One of the most cost-effective marketing strategies for community-driven growth is referral programs. Brands have found that referred customers are 18% more loyal and have a 16% higher lifetime value rate. They also spend 13% more than their non-referred customers. We believe different variations of word-of-mouth, including referral marketing, will form the future of commerce.
There’s almost one referral program for every brand out there. Knowing about other brands’ referral marketing tactics and strategies is a great way to get inspired to create your ecommerce business’ referral marketing program. In this article, we have covered 4 Shopify brands from different industries with successful referral marketing programs.
So, let’s get started!
UNTUCKit started as a DTC brand, selling shirts that could be worn untucked. As a new brand active in the fashion industry, UNTUCKit had difficulty competing with more established brands when it began selling its products.
The fashion industry is notorious as one of the most competitive ones in the ecommerce space. It has the highest ad CPC in comparison to other industries. Moreover, advertising is the main channel for acquiring new customers. Common Thread Collective reports that paid ads make up 60% of all traffic for growth in ecommerce fashion brands.
This Shopify store’s refer-a-friend offer is larger than their welcome offer for new customers (standing at 15%). This serves nicely to UNTUCKit’s purpose. They want their customers to use the referral discount to acquire more customers. A bigger welcome offer only distracts them.
For its refer-a-friend offer, customers can give a 25% discount to their friends for their first order and get a 25% coupon for each successful referral.
This program fits perfectly into UNTUCKit’s broader marketing strategy. This is because, according to UNTUCKit’s founder, Chris Riccobono, “men just want to find a fit and then not change from that.” This makes the 25% offer for existing customers a no-brainer!
Alo Yoga is a sportswear brand founded in 2007, producing yoga outfits. As a brand active in the athleisure and activewear industry, Alo Yoga has dominated social conversation to retain customers.
There are many similarities between the athleisure industry and the fashion industry when it comes to referral marketing. For example, both have hefty discounts for refer-a-friend offers and for next purchases.
As the fastest-growing ecommerce activewear brand (according to SimilarWeb) by web traffic, this Shopify store is everywhere on social media.
Like many other referral programs, Alo Yoga offers $25 in store credit to encourage existing customers to repeat their purchases after each successful referral. However, the referral link is only valid for three months, making their customers feel an urgency to buy more products.
In the second step, when customers want to redeem their code, Alo Yoga tempts them with an additional 10% discount in exchange for signing up for their newsletter.
Alo Yoga also tries to build a good relationship with yoga instructors to establish its dominance in this industry and gain more customers. They offer a 25% discount to certified yoga instructors under Alo Yoga’s Pro Program.
Moreover, on their Instagram account, they repeatedly feature famous yoga instructors. They also have a weekly challenge to encourage their community members to post on Instagram and create user-generated content for them.
This referral program is the perfect example of a brand trying to create a community of yoga and wellness enthusiasts.
Quad Lock’s referral program
Quad Lock is a Shopify store that offers phone mounts and cases for cyclists, drivers, motorcyclists, runners, golf players, and more. This brand has managed to sell more than one million products in over ten countries.
As a brand selling sporting and outdoor goods, Quad Lock knows that sports and outdoor activities can be social. This means that referral programs work very well in this industry. People active in communities of outdoor and sporting activities heavily trust the recommendations of their peers.
Since sporting and outdoor goods are generally long-lasting, referral programs in this industry tend to reward cash instead of store credit or coupons.
Quad Lock’s welcome offer is a 10% discount. Their referral program offers cash as a referral reward for their advocates because they know that their customers will not need to replace their gear any time soon. Existing customers can give a 10% discount to their friends and get back 5% of their friends’ first purchase as a cash reward.
This is an example of lopsided incentives. They offer more value to the referred friend in order to get them to try out their products.
Thrive Causmetics is a DTC Shopify store active in the beauty and cosmetics industry. Just like the fashion industry, the beauty and cosmetics industry is highly competitive. Customer loyalty is one of the common problems that beauty brands face. A survey of 4000 women done by Poshly found that the average customer has 40 different makeup products from different brands.
Customer retention is one of the high priorities for beauty brands. Tiered rewards and points systems are very common among these brands. Moreover, referral programs in this industry tend to offer points to reward their advocates.
Thrive Causmetics’ welcome offer is 10% off of the first purchase for purchases over $50.
Moreover, customers can earn points for referring friends, making purchases, on birthdays, and more. They can redeem points for discounts on future purchases.
For their referral program, current customers can give $10 to their friends and get $10 in points for each successful referral.
This brand’s refer-a-friend offer is also more generous than what a future customer can get for creating an account which is 100 points or $1.
Thrive Causemetics is a brand that fights for causes. They offer organic, vegan, cruelty-, paraben-, latex- and sulfate-free products. For every product purchased, they also donate a product to a woman in need. Because of this, when a referral is made, customers also share the story of Thrive and advocate for its causes. This creates a deeper and more emotional bond with the brand that goes beyond monetary rewards.
These four referral marketing programs have one thing in common. They all work really well, considering their industries and how these brands promote themselves. You can use these programs as inspirations to design your Shopify store’s referral marketing strategy.
If you want assistance in creating a referral program and more, or just want to build your brand’s community of social sellers, let’s have a chat! Contact us via this form, and we’ll get back to you as soon as possible.