How is Referral Marketing Beneficial For (E-commerce App Success)?

/ January 24, 2018 | 5 Mins Read

How is Referral Marketing Beneficial For (E-commerce App Success)?

Whether it’s a newly released movie, recently opened restaurant or a new product launched in the market, we prefer what our near and dear ones suggest. Likewise, we share our stories and experiences, expecting them to try the products and brands we choose. Imagine the same thing in case of your e-commerce app. Your existing customers will act as your brand ambassadors - referring your app to others for using it regularly. Sounds great, doesn’t it?

Since our buying decisions are often based on other’s opinions, referral marketing tactics are becoming the first preference of every brand for marketing. E-commerce companies are using in-app referral methods to increase their brand awareness and attract new customers, whilst satisfying the needs of existing user base.

If you are still wondering how referral marketing can aid your e-commerce app success to bridge the gap between you and your target audience, Check it below.

1. Significant pointers to consider E-commerce app success:

a. It enhances your app’s image

When customers recommend your app to others, your app gets socially proven. The referred users get confidence in your app and are likely to get converted into potential users. Moreover, referral mechanism when accompanied by push notifications, social marketing and ASO, can make your mobile app viral.

b. It brings more traffic to your app

Usually, brands find it difficult to maintain a balance between acquiring new users and maintaining a relationship with the existing ones. In-app referral programs help in this by offering existing users with the facility to refer the app and get incentives. This way, both the new and existing app users feel the urge to use the app and enjoy the benefit.

Besides this, an ‘app only’ discount directs the users to use your e-commerce app over the website and other means to approach you. As a result, more traffic reaches your app.

c. It boosts customer loyalty

Through these referral methods, you make the existing customers feel valued and prompt them to stick to your app. More importantly, when customers realize that both their friend and they are rewarded, they get emotionally attached to your app.

d. It helps to find your influencers

While referral method helps to increase your active users, it also helps in finding perfect influencers, i.e, those who send referrals regularly, or have a high social media presence and can catalyst your marketing.

e. It helps in gaining good reviews

By referral system, you can encourage your active users to write reviews or rate your app. Since ratings and reviews have an impact on your app ranking in the app store, you can achieve higher ranking by gaining good customer reviews. At the same time, you can get the attention of those customers who check reviews before trying any app.

f. It demands low acquisition cost

Since the app users willingly sign up the referral method and are ready to stay as loyal customers as well as bring more users, you need not spend a hefty amount into the process.

2. How are different E-commerce companies using the Referral marketing mechanism?

Various companies in the E-commerce, as well as other industries, are leveraging the benefits of Referral marketing for promoting their app and enjoy higher ROI. For example:

  • Amazon app provides a bonus of $5 to its users when they install app for the first time. He can send his referral link to his friends and receives another $5 referral bonus when they install the application on their devices. Users can credit these referral bonuses while making a purchase on Amazon, provided the referred friends have already made their first purchase through the app.
  • Slang, a platform where users can connect with the sellers of streetwear and authentic sneakers, offer $10 to both the person inviting his friend to try the app as well to the friend accepting it.

Referral marketing mechanism

3. How to make a perfect in-app referral marketing strategy?

In-app referral marketing is indeed the best tactic to gain the attention of new customers through existing users. It cuts down your efforts to attract users and provide more space to focus on providing a better experience when utilized properly.

To ensure that your in-app referral program supports customer engagement strategy and helps in your app's success, cover the following pointers while making your strategy:

a. Target the right audience

To run an effective campaign, filter out the user group that would enjoy services you will offer in your referral program. Target those people as they are more likely to convince their friends of being a part of this.

b. Provide some value to users

When building in-app referral marketing scheme, make it certain that your users get something worthy to share. Otherwise, your efforts won’t bring the benefits you desire.

c. Choose the suitable reward

If you want users to refer your app to others, provide them some bonuses they would love to have. For example, you can provide those discounts or gift cards on referral, offer premium memberships, deliver bilateral benefits, or avail personalized referral codes.

d. Find your influencers

Look for users having higher social media presence as they can be an asset for your business. When they promote your app, more people will get attracted.

influencers marketing

e. Target them at right time

To get the best out of your referral marketing strategy, show the referral message at the highest time of user engagement. This will increase the chances of a positive response.

f. Add gamification

By adding gaming elements to your in-app referral program, you can keep the customers hooked to the screen and prompt them to try it at least once.

g. Re-engage your users

Your ultimate goal is to stimulate customers for using your referral program again and again. For this, send them an appreciation message or email once they refer your app once. In addition to this, lure them to use your in-app referral program again.

h. Allow social sharing

Customers love sharing on social media platforms. By empowering them to share the referral code on their social contact or directly to the contacts, you can leverage better benefits.

i. Promote your referral system wisely

To elevate the chances of users sending referrals to their friends, promote your program well. Send push notifications to them, or create a landing page on your website from which the users can be directed to your app. Besides this, you can also employ email marketing for the same.

Adding referral program to your E-commerce app can be the best thing to carve your path to E-commerce app success. However, make sure you cover the above-mentioned points. Earn some good reputation in the market and most importantly, test your referral scheme before presenting to the users.

This post was submitted by a TNS experts. Check out our Contributor page for details about how you can share your ideas on digital marketing, SEO, social media, growth hacking and content marketing with our audience.

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