Generate customers through refer-a-friend marketing: top tips for small business ecommerce

REFERRAL Marketing

Essentially refer a friend or referral marketing is using word of mouth to promote your product or service to generate new business.  It is about encouraging your existing clients to tell their friends and family about your business with the hope that their influence will create new customers.

The key to successful recommendations is to offer great customer experience and to actively persuade your current customers to spread the word about your products and services.

What are the benefits to small businesses?

Referral marketing  offers a number of benefits to small online business owners. Key to its power is the fact that the majority of people trust the opinion of friends, family and even other customers over most of the other forms of marketing that we generate.

74% of consumers identify word-of-mouth as a key influence in their purchasing decision”

Low cost: With word of mouth marketing, even if you are offering some sort of ‘refer a friend’ scheme, acquisition costs are usually low if not negligible.

Effective: Recommendations from friends are one of the most effective ways to influence the purchasing decision and generate new customers.

Trustworthy: People are far more likely to listen to the opinion of, and trust, people they know.

Targeted: Referral marketing is usually highly targeted. Most people recommending a particular product or service to a friend is doing so because they feel that their friend will be genuinely interested in what it is that they are recommending .

Healthy profit margin: Referred customers are great customers!

  • Referred customers bring 25% higher profit margin
  • Lifetime value is 16% higher for referred customers

How to increase referrals and recommendations

positive customer experience

So we’ve established that getting referral marketing up and running makes sense for your business. So where is a good starting point? Firstly, ensure that you have implemented all the things that will positively influence customers’ experience of your business. Only then look at active ways you can encourage your customers to refer and recommend.

Focus on getting the basics right first

It may sound obvious, but there is no point actively asking your customers to recommend you to their friends if your product, service or all-round customer experience is poor. Nobody is going to refer a friend or post a glowing review if they’ve had a less than positive encounter with a business. So focus first on getting the fundamentals right. For example:

  • Offer exemplary, personalised customer service.
  • Interact and engage with customers.  For example reply to comments posted by customers on social media or your blog posts.
  • Strengthen brand trust and build you business’ authority and credibility. For example create a resources page with industry relevant information, articles and blog posts, speak at relevant conferences and industry events, implement security logos and Trustmarks on your website.

Actively encourage your customers to recommend you

83% of satisfied customers are willing to recommend  products and services but only 29% do.

If you’re confident that your business is all that it should be, then look at how you can actively encourage customers to recommend you to their friends and colleagues. I say actively encourage because even if your customers absolutely love you, the chances are they will still need a bit of nudging in the right direction.

Sometimes, you just need to ask. If you find yourself coming off a particularly positive phone call with a customer then ask if they’d mind providing a review of your product or service. Try posting a request on social media for feedback. It is also a good idea to get bit more proactive with referrals. For example think about setting up a Refer a Friend programme and actively generating customer testimonials.

1.Run a Refer a Friend scheme

A refer a friend scheme is a great way to bring referrals in. Asking customers to provide you with the contact details of a friend who may be interested in your product is a great way to build up your referrals. Keep in mind you may need to incentivise your customers to boost response. In the Boden example below, if a current customer recommends a friend successfully then they receive a £10 Boden voucher and the friend receives 20% off her first order – appealing both to the customer and the friend they refer.


refers friend incentive


Offering some type of reward or incentive will improve your recommendation rate but it doesn’t necessarily follow that a monetary reward is the most effective. Research indicates that offering a reward increases referral likelihood, but the size of the reward does not matter  and that non-cash incentives are 24% more effective at boosting performance than cash incentives. Ultimately it will depend on your audience and it might  be worth you testing a few alternatives to see what pulls in the best results.

2. Implement customer reviews

Recommendations from friends come at the top of the list for people’s most trusted source of product information. But interestingly online opinions and reviews from other consumers rank pretty highly too.

Start collecting reviews and testimonials from customers to have visible on your website. Ask customers who have recently purchased a product or service for their feedback. You can also sign up to product review platforms  such as Trustpilot or Feefo who will help automate the process for you.

Customer testimonials

Make referrals easy

To help get a response to your requests for feedback, ensure you make it as easy as possible for your customers to refer their friends or leave a review. The more rings customers have to jump through to make a recommendation the lower your response rate. Here is a great example from Hello Fresh’s Refer a Friend scheme. A simple link takes current customers to a registration page where they can quickly and easily enter their friends email addresses – Hello Fresh does the rest.


make referrals easy

Referral marketing is a great way for small businesses to generate  new customers. The three key points to take away are:

  1. Make sure you get the basics right first such as excellent customer service.
  2. Actively ask your customers for referrals
  3. Make it is as easy as possible for them to refer their friends.

