of this site can bring a lot of sales to your online store.
Marketplaces provide various promotional tools: from the premium placement of goods to the e-mail distribution on the base of buyers.
Price aggregators are the services that allow you to compare product prices in online stores. As well as the marketplaces, they are very popular among buyers. If you get into the issuance of such a service - you will receive an additional source of customers.
Service coupons and discounts
Providing discounts is not always the best marketing strategy. However, the services of profitable purchases are popular, especially among couples and users with children. Often, the work of such services is automated. They offer daily discounts and promotions on a wide range of services, gradually turning a one-time visitor into a regular subscriber.
Affiliate Programs and CPA Networks
Online retailers often have affiliate programs that provide rewards for those who bring them clients. It is possible to negotiate a partnership with organizations as well as with individuals. The second option is via the CPA Networks (Cost Per Action).
Webmasters use all the variety of internet marketing tools - from SEO and PPC to social networking transmissions to attract traffic to your site. You pay only for a purchase that is made at your store.
Under affiliate marketing, we understand the partnership between an online store and opinion leaders who talk about products to their audience. It may be a known media personality, a blogger or just a popular person in a particular audience.
There are separate platforms where opinion leaders can take "offs" from various online stores and promote them in their accounts for a certain amount.
If you have not yet experienced one of the ways to drive traffic to your online store, do not be afraid to experiment. Referral-marketing shows good results not only in promoting e-commerce-projects.
Mariia Hepalova is a content writer on DesignContest.com. She has written for various online publications and blogs. With an equal passion for both design and marketing, she strives to produce content that is informative yet easy to understand.