By: Pulkit Bhardwaj, a writer for CandyBar and ReferralCandy.

Setting up an eCommerce store is simple. Choose a platform, make the payment, and you’re good to go. The hard part comes when it’s time to generate sales. To hit your sales goals you need to develop a dynamic marketing strategy.

One of the core components of almost any e-commerce sales strategy is referral marketing. We’ve compiled a list of examples that will inspire you to build a highly functional referral marketing game for your own store.

What is a referral program?

Put simply, referral marketing is the promotion of a product or service via word-of-mouth advertising. This marketing strategy benefits both the referrer and the referee by offering enticing rewards. Sellers can offer their referrers digital coins, convertible points, special gifts, vouchers, or discounts.

Affiliate marketing helps e-commerce sellers boost sales by promoting the seller’s blog or site for a commission. Both referral and affiliate marketing programs generate consistent sales for sellers across the industry.

How does a referral program work?

If you purchase a product or service, and are thrilled with that purchase, you’re usually pretty happy to recommend it to your friends and family. Referral programs take advantage of this mindset by offering people a little incentive to recommend products.

A strong referral program offers a reward to existing customers for bringing in new customers, and it’s a strategy that has been proven to be one of the most ROI-driven marketing channels available for ecommerce merchants.

To set up a great referral program, all an e-commerce seller needs to do is share an attractive reward scheme alongside normal products. Share the incentive on social media and, if you’ve got any kind of existing customer base, you’re almost guaranteed to see a spike in your sales.

We’ve handpicked a few smart referral marketing strategies to inspire you while you boost your conversion rate with a great referral program.

Example #1 FOSSIL (Cash rewards strategy)

Fossil is known for designing smart and stylish accessories. Their referral marketing approach is simple. They offer a direct cash reward of $10 for every customer referred. If you convince a friend to buy, you get $10 and so does your friend. It’s basic, but it works!

This type of referral scheme allows your most loyal customers to show their support for your brand and provides an opportunity for them to rave about you products. If you’re opting for a program like this, share it with both your existing customer base and new customers for maximum impact.

Example #2 Hanna Andersson: Discount pop-up

Hanna Andersson is a popular kid’s apparel brand that understands the power of discounts. The retail site hosts a highly optimized pop-up that appears every time a visitor clicks “Refer a friend”. Customers can send a 20% discount to a friend and, in exchange for the recommendation, receive a 20% discount themselves.

This particular brand leverages mobile audiences by offering social icons for Messenger and WhatsApp at the top of their sign-up forms. When opting for this type of program, bright, eye-catching photos on your forms are crucial.

Example #3 Maggie Louise collection: Points reward widget

Maggie Louise Confections is an online chocolate store with some ultra-creative referral tactics. Rather than offering a direct discount or cash reward, Maggie Louise offers referrers points and a $10 discount on your friend’s first purchase.

Take special note of the Z-pattern used on their landing page. This particular visual cue helps maximize conversion rates on the “refer” button by leading the viewer’s attention in a strategic path. If you click the button you’re directed to a quick referral widget instead of a page filled with text “selling” the program.

Maggie Louise Confections offers customers a variety of ways to earn points, including sharing the page on Facebook, following the brand on Facebook and Instagram, and by celebrating your own birthday. Participants can collect 1,000 points–translating into $10 off–for every friend they refer.

Discounts and cash are always great incentives, but you don’t need to choose one or the other. Flat Tummy mixes the two in a unique and highly effective program.

The brand offers referrers a $10 credit each time you refer a friend who makes a purchase. On the other side of the program, your friend will get 10% off their first order. The sign up form is presented immediately below the offer details to make participation in the program quick and easy.

A unique program can help e-commerce shops stand apart from their competitors who offer more traditional incentives.

Example #5 Home Depot: Signup box strategy

Home Depot is a DIYer’s paradise. This brand leverages their site’s already robust traffic to drive participation in their referral program.

The retailer simply added the signup for the initiative to the footer of their main site, keeping the design in line with that Z-pattern that works so well for conversions. They offer a $5 discount just for subscribing to their mailing list. This is an easy way to build your mailing list while inspiring sales at the same time.

Conclusion

When building your own referral program, keep in mind that a high quality offering and a seamless experience will go a long way toward inspiring participation. That means you must…

– Analyse your audience: Check out your Google analytics (or your preferred tool) and get familiar with your store‘s statistics. Know the specific audience your program will be targeting and learn what inspires them.

– Offer high value referral rewards: You can offer anything from cash rewards to customized gifts (mugs, t-shirts, etc.) for referring friends. Just make sure that whatever you offer is actually valuable for your customers. Avoid junk at all costs.

Once you’ve launched your referral program, promote it by sharing it on social media and updating your existing subscriber base to start generating leads. Remember that a referral program is a great way to not only acquire new customers but to build customer loyalty and retention within existing clients.