We’d love to hear your thoughts and experiences on Refer a Friend so please do leave a comment. 

Is Your E-Commerce Business Hitting It Right with Its Loyalty Program?

E-Commerce Business Hitting It Right with Its Loyalty Program

How often have you thought of devising a loyalty program for your e-commerce website that fits it just perfectly? After all, there is absolutely no use of having one that isn’t effective.

Several e-commerce retailers create loyalty programs that fail to deliver the desired results, either because they did not appeal to the users or the program itself was difficult to maintain.

On the other hand, there are several e-commerce websites that have benefitted a great deal from the right loyalty programs.

According to Forrester Research Paper, “If you’re set on building brand loyalty, a loyalty program like offering points for purchases in your online store may help in increasing your sales. After all, one loyalty program member spends up to 13% more than two non-members.”

This titbit of information indicates that when crafted properly, an e-commerce loyalty program can serve as a powerful tool that increases conversions. This implies better revenue from existing clients, getting new customers interested in your offerings, reducing customer defection, and lowering shopping cart abandonment.

A strong loyalty program may turn out to be just what your e-commerce website needs.

If you’re planning on starting an e-commerce business or already have one, you need to ensure that you incorporate a kickass loyalty program into your marketing program. Being smart and strategic about it will go a long way in helping you reap its benefits.

Mentioned ahead are a few features to take into consideration to make your loyalty program a roaring success:

1. Keep Things Simple

While it is completely understandable that you want your loyalty program to be a success, you need to think practically. Instead of creating a complex program, you would be better off keeping things simple. That way, the program as well as its goings-on will be more under your control.

Remember, loyalty programs should never be complicated. It is important that the reward system is completely understood by your users. If the points, rewards, levels and achievements leave them perplexed, rest assured that they will lose interest and things will get out of hand for you.

The idea is to create a loyalty program that is easy to get hold of and create an enjoyable shopping experience for the buyer. It does not take more than a few seconds for buyers to decide on whether or not they want to want to join it. It is, therefore, important to provide them with the simplicity they’re looking for and make the program as easy-to-understand as possible.

2. Make It Easy for Users

Make It Easy for Users

As mentioned in the above point, you need to make it as easy as possible for your buyers to join the program. This means removing the barriers between them and the program. Typically, the best way to do so is by allowing users to sign up with their e-mail address.

Apart from their e-mail address, they should also be able to sign up with their social media accounts, especially those customers who are already buying, sharing and interacting on social networks. This is preferred to creating a new login ID just to buy from your website.

3. Simplify the Participation Process

So you’ve got your users to sign up to your loyalty program and wondering about the next step? Let us give you a hint: the rewards should accumulate without the buyers having to fret over it.

More often than not, users get peeved when they have to enter a PIN or a coupon code just to partake in the loyalty program. This needs to be simplified by making it possible for your users to participate by paying with a dedicated card or app, for example.

The convenience you offer will make it easy for users to stay active on your website as a natural response to the great experience they have when shopping with you.

If your users need anything more than a login, card or app to become a part of your loyalty program, then it is probably too complicated to work with. Simplify it and see the difference. It is very likely that your customers will start participating more often.

4. Your Program Should Offer Value

If you want your loyalty program to be enticing to your customers, you have to ensure that it provides them with real value. A lot of loyalty programs tend to be shallow and do not provide rewards that make a difference to customers, which is why they fail. Customers today are smart and they can tell when a program is offered only to get them to sign up.

Keep in mind, a valuable loyalty program is one that pays off. Rewards such as cash-back offers, discounts, couples, rebates, and freebies are always a hit with customers. Tangible rewards will be snapped up quicker than the intangible ones, as the latter are perceived as superficial.

5. Tickle Users’ Curiosity

Your loyalty program will be a lot more effective if it contains an element of surprise (the pleasant kind) and/or mystery (the easy-to-solve kind). If you can tickle their curiosity, you will have them eating from the palm of your hand.

Loyalty programs can work well here as customers will always be waiting with bated breath to find out more about the next level, how to achieve it and what the final outcome is like. And this is exactly what you want!

You can do this effectively by introducing an element of obscurity in your loyalty program. For example, offering undisclosed “special bonuses” to regular customers at the highest level can do the trick. The unspecified bonus could be anything from a special preview of an upcoming sale event to an invitation to a special social event. If they want to find out, they will have to spend at your store and join your program. That’s the crux of the matter: their curiosity drives your sales.

6. Keep Users Engaged

A loyalty program requires continued participation in order to be successful. After all, it is this program that’s going to make your customers want to buy more from you. It is, therefore, critical that participation is encouraged.

