What’s common between companies such as Morning Brew, Mac Cosmetics, JustFab, and Stitch Fix?
They each grew their customer base exponentially via the power of word-of-mouth marketing. The most cost-effective and profitable way to get new customers for an e-commerce business. With an extremely well-thought-out referral system, they each continue to enjoy a highly engaged audience that regularly brings in more business via word-of-mouth marketing.
So what is it that sets these companies (or many others like them) apart from the rest?
What are they doing differently and what can we learn from them?
And how can you go about replicating their success for your own e-commerce business?
Well, here are 5 key observations to get you started:
- Keep It Focussed
Everything on the internet wants attention. Which has only led to more apathy and indifference in customers. The only way to break through this is to make your referral programs as simple as possible to engage with.
Customers often tend to overlook aspects of a website that do not pique their interest or directly address their needs. So if your referral process is too complicated or requires your customer to read a whole list of terms and conditions to make complete sense of it – then you’re doing something wrong.
(if it’s not different – it’s not good enough)
Unfortunately though, most referral pages today end up looking the same. A nice product/promo picture on the left. And a referral form on the right. And then tucked somewhere in a corner a ‘How it works’ button that barely scratches the surface of why making a referral is a valuable use of your customer’s time and energy.
Let’s take a leaf out of what Mac Cosmetics did with their setup. A dedicated referral page that breaks down the process in clear, well-defined steps so your customer knows exactly what is expected of them. They even pair it with a dedicated FAQ section that helps establish what to expect in return as well. This not only works better than a lengthy T&C section but also keeps the customer focus on the information that pushes them towards making a referral.
(A customer is more likely to engage with a referral program they truly understand)
Takeaway: Make it as simple as possible for your customers to acknowledge, understand and engage with your sharing interface. Be cautious and conscious of keeping your messaging, process, and value offering centered around the customer’s perspective and convenience.
If you make them do a lot of navigating, reading, or manual work to make a referral that benefits you more in the long run, then they are likely to abandon the process midway.
- Make It Worthwhile
It’s a fact that the performance of any word-of-mouth program is only as good as the reward(s) it promises its users. So the consideration and selection process of the right one is critical to the success of any referral program.
The obvious answer here is “in-store” credit for most e-commerce businesses. But remember – the idea is to entice, excite and engage the customer in a way that benefits and makes them feel special. So a reward offer that’s essentially the same as nearly 50% of all referral programs is unfortunately not going to cut it.
And while discussing the right monetary value of the reward is arbitrary without a detailed discussion of any store’s economics – it’s important to remember that the non-pecuniary value you create for your customers is what truly attracts the highest number of referrals.
Take Morning Brew for example, a newsletter with nothing to offer on-site as a form of rebate to the customer but one that’s grown to more than a million subscribers purely from the merits of its referral program. The secret – a tiered rewards program that encourages more shares per customer and celebrates the topmost referrers with recognition amid peers.
This aspect of acknowledgment and celebration of the customer’s efforts contributed to the success of the program. Morning Brew not only enticed its customers with rewards that kept getting better but also made it exciting to engage within lieu of unlocking aspirational levels of recognition.
Takeaway: Design your program from the perspective of your customer. Monetary rewards are clearly beneficial – but your best customers want you to show them the same love, you want them to show you. So when they do – shower them with unique and exciting rewards that go beyond a cash exchange. Make them one of your own. Pamper them, celebrate them and show them that you care.
- Simplify The Sharing Process
Alright, so you’re happy with the details of your referral program and have carefully chosen the rewards you’re willing to offer your customers.
This should guarantee a successful word-of-mouth campaign right?
Wrong.
So far, you’ve only adjusted and improved the internal workings of your proposed program. How successful it’s going to be is largely dependent on how it’s delivered to the end customer vis-á-vis the user interface and experience while making a referral to your business.
Unknown to most e-commerce stores – a poorly designed referral interface is among the top reasons for people abandoning a referral process mid-way.
(Does your referral UI look like this?)
Expecting the customer to type out email addresses, one by one, to populate a list of invites is an extremely dull, outdated, and cumbersome formula to generate word-of-mouth. If they can simply pick their preferred contacts off a list when choosing to share via a social channel, then they should be able to do the same when choosing to do it via email.
Even your best customers could struggle to remember (or switch browser windows to find) the email ids of friends they want to refer your business to. It’s a gross depreciation of your customer’s time and the value it brings your business.
