How to Use a Mobile App Referral Program to Reach More Customers and Increase Shopify Store Sales?
Acquiring new customers is becoming a costly affair for eCommerce businesses. Driving traffic to their online store is tough - now imagine getting them to the app store to download your brand’s shopping app. Easier said than done!
Now you could either continually increase your marketing and advertising budgets, and discounts, or take a more strategic approach.
If you ask us, the former isn’t an option if you’re looking at also increasing your Shopify store sales and revenue, alongside profits, at the same time.
That’s where a mobile app referral program comes in handy!
In this blog, we’ll deep dive into the what, why and how of setting up eCommerce mobile app referral programs for your Shopify store.
What is an eCommerce mobile app referral program?
An eCommerce mobile app referral program is a strategic marketing approach that leverages the power of word-of-mouth recommendations to acquire new customers and promote your mobile app.
In an eCommerce app referral program, you incentivize your existing customers (also existing mobile app users) to refer your eCommerce app to their friends, family, or social networks, thereby expanding your customer base.
By implementing a mobile app referral program, you create a win-win situation. Your customers are rewarded for their referrals, while your business gains access to a broader audience without relying solely on traditional advertising methods.
This organic approach capitalizes on the trust and influence of personal connections, as people are more likely to try out a mobile app recommended by someone they know.
How does a mobile app referral program work?
As we discussed, mobile app referral programs operate on an effective mechanism that harnesses the potential of word-of-mouth recommendations.
Here’s what the basic mechanics of how an eCommerce mobile app referral programs work looks like:
- Offer Presentation: The eCommerce app user is presented with an offer to refer friends and family to the app in exchange for a reward or incentive. This offer can be communicated through any channel, like pop-up messages, emails, or in-app notifications.
- Unique Referral Link or Code: If your existing customer chooses to participate in the referral program, they are typically provided with a unique referral link or code. This link or code is what they will share with others to refer them to the app.
- Referral Attribution: When a new user clicks on the referral link or enters the referral code during the app signup process, the referral is attributed to the original user who shared the link or code. This attribution is crucial for tracking and identifying successful referrals.
- Completion of Action or Milestone: Once the new user has completed a specific action or reached a predetermined milestone within the app, both the original user and the new user are eligible to receive the promised reward or incentive. This milestone could be making a purchase, reaching a certain level, or any other desired user engagement metric.
Though the specifics and incentives of the referral programs can be different based on what you sell, the core principle remains the same — an eCommerce mobile app referral program is a structured system designed to incentivize users to share the app with others, ultimately driving user acquisition and engagement.
What are the benefits of mobile app referral programs for eCommerce?
As we mentioned, the mobile app referral program is a win-win strategy. So the benefits are not only for your business but for your customers too. Let’s explore these benefits:
Benefits for Merchants
- Increased User Acquisition: A referral program lets you expand your customer base by leveraging your existing users. By incentivizing them to refer friends and family to your app, you tap into new networks and acquire new users, helping your app reach a broader and more relevant audience.
- Improved User Retention: When users refer others to your app and witness the benefits of the referral program, such as receiving rewards or incentives, they are more likely to remain engaged with your app themselves. A referral program can enhance user loyalty and encourage continued usage.
- Higher Conversion Rates: Referred users are more likely to trust and engage with your app since they received a recommendation from someone they know and trust. This increased trust translates into higher conversion rates for your mobile app referral program.
- Enhanced Brand Loyalty: By offering rewards and incentives for referrals, you foster a sense of loyalty among your users. Those participating in the mobile app referral program develop a stronger connection with your brand, leading to continued app usage and a higher likelihood of repeat purchases.
Benefits for Customers
- Opportunity to Earn Rewards or Discounts: Referral programs allow customers to earn rewards, discounts, or other incentives. By participating, customers can save money or gain additional value from their purchases, enhancing their overall experience.
- Sharing Favorite Products with Others: A mobile app referral program enables customers to share their favorite products or services with friends and family. By referring someone to your app, they are helping you acquire a new customer and sharing something they genuinely believe in with people they trust.
- Increased Trust through Peer Recommendations: By participating in a referral program, customers strengthen their relationships with friends and family by recommending products and services they believe in. This process builds trust, fostering long-term loyalty to your brand.
How effective are eCommerce Mobile App Referral Programs?
Here are some mobile app referral program statistics that suggest why your business should invest in it:
- Experts have found that referred users can lead to a significant increase in profits for brands, with an estimated minimum of 16%.
- It has been observed that customers who come through a referral program have a 37% higher chance of being retained.
- It has been found that 28% of millennials are hesitant to use a product that has not been previously approved by someone in their social circle.
- 81% of consumers are highly attracted to brands that offer referral reward programs.
How to create an effective eCommerce mobile app referral program?
Creating an effective referral program for your eCommerce mobile app requires careful planning and execution.
Here are seven actionable steps to help you create your mobile app referral program:
1. Set Clear Goals
Start by clearly defining the objectives you want to accomplish through your referral program. Are you aiming to boost eCommerce app user acquisition, drive specific actions (such as purchases or app downloads), or enhance overall app engagement?
Having well-defined goals will guide the structure and measurement of your program, ensuring its effectiveness.
For example, if your goal is to increase user acquisition, you may focus on rewarding users who refer a certain number of friends or family members.
2. Incentivize Both Referrers and Referees
To motivate users to participate actively in your referral program, provide enticing rewards or incentives to both the referrers and the referred users.
You should think about what would be valuable and appealing to your target audience. Consider offering attractive discounts, exclusive offers, freebies, or valuable loyalty points that excite users to participate.
