Unlocking E-commerce Customer Acquisition Potential: The Power of Referral Marketing and Email Campaigns

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One of the biggest tools that any business can use is the power of referral marketing. It stands to reason that consumers would trust their friends and family over traditional marketing techniques, and this is something that has been proven again and again.


When you combine this with properly timed email campaigns, it’s definitely possible to increase your bottom line without spending a lot of your marketing budget!


Understanding the impact of referral marketing in e-commerce customer acquisition

Referral marketing relies upon word-of-mouth from one consumer to another. The reason this works so well is that consumers actually know their friends and family, and therefore, they can judge a referral that comes from them appropriately.


For instance, let’s say you have a friend who typically loves the same type of movies that you do. If they tell you that the latest film was a blast, this is going to mean more to you than if a critic liked it (or hated it). That’s because your friend has a rightfully earned reputation as a good person to go to for movie recommendations.


Here are some of the many reasons you should absolutely use referral marketing for e-commerce customer acquisition:


  • A whopping 78% of B2B marketers have gotten excellent or good results from referrals.
  • 60% of all marketers say that referrals will generate an impressive number of leads.
  • Most importantly, 54% say that they get a lower cost-per-lead by using referrals versus any other channel.


In other words, if you haven’t been focused on referral marketing, it’s time to start.


Designing and implementing an effective referral program to incentivize and motivate customers to refer others

So, how exactly do you take advantage of consumer referrals?


Some places simply offer a 10% discount, but we’re here to tell you that there’s nothing exciting about that. In fact, if your average purchase costs $25 or less, it’s probably not going to do much to move the dial.


Instead, you need to offer something that people actually want. You can do this in a number of different ways. To begin, answer the following questions.


  • What are your consumers’ motivations?
  • Are they likely to become repeat consumers or only order once?
  • How expensive is your average purchase?


Once you’ve got answers to these questions, you’ll be in a much better position to design a successful referral program. Here are a few suggestions:


  • If they’re unlikely to make a second purchase, offer cash for a referral.
  • However, if they are likely to purchase again, give them a discount.


What type of discount should you offer?


  • If your items are more expensive ($100+), offer a flat dollar amount. For instance, $25 off of $100.
  • If your items aren’t expensive, offer a percentage. 20% off of $50 has a better ring to it than $10 off of $50.


The role of email marketing in amplifying referral efforts and driving customer acquisition

Email marketing is much hotter than most people think. In fact, 70% of companies have chosen to increase their email marketing. As far as email budgeting, only 1.3% of businesses are planning to decrease it.


In other words, email still rules marketing!


Of course, you have to be willing to put in some time and effort. Utilizing each of the following methods will give you a much greater success rate.


  • Segment your lists – Using common characteristics to decide who gets which emails can greatly increase your odds that a consumer will open your email.
  • Simple and concise – If you keep your emails simple, concise, and to the point, consumers will be more likely to follow through with a referral or two.
  • Engaging subject lines – Again, short, concise, and to the point work best.
  • Eye-catching visuals – Using graphics, videos, or images that help support your point can capture a lot of attention.
  • CTA – Each email you send needs to have a clear CTA. In this case, asking for a referral and clearly spelling out what your consumer will get for one is the best choice.


If you follow these simple steps, you should increase your referrals and customer acquisitions.


Leveraging CloudSponge’s contact picker tool to simplify and automate the contact collection process for referral campaigns

CloudSponge offers a contact picker tool that can greatly simplify the process of gathering new email addresses. Instead of asking consumers to manually type in the people they’re referring to you, the contact picker tool offers a better way.


Your consumers won’t have to copy and paste, upload a spreadsheet, type, etc. Instead, they can pick their contacts from within the contact picker tool and then let the contact picker automatically upload them to you. The ease of this process can’t possibly be overstated, which means that most people won’t have anything that stands in their way.


Once you’ve collected a series of email addresses from referrals, you can begin reaching out..


Analyzing and measuring the success of referral marketing campaigns through key metrics

If you truly want to know how successful your referral marketing campaign is – and of course you do – you’ll need to use a few specific key metrics.


  • Participation rate (from existing consumers)
  • Share rate
  • Impressions/reach (from the friends of existing consumers)
  • Response/conversion rate


Beginning with the participation rate, you’ll be able to monitor how well your referral program is working. For instance, if you receive a low participation rate, this indicates that you need to use different channels to reach your existing consumers.


From there, analyze how many people actually share your information. You can go into a deep dive here by also figuring out what specific channel was used the most. Did they use email, social media, a dedicated link, etc.? Whichever channel won should also be utilized for additional advertisements.


If you receive a share rate of 15% or more, you’re doing pretty well!


You may not be able to fully track how many impressions your referrals received, but you can track emails and social ads. Either way, getting as close as you can to figuring out how many people shared your referrals will also let you know how successful your particular referral campaign was.


Finally, knowing how many conversions you got will tell you your referral program’s impact on your bottom line. How much can you realistically expect? Well, if you’ve offered a decent enough referral to get people invested in advertising for you, then you should be able to expect at least 10% ROI.


Real-world examples and case studies showcasing successful customer acquisition through referral marketing and email campaigns  

There is a virtually countless list of companies that have successfully used referral marketing and email campaigns to increase their customer acquisition. Here are just a few:




When UK-based mobile phone provider SMARTY wanted to increase its subscriber base, it knew exactly what to do. By offering the referral and the referrer a month for free, they definitely hit a grand slam.


In the first quarter of 2021, SMARTY used this program to grow its revenue by 154%! In fact, they grew so quickly that they changed their referral program quickly thereafter.


If you were to be referred to SMARTY right now, you’d receive £10 off your first month. That’s quite a difference from getting an entire month for free, but everyone knew that the free month wouldn’t last long once the results of the program came out.




Gousto is a UK-based food subscription service. As such, they offer their customers a £20 credit for each successful referral.


What does the referred individual receive? A whopping 65% off their first box, plus 25% off any subsequent boxes for their first two months (minus shipping).


So, how well has this worked? A lot better than Gousto thought it would, that’s for sure! They used to receive 80% of their users through performance marketing. Now, however, they get 82% off all new customers via referral and organic marketing.





Despite having a somewhat complicated referral program, Robinhood has done extremely well with it.


The way it works is that users refer a friend to the program, and once they sign up, Robinhood gives the referrer anywhere from $5 to $200 as a thank-you. They have said that most referrals are worth $5, so that’s all you should expect. Then, you can be happy if you get more!


Users can then trade the cash in to purchase stocks. Please note that there is a $1,500 limit. By offering this program, Robinhood was able to cut its overall marketing costs from 72% to 32%! If that doesn’t show the power of referral marketing, we don’t know what does.


Make collecting emails a breeze!

Do you have an area on your website for collecting consumer emails? Optimize it by adding Cloudsponge’s Contact Picker! It doesn’t matter what you’re selling or which email provider a person has – and the entire process will take you only five minutes to set up.


Visit our website to get your free two-week trial and greatly increase your email list!

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