How Referral Marketing Will Increase Your eCommerce Sales?

Updated on November 7, 2022 in Ecommerce by

How Referral Marketing Will Increase Your eCommerce Sales?

Referring seems to be a pretty good deed. Especially more when all the parties involved get benefited with bare minimum efforts. In the following article, we are learning about how you can use Referral Marketing Strategy for your eCommerce and How Referral Marketing will Increase Your eCommerce Sales.

There are enough articles on the internet stating various facts and tips for referral marketing strategies. But in order to stand out and have a successful campaign of your own, you need to understand the basics first.

The five core topics we will be discussing in the following article are

– What is Referral Marketing?

– Benefits of Referral Marketing

– How to start eCommerce Referral Marketing?

– Best eCommerce referral marketing strategies (with example)

Hence without making you wait anymore, let us start with this amazing article on board.

What is a Referral Marketing?

Referral marketing refers to a marketing strategy to make use of recommendations & word-of-mouth from exciting customers in order to attract more potential customers to your store.

Or, in simple words, it is a method of making people refer your eCommerce store to their friends and family in return for incentives.

It is a great tool that integrates your online store with your existing customers, through which you get better at converting customers, which helps you grow your eCommerce sale consistently. 

With time, many eCommerce has come up with their own referral marketing strategy and have seen success.

On the other hand, many brands are still finding out the best solution for their eCommerce. Now if you are looking for the reason why they are obsessed with this form of marketing, then let us show you the benefits of it.

Benefits of Referral Marketing

Increases marketing reach

referral marketing strategy

If you are using an eCommerce referral marketing not only are you engaging your existing customer, but you are actually working with them. Moreover, if there might have been a limit to referral in the real world, online media has eliminated that limit too.

One can just share your referral link and get you more customers compared to your own marketing campaigns. In addition, you shall also agree that a recommendation is way more influencing than an advertising.

Better customer retention rate

referral marketing for eCommerce

People who have been a part of your referral marketing strategy have a higher chance of staying with your eCommerce for a longer period of time. Moreover, you may also know that engaging a new customer in order to get a sale is way harder, as well as costly when compared to an older customer.

This becomes more efficient with this strategy as the efforts of acquiring customers are minimized yet customer retention rate increases.

Increases brand awareness and reputation

Direct reach out has always been a great influence on the customer when it comes to brand awareness. Moreover when this tool of reaching out, merge with your referral marketing strategy, you can expect a boost in your brand awareness and boost in your reputation.

Improves customer brand loyalty

referral marketing

Loyalty plays a crucial role in making an eCommerce successful. People working alongside your referral marketing strategy tend to stay loyal to your brand for the same reason. In addition, due to the close influence of the people connecting to your brand have higher probability to stay with your brand.


referral marketing strategy

You don’t have to constantly be on your toes for integrating referral marketing for your eCommerce. Once setting up your campaign, you can sit back and enjoy the automation.

At the beginning there are some crucial steps that you may take care-off very seriously, but further you can rely on referral marketing tools for eCommerce.

How to start eCommerce referral marketing

Decide your Incentives

The very first step here would be to decide the incentive for the customer being part of your referral program. What additional benefits would they be getting in return of them referring your eCommerce site/products.

Here are some of the most common incentives that we can see in this context.


Cash is the most liquid form of incentives that you can share with your customer. But at the sametime, it hasn’t played well from the perspective of business. Due to the flexibility of cash, it doesn’t incentivize a customer to build loyalty.

Rather than cash, you can provide your store gift cards that they can use to buy more products from your store.

Gift cards and Discounts

Gift cards and discounts are another great medium to attract customers. This is among the incentives that makes your existing customers push their limits and share your eCommerce to a maximum number of audiences.

Reward Points

Reward points are the most flexible format in referral marketing strategy for your eCommerce. Firstly they can only be used with your store. In addition they can be used to redeem gift cards, discounts and experience from your store.

Moreover, these reward points also act as a medium to keep your audience engaged and refer to more people. This is a timeless method to go forward with as you can introduce and control your referral marketing from time to time.

Set Up an eCommerce referral system for your eCommerce

Once you are done deciding your incentives, it’s time to set up your eCommerce referral system for your eCommerce. Keep in mind that your referral system must be seamless and easy for your existing customers to be part with.

If it’s complex, less number of people would sign-up to refer your eCommerce. Moreover there are enough tools for you to make the setup easy.

Promote your referral eCommerce

People need to know about the offering that you are providing to them. Hence a small boost would require people to know about your referral program and how they can get benefited from the programm.

One of the best places to share the news about a referral program would be at the post-purchase page. At the following page, people have shown trust by purchasing a product on your site. Moreover people are also eager to share the news of their product.

Hence a smart integration of social sharing buttons could turn out to be a great success. Also, don’t forget to remind the customer about the incentives that they shall receive from referring to your site.

Best eCommerce referral marketing strategies (with example) 

There are only a few ways that your customer can get benefited from your eCommerce. But it’s the way of integrating your eCommerce strategy that can make your campaign successful.

Here are a few of the best eCommerce referral marketing strategies, from the prime examples that you can learn from and enhance your eCommerce marketing campaigns.


referral marketing strategy

When it comes to referral marketing Dropbox needs to be on the top of every list. Dropbox offered its customer a free space for referring to their friends and the reaction of the customer blew up.

The campaign brought them a 60% increase in the sign-up. Moreover, they acquired 4 million new users within just 15 months. And well how much did it cost? Whopping $0.

With the following technique, they eliminated the factor of losing anything from the customer’s mind. Moreover, the incentive was also motivated to use dropbox and share it with friends, which turned out to get immense popularity.


referral marketing for eCommerce

Airbnb referral marketing strategy didn’t turn to overnight success. Rather it was a long and evolving strategy that brought about a 300% increase in referral bookings. They planned a referral system where one would get travel credits every time their referral would take a trip and rent an Airbnb.

Moreover, they eased out the process of referring by introducing an API that would sort out the contacts based on the internet behaviour to determine which contacts are most likely to need the service from Airbnb.

The ease of participating and a much influential incentive made Airbnb a successful pioneer of referral marketing.


referral marketing strategy

Uber in itself provides a service that is solving the problems of the millions. They introduced a referral program where one could invite friends to use Uber and get the first ride free.

Well, this might sound good enough, Uber took a step further by letting the drivers share referrals and get cash bonuses.

This campaign was so successful that soon other cab services started using the same. The main key takeaway here would be to integrate not only your customer but also your business in order to lift is consecutive.

Wrapping up

And with this, we rest this amazing article here. But in saying that, Referral Marketing for your eCommerce sale is a major part of your eCommerce. So we will be sharing some more articles very soon. If you are interested in knowing more about how to grow your eCommerce sales using the right marketing practices, then sign-up for PixelPhant email newsletters from below.

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