By providing incentives to both sides, you create a win-win situation that encourages continued participation and engagement.
3. Simplify Sharing
Make it effortless for users to share your app with others. Provide pre-generated referral links or easy-to-share codes that can be conveniently sent through popular messaging apps, email, or social media platforms.
By simplifying the sharing process, you remove any barriers or complexities that may discourage users from referring others. The easier it is for them to share, the more likely they are to do so, expanding the reach of your app.
You can also use a Shopify store mobile app builder and its integrations feature to allow customers to directly share the links from your app to the social media platform or messaging apps of their choice.
4. Personalize Referral Messages
Encourage users to personalize their referral messages when sharing your app with others, as it adds a genuine touch and authenticity to their recommendations.
When they highlight the unique benefits, standout features, or their personal experiences with the app, it significantly influences potential new users, increasing the chances of conversion.
5. Track and Attribute Referrals
Establish a robust tracking system to attribute referrals to their source accurately. This ensures that referrers receive the appropriate rewards and helps you measure the effectiveness of your referral program.
Tracking mechanisms can include unique referral codes or links that are tied to individual users. By effectively tracking and attributing referrals, you can gain valuable insights into the success of your program, identify your most effective referrers, and make informed decisions to optimize the program further.
6. Leverage In-App Promotions
Utilize push notifications, banners, or pop-ups strategically to promote your referral program to existing users. Remind them of the enticing rewards and benefits they can earn by participating.
These in-app promotions serve as gentle reminders, keeping your referral program top of mind for users and increasing their engagement and motivation to refer others.
Ensure that the promotions are well-designed, visually appealing, and placed strategically within the app's user interface to maximize visibility and impact.
7. Monitor and Optimize Performance
Continuously monitor the performance of your referral program by analyzing key metrics such as referral rates, conversion rates, and user engagement. And you should also regularly review the data to identify areas for improvement and optimization.
Pay attention to how many referrals are generated, how many convert into active users, and the overall impact on app engagement.
Additionally, actively seek user feedback to gain insights into their experiences and suggestions for improvement. Incorporate these insights to enhance the overall user experience and maximize the effectiveness of your referral program.
By taking care of the above-mentioned factors, you can create an effective eCommerce mobile app referral program that not only drives user acquisition and engagement but also establishes a loyal customer base.
Best practices for eCommerce mobile app referral program success
To create a successful eCommerce mobile app referral program, you need to follow some best practices that will help you generate optimal results.
Here are some guidelines to consider when designing your referral program:
1. Easy Navigation
Make your referral program easy to navigate, ensuring that users can find the referral link and important information effortlessly. This is where you’ll need a good Shopify store mobile app builder to make navigation frictionless.
You must place the referral link in visible areas above the fold, eliminating the need for excessive scrolling. Consider utilizing push notifications sparingly to remind existing customers about the referral program and direct them to the referral app screen directly.
2. Simplified Messaging
Keep your referral program messaging simple and concise. Clearly communicate what you want customers to do (refer) and what incentives they will receive in return. Use clear call-to-action phrases and strategically place social share buttons for easy clickability. Short and catchy phrases like "Give $20, Get $20" effectively communicate the benefits of participating in the referral program.
3. Valuable Rewards and Incentives
Make referring others to your app worth the effort by offering valuable rewards and incentives. Consider examples like AJIO’s “up to INR 1500” program, where the referrer can earn up to INR1500, and the referred user receives INR 50 as soon as they sign up.
The rewards should be enticing enough to motivate users to actively refer their friends and family, increasing the chances of successful conversions. You can maybe offer complimentary products to the referred users on their first order or give discount coupons to the referrer. Doing this ultimately brings more users and sales.
4. Social Sharing Integration
Take advantage of the social sharing integration capabilities of mobile devices by including multiple social media sharing options in your referral program app. Choose platforms that align with your target audience's preferences and pre-fill the referral message box with a standard yet personalized message. This simplifies the sharing process and reduces the time and effort required for customers to refer their contacts.
5. Seamless Referral Process
To make the referral process seamless, you can minimize the number of steps and pages required for customers to complete the referral and pre-populate customer information whenever possible to eliminate redundant data entry.
You can also utilize pre-generated referral links or codes that can be easily copied and pasted by customers, ensuring a smooth sharing experience. Also, allow customers to customize messages and choose specific contacts they want to refer.
Moreover, keep the screen size of mobile devices in mind and strive for a clutter-free design that prioritizes easy messaging and sharing.
By following these best practices, you can create a seamless and engaging referral program that encourages users to refer others to your eCommerce mobile app.
Recommended Apps for Setting up a Referral Marketing Program
There are several Shopify apps for creating referral marketing programs in the App Store. But here are some of the partners we’d like to recommend:
- ReferralCandy - One of the best apps to set up referral marketing programs, ReferralCandy also lets you create post-purchase popups, email follow-ups and more to convert customers into brand advocates with rewards that encourage them to engage proactively.
- Refersion - Although popularly known for setting up affiliate programs for creators and influencers, the Shopify app also enables you to use the same framework to create a trackable referral marketing program.
PS. We are exploring more Shopify apps for referral marketing and will be updating this list soon.
Amplify Your eCommerce Growth with a Mobile App Referral Program
Leveraging an eCommerce mobile app referral program can be a game-changer for your business, helping you reach more customers and drive growth.
By following the best practices outlined in this blog, you can create an effective and user-friendly referral program that maximizes user acquisition, improves retention, and boosts brand loyalty.
If you're ready to take your mobile app to the next level and kickstart a referral program, our team of experts at Shopney is here to assist you every step of the way.
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