How to increase the customer base by 21% in 2 months and make 11% more sales on referral traffic

    Many services only think about implementing a referral program in their business, when some do and are silent about positive results, fearing the actions of competitors. Others tried and abandoned this venture because nothing came of it. However, since we decided that we will share all our successes and failures with the world, in this post we will present real referral mechanics, which allowed us to increase the number of sales and users by 11% and 21% in 2 months, respectively.

    What is referral traffic
    ? A referral is a user who came to the service on the recommendation of another user and used a referral link or entered a referral code during registration.

    First, some statistics.
    Over 2.5 months of work in Russia, we received:
    -2398 users -499
    referrals - this is 21% of users
    -69 users have referrals - this is 2.8% of all users
    -62 out of 564 purchases made referrals - this is 11% of purchases
    -137 582 of 1,250,753 rubles referral sales turnover.

    As a result, 21% of referrals brought by 2.8% of users generate an additional 11% of sales! Considering that these sales went to us at no additional cost, this is a very good result, proving that we need to deal with the referral program. Let's try to decompose the process of attracting referrals so that it is possible to shift this model to another business.

    User motivation
    This is the first thing to pay attention to. It is important to clearly state the motive why the user needs to bring a referral. For example, we pay 10% of the cashback of each referral. This means that if you invited your friend to the service, you will always get 10% from his cashback. Many do so and have already collected decent referral amounts, given that they themselves bought practically nothing.

    Referral calculations
    The more clearly the referral model will be explained, the greater the likelihood that users will understand and use it. It is important to write a clear script that will explain what the user will be able to get and how much to make. Our scenario looks like this: For example, you have 100 referrals, each of which bought for $ 100. The turnover was 100 * 100 = $ 10k. The average commission is 5%, then the accrued cashback is $ 10k * 5% = $ 500, which each of the referrals receives. Your referral 10% is $ 500 * 10% = $ 50. This is quite a bit, but you do not need to do anything to get this money, just tell your friends about the new service.

    Earnings scaling
    For the future forecast, you can resort to additional motivators that describe the scaling of referral earnings. We have it this way: the number of friends for most users in each social network is several hundred, and if you take all the networks, then thousands of users. Users will buy more than once, but many. For example, if the operations described above happened not one but 10, then the referral bonus will already turn into $ 500. The Internet sales market is growing around the world and only in Russia will it increase 5 times by 2020, so that the turnover will only increase, and with it the referral bonus will grow.

    To explain referral mechanics, you can create beautiful infographics, or simple video stories such as those that in a simple way will tell about the advantages of your referral traffic:

    Why referrals will lead specifically to you
    If there are competitors, then you need to tell the user a legend that will explain why you deserve his friend. It is important to understand that you cannot call the same friend into two identical services, so you should talk about your uniqueness. We have one of the largest bases (2000 online stores), which competitors cannot boast of.

    User portrait
    This question is very important because it allows you to understand the portrait of the user who leads referrals. According to our statistics, these are the following people:
    -Bloggers who write articles and shoot videos. We have cases where a video blogger simply put a referral link in a comment under a video, without even mentioning the service, and regularly receives referrals who make purchases. How much more would he have subscribers if he mentioned the service ?!

    -Webmasters who think how to monetize their resources. The built-in button, which we will discuss below, is well suited for them.

    -Users of social networks. There are many cases when a user simply writes a call in his stream, and many users come to him.

    -Users of forums. Some start separate topics in specialized forums, for example, related to purchases and put their referral links there.

    -Just friends. It's so simple: I told a friend about a new cool service and you get a pleasant “touch” to the account.

    Referral tools
    On this page, each authorized user sees the following tools:

    - Social sharing buttons that already contain your referral code. That is, if you published a post on a social network and your friend registered on it, then it automatically becomes your referral:

    Now we are also working on new tools that, in our opinion, will increase the figure of 2.8% of users of referring referrals, say, to 5% or up to 10%, which will help generate instead of 11% - 20% or 30% of sales! We will talk about these tools next time.

    Each service determines whether to use referral traffic itself, but given the fact that this is a free way to increase your turnover and expand your customer base, the answer is obvious.

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