On-line Retail List Building with Customer Referral Rewards

[tweetmeme source=”getintheinbox” only_single=false]I’ve been having a conversations recently with a few on-line retailers about list building tactics and then after a quick chat with Claudiu at PadiCode about his latest blogs on on-line retail I felt compelled to publish my thoughts.

Firstly, for context, go and have quick read of Claudiu’s blog “How to beat the top online fashion retailers at email marketing“…

You’ll see that essentially, retailers are doing enough to get the newsletter sign-up on their sites.

If’ you’ve read “Strangers to Fans, Search to Subscriber” you know I believe so much money is being focussed on search and ads but so much of it is being thrown away by not capturing email addresses of the bouncers – people who don’t convert.

With all of this together I came up with this concept:

Referral Rewards

There is no higher recommendation for a brand than that of your friends and the subsequent good experience from a friend’s recommendation is almost always remarkable enough to say thanks and tell others about it.

Subsequently I’d recommend that retailers, and anyone else who can work it in, to focus on referral schemes, where people can be rewarded if someone they recommend spends money – do not incentivise pepole to enter their friends’ addresses because people will make up addresses to get something for nothing – only reward for purchase the purchase!

A cheeky referral method is to create personal referral codes that existing customers can give to their friends or paste on their Facebook pages for example, for their friends to enter when they purchase. You can then track that back to a existing user who will get a reward like a voucher. Not unlike Amazon affiliate links.

This could also offer discount or free delivery, for instance, on the friend’s first purchase if you wish.

This can help build lists and customer loyalty without incentivising people to try and beat the system for something free.

It can also help you link people together into micro-communities within the shop, like a social network for purchasing from you.

Link Love

If you look further into the Amazon affiliate links, this could be recreated for anyone, they simply put a link with their own referral code in anywhere, people click through to the site and if they purchase, the existing customer gets a reward.

You could then merge this in to your sign-up form lightbox and make it appear specifically for these people to optimise the email capture. Capture the referral code there too, then you can know who’s building your list and when they purchase you can see who’s delivering your revenue.

Implementation?

I’ve not been hands on with eCommerce in a while but I’d expect that Magento would have something that could manage this?

If you’ve got any ideas feel free to stick them below in the comments.