People are four times more likely to buy when referred by a friend. Referred friends are an eCommerce retailer’s dream traffic — the most qualified that you could wish for. So how can you ensure that you maximize referrals? Offering a great customer experience is a good start, but it’s not enough. People are busy, and when surfing the internet they also become lazy — a toxic combination for your referral strategy. However, offering rewards for referrals gives your customers the extra nudge that they need. We’ve also added an optional extra sweetener for the referred person. Just to make sure they buy.
There are many variations of referral rules. You can use just one or any combination of them. With any of the referral rules, if you’re using the New Customer rule the referred person will get it when they signup. Here’s a full list of the beans rewards and loyalty rules.
Referral Fixed Commission
Customers who refer will be rewarded a predetermined amount when their referred friends buy.
Recommended for B2C retailers, the referral fixed commission rule is a great nudge for customers to refer their friends and encourage them to buy. The referrer only gets his or her reward when their friends purchase, so you’ll only be offering credit when you’re closing sales. You can also set a minimum purchase level, meaning that the referrer will only be rewarded if their friend’s purchase is above a threshold that you set. Using the threshold allows you to up the ante — you can create win-win situations for you and your referring customers, motivating them fully, with potential big rewards, because you know that you’ll only credit them if the purchase they encourage their referred friend to make is above a certain value.
Referral Percentage Commission
Customers who refer will be rewarded with a percentage of the purchase their referred friends make.
Recommended for wholesalers and those selling big ticket items, the referral percentage commission rule, just like the referral fixed commission rule gives your customers an incentive to refer their friends and encourage them to buy. The difference here is that rather than getting a fixed amount of beans, the amount awarded with the Referral Percentage Commission rule is a percentage of their friend’s purchase. This is a great way to build a scalable referral program, which adjusts to the value of the customer that the referrer has brought to your business.
Referral — Signup
Customers who refer will be rewarded when their friends sign up to your rewards program.
Recommended for retailers who have long sales cycles, and/or are selling big commitment items, the referral signup rule gives a fixed number of beans to your customers for introducing their friends to your rewards and loyalty program. Although there is no guaranteed purchase here, this rule’s value should not be underestimated. Not everyone is ready to buy when referred, particularly if you sell high commitment items such as subscriptions or luxury items, so this is a great way of introducing a new customer to your brand and getting valuable data, so that you can market to them and prime them to buy. When sales cycles are long the referral signup reward also helps to keep your referrers motivated to continue informing people about your business.
We recommend using this rule when you have a clear idea of what your conversion rate is at the end of the funnel, such as, conversion rate from newsletter to subscriber to paid customer. You can of course experiment with this rule, but we recommend you don’t place too much emphasis on it, until you’ve done the math!
Referral Two Sided Incentives
The referred person gets an extra incentive to accept an invitation.
A must have for all referral programs, the referral two sided incentive rule gives the referred people an even more attractive proposition, offering more beans to spend for accepting a referral invitation. Your referrer has done most of the work by targeting someone who they think would like to buy from your store, so make sure this opportunity doesn’t pass you by through giving a special offer to trigger the purchase. Whether using fixed commission or percentage commission we highly recommend combining it with the referral two sided incentive.