Consider a highly motivated customer wanting to make 20 referrals to you. Would they type down the list one after the other? Would you? Probably not.
JustFab does the exact opposite. It allows users to simply pick contacts off a chosen email address book to send a referral. All within the same control. All actions are contained within the same browser window or pop-up. The customer stays focussed on the task at hand with little to no manual effort required throughout the referral process.
Takeaway: Design a customer-centric interface that makes the complete process of making a referral extremely intuitive and non-cumbersome for the customer. Over-estimate the effort behind any amount of action you expect the customer to take in order to make a referral and then hack at it until it’s as straightforward and convenient as possible.
Most important of all – install a contact picker, so your customers never have type out an email address ever again. Each of the companies mentioned in this blog post – do.
- Personalisation Matters
We often spend a lot of effort segmenting customers into mailing lists based on their activity and engagement on the website. And while this helps in curating messages for people who have already been on our website or shopped with us – it leaves us just as clueless about the referrals we receive, as it leaves them about us.
Thus the secret to a successful referral program is confined within 3 sections of a typical referral email. Namely, the “From”, the “Subject”, and believe it or not, the “To” field of the email.
And I know what you’re already thinking – the exciting stuff is in the email body – so how can these be detrimental to the success of your word-of-mouth campaigns? Well, it’s because the personalization of these 3 fields can directly impact your email open rates and thus determines how many of your customers do get to the point in your email body where they need to be.
Always try to address the recipient directly in the “To” field to draw attention, and use the sender’s name either within the “Subject” or “From” field to add credibility to your emails. This will not only improve your open rates but directly impacts the conversion rate as well since most people trust recommendations coming from someone they know.
But personalization goes beyond gathering just contact information and weaves into the most critical part of the experience- the email body.
While a generic email introducing your brand/products could potentially do the trick – it can never be as compelling as one that directly speaks to the recipients’ interests.
There’s a lesson to be learned in how Stitch Fix incorporates personalization right within the referral process. Encouraging customers to share just a little bit more might seem like a negligible addition but could be detrimental to how your recipients interact and engage with the referral emails they get.
(take it a notch higher – incorporate personalization right at the referral stage)
What I love the most about Stitch Fix’s approach here is how it manages to avoid using input fields altogether. This not only includes their email addresses but other critical information such as First and Last names in addition to the referral’s gender to estimate recipient preferences and personalize the experience.
It’s all simplified down to mere clicks of a button with no additional effort or action required on behalf of the referring customer.
Takeaway: Don’t shove the burden of gathering information about your prospective referrals onto your referring customers. Use interface optimizations such as the Universal Contact Picker™ to extract and personalize transactional details of an email such as the “Subject”, “To” and “From” fields to drastically improve referral email open rates. Take it a step further via personalizing the email body with a note from the sender or a curated message based on pre-determined recipient preferences to improve your click-through and conversion rates.
- Data Helps Keep It Fresh
With everything else set up in the right fashion to attract and generate referrals – you’re left with the last piece of the puzzle to guarantee the (continued) success of your word-of-mouth marketing campaigns – The right metrics to identify, track, and measure.
Or in other words, data that helps you understand the capacity, capability, and willingness of your customers to refer your business to their friends, family, or colleagues.
The success factor for referral marketing, unlike digital, isn’t always about just engagement but rather derivative of the actions your customers are willing to take. It’s important to understand this distinction to differentiate your approach to metrics required between measuring a typical Ad campaign versus one that promotes word-of-mouth.
The right sharing metrics enable you to take better cognizance of your customer base’s motivation for advocacy and can help identify what step of the referral process are you losing referrals and make improvements to ensure a smooth, barrier-free sharing experience. Metrics such as how many users engaged with your sharing features and how many actually completed the process will give you a fair idea of where you’re losing potential referrals and help fine-tune aspects of your program to double down on what’s working and eliminating what isn’t.
Conclusion
Some essential training on thinking beyond just a referral page and some insight into how various pieces of the referral process come into play to determine or define the success of your word-of-mouth outreach. If you want to evaluate your current referral experience or interface – we highly recommend using this 3 step DIY workbook to get started. It was designed to help e-commerce stores audit the various aspects of their word-of-mouth outreach and it’s absolutely free to download and use.
Written by Nader Rehaan Mohammed from CloudSponge
Double your word-of-mouth sales using our suite of Better Sharing™ products that work seamlessly with all e-commerce platforms – including WooCommerce and Shopify!