How do you foster loyalty among prospective customers? We’ll tell you.

  • Encourage activity. If the customers become dormant, they should know there’s a penalty waiting in the wings. Create the program in a way wherein the points lapse or the redemption amount plummets after a certain period of inactivity.
  • Send reminders and alerts to your customers about their pending reward points and ask them to remain active. Your reminder should also let them know about their potential to earn more. Failure to do so can result in them dropping out from the program over time. There are several ways of doing so. Get their email address and send them email updates; or get them to download your app and provide push notifications. The idea is to egg them on participate as much as they can and improve your conversion rates.
  • Make it better for active users. Your loyalty program should be able to adapt to provide better outcomes to those who are active by enabling them to earn the kind of rewards that matter to them. This approach should help you create tremendous customer buy-in. Your customers will be motivated to stay more active, thanks to the real rewards you provide them with. Further, they will also stay interested and engaged in your loyalty program.

7. Bring a Sense of Growth

Everyone likes to see their hard work and dedication bearing sweet fruits. This logic can be applied to your loyalty program as well. You can do so by enabling your customer to “progress” as he/she buys from you. Create a sense of growth or progress, for instance, by allowing new users to earn new levels of rewards. This will motivate them to shop from you more frequently.

Make your customers feel empowered by enabling them to track their progress and eventually get to the highest level of the program by buying from you.

8. Differentiate and Offer Better Experiences

What is the point of buying from you when your customers can get the same experience from other e-commerce retailers? Why would they give you their money when other brands make them feel more special? The answer to both these questions lies in one word: differentiation.

Set your program apart from that of your competition and give your customers a reason to come back to you by offering better experiences. Your loyalty program should have a feel-good factor attached to it, the kind that is unmatched by any other brand in your league.

9. Give Users the Information They Want

Your customers will love you if you unfailingly answer all their questions. When you devise a loyalty program, rest assured that they will have a zillion questions about it. You need to ensure that you answer each and every one of them and keep ambiguity at bay.

Many a time, it is the most loyal customers who have the most questions. They’re always interested in knowing about the schemes – what they entail, what are the benefits, how they can earn more rewards, and the potential risk factors in the program.

This, however, does not mean that you need to provide them with all the terms and conditions of your loyalty program on the entry page. Rather, make it easy for them to find and access important information when they want it.

10. Let It Become the Talk of Town

If you want your loyalty program to gain maximum traction, make sure you make it easy to share and, therefore, grow. Here are three easy ways to do so:

  • Reward customers who share your loyalty program with others or cajole them to join in. This need not mean that your loyalty program has turned into an affiliate marketing program. You are merely thanking your existing customers for sharing. Most of your customers will share it to avail the rewards. You can bolster this by giving them extra points or rewards for getting their friends and family to sign up, thereby allowing your program to grow.
  • One of the easiest and effective ways of sharing your program is by using social media share buttons. You will do well to add social sharing icons to your rewards page, so that your customers can simply click on them and share to relevant pages. Moreover, this will also make it easy for customers to invite other members of their social network to join in.
  • Make it convenient for your customers to post their reward status online. A lot of reward programs enable customers to inform their online friends about what they’ve just achieved on a reward program. For instance, a built-in widget which generates an automatic message such as “I just won a free trip using my XYZ reward points!” would work well. Typically, users feel a sense of pleasure when they earn a reward, and enjoy telling others about their latest achievement.


While there is no fixed decree that mandates e-commerce businesses to have a loyalty program, having one in place makes perfect sense, especially because loyalty programs are highly instrumental in boosting conversion rates. It may not be easy to start them, and they can also get a tad expensive, but most of the time, the rewards are totally worth it. In fact, they can prove to be a great investment! You too will do well to start a loyalty program for your e-commerce business and avail the improvements, conversions and revenues that await you.

(Image Source: 1, 2, 3)

5 top Instagram tips for small online businesses and start-ups


How can Instagram benefit your ecommerce business?  Launched in 2010 and bought by Facebook in 2012, Instagram is a free photo sharing app. Like Pinterest, Instagram is primarily a visual platform. If you consider that images are the most popular type of content for social networks, it follows that you should at the very least investigate the benefits Instagram could bring to your small online business.

Instagram – did you know…

The growing success of visual platforms such as Instagram and Pinterest is rooted in our natural inclination towards all things visual. For example:

  • 65% of us are visual learners
  • 90% of information coming to the brain is visual

5 top tips to get the most out of Instagram for your business

1. Get off to a good start.

Take a look at Instagram for business. It has plenty of resources such as a business blog, inspirational case studies and helpful tips.

Creating an account:

  • Download and install the Instagram app (IOS App store), Android (Google Play Store) or Windows Phone (Windows Phone Store).
  • To sign up you can either use your Facebook account or tap sign up and enter your email address. You’ll need to create a username when you sign up. Bear in mind that this is what everyone will see so, if you can, try to include your businesses name. If it’s already taken you might have to get a bit more creative to incorporate it.
  • Complete your profile by tapping Edit Your Profile.  You only have 150 characters to play with so spend some time crafting your biography – remember anyone can see your Bio. You want it to be interesting and engaging. Don’t forget to include your URL and a profile picture. Your logo is probably the best image to choose.
  • From settings, link your account to your other active business social networks so you can share photos and videos across all your platforms.

Start following, sharing, liking and commenting on other people’s posts. Don’t forget to add your Instagram profile link to your website and email communications.

2. Have a plan in place

Before posting images here, there and everywhere. It is a good idea to have a clear plan of how you intend to approach your presence on Instagram. As a small business owner time and resources are likely to be limited. A clear strategy will ensure your efforts aren’t wasted and you are making the most effective use of your time. Think about what you are hoping to achieve and decide the most effective way of taking that forward. As a starting point:

Set objectives: Having in place some clear SMART (specific, measurable, achievable, realistic, timely) objectives will help ensure you have focus and direction.

What are you competitors doing? Check out what your competitors are doing on Instagram. Who are their followers and who are they following. What are they doing well that you can learn from and what are they doing that’s not so great that you could do better?

Think about Brand: What kind of image do you want to convey to reflect your brand? The photos and images you post should support your brand personality. Instagram for business has some great examples of some creative brands that are well worth checking out for some inspiration.

How often? As part of your planning, think about putting together a schedule. You may have some fantastic ideas, but you need to be practical and think about how much time you realistically have available. Do you have any resources or will posting all be down to you? Like most social media posting regularly is advisable but equally quality will outweigh quantity.

using your camera on smarphone3. Be creative

You don’t need a state of the art, all singing, all dancing camera. Most of us have a pretty decent camera on our phones. With your smartphone you also have the added benefit of having a camera to hand at opportune moments. Saying that, do still take a sensible approach to taking pictures – you still want them to look professional. Checkout this link for some tips on taking better pictures with your smartphone.

Tip: On Instagram photos showing faces get 38% more likes than photos not showing faces

Instagram over 20 filters for you to play with to create the feel you want for your different photos. So let your creativity shine – even if you have rather uninspiring products there is no reason not to get creative. Take pictures of your colleagues, your office, your teams favourite lunch place, awards, celebrations and so on. It’s about projecting a lifestyle that reflects your brand and the personality behind it. It can be a good idea to involve other members of your team and get then snapping and posting.Just make sure you have clear brand guidelines on what is and isn’t appropriate to post.

4. Mix it up

Try to strike a balance between promoting your business and posting interesting and entertaining shots that engage your audience. As we mentioned earlier you can create fun and interesting images of your office, run competitions, post views from your desk, take pictures of colleagues, highlight your production process, charity events you support and attend, team birthdays, favourite products – anything that is relevant, interesting to your audience and supports your brand.

Tip: Scroll through the images Stella & Dot post on Instagram – there is a great mix of product shots (all nicely framed in real-life settings), inspirational text only images, team pictures and videos – all with a feel reflective of the Stella & Dot brand.

instagram stella and dot


Add text to images: Try livening up images with some captions or text. There are plenty of image editing tools available such as Canva or PicMonkey that allow you to easily add text to images and photos.

Video: Online video’s popularity continues to soar and now accounts for more than 50% of all mobile traffic. You can post videos of between 3-15 seconds on Instagram. Adding video is an excellent, and engaging way to mix up your Instagram content.

5. Engage to build an audience

Follow, share, like….Just like any other social media network engaging with your audience is key to a successful presence. Focus on building your community through actively following, sharing, liking and commenting on posts. If someone comments on your post then try to reply to their comment. It is a great way of engaging with your audience.

#Hashtags: To make it easier for people to discover your business make good use of hashtags. It will help put your content in the path of people searching for those particular keywords or phrases. Use hashtags that are relevant to the content you are posting. Try not to go overboard. Instagram allows you up to 30 hashtags, however if you look at the most successful brands you’ll notice they are usually using between 3 and 5.

To add a # to your photos and videos, just type in your hashtags in the Caption field. For example #silver #bracelet.

It is the very visual nature of Instagram that makes it such a useful addition to your social media toolkit. If you haven’t yet set up an Instagram account for your business, then at the very least it’s worth taking a moment to check out all its potential benefits.


We’d love to hear your thoughts and experiences of Instagram so please do leave a comment.