STEP 1: Think About Outcomes
It all starts with the outcome. Think about the result that you like to get from your affiliate program. It all starts there. You cannot just create something without thinking of the end goal. You need to know where you’re headed before you can go there. With this, it is essential to determine the outcomes that you like to get out of your referral program. Think about these questions: "Do you want to get more traffic? Do you need more resellers? Do you need better brand exposure? Do you need to build more trust with your resellers?" You need to answer these questions and consider these things as you create your referral program. By doing this, you’ll know the action that you need to see to determine your referral program’s success.
For example, you like to see more traffic. When this happens, you need to look at your analytics and reward referrers as they give you the contact information of their family and friends. However, if your goal is more resellers, you can reward referrers when their referral successfully signs up as a reseller. You only give the reward when they sign up. You need to know your desired outcome so that you can structure your referral program the right way. Once you know your result, you can now determine your desired action. Is it a website click or visit? Is it a new subscriber? Is it a new seller sign up? Is it a sale that the reseller made? You have to choose one from these and take note of the action that you’ll like to see in your referral program. Only when you have decided on this can you proceed to the next step.
STEP 2: Think About Your Rewards
Next, you should think about your reward. You cannot launch a referral program without compensation. If you do that, then that’s not a referral program. It’s a request for promotion with nothing in return. That’s not an excellent way to convince people. You’ll need to give them something in return for the effort.
Rewards don’t need to be complicated. You can give away a simple exclusive discount code to the referrer. In a dropshipping business, you can give the referrer more substantial commissions in exchange for their referrals. Another model is the network model, where the referrer gets a percentage of their referrals’ sales. This means that if the references have multiple referrals, and each of them managed to generate some transactions, the referrer earns more. This is the model that works for multilevel marketing businesses, and it can work for dropshipping companies as well.
It is important to remember that there are different types of rewards. The standard eCommerce referral rewards are cash, discount codes, and freebies. However, these rewards may not work that well with dropshipping businesses. It is better to give the resellers higher commissions or give them exclusive freebies for their promotions.
STEP 3: Think About Who To Reward
Every referral program has two actors: the referrer and the referral. The referrer is the person who promotes the brand to his family and friends. The reference, on the other hand, is the person who takes action as a result of the promotion. The person can sign up as a reseller, subscriber, or buy an item. It all depends on your desired action, as you have defined in step 1.
From there, you should determine who you’ll reward. Will you reward the referrer or the referral? It is an excellent rule to eliminate friction as much as possible. This means that if an actor is on the fence to take action, you reward them for giving push them to do it. For example, the referrer may be hesitant to promote your program if you don’t pay him. So you should do that.
Similarly, the referral may also be hesitant to sign up. So you should reward him as well. Because of this, it is ideal for paying both. This eliminates any friction from both parties and pushes them to take action. The only downside of this approach is that it is expensive. This means that you spend more on each referral. You can cut your costs by providing discount codes or a percentage of sales to your leads. It may not be good in terms of profit. But it will pay you in the long run in terms of brand exposure.
STEP 4: Create Your Referral Program
Now that you have your outcome, reward, and actor to reward, it is time to create your referral program. Doing this is easy if you have a referral marketing software. The software will help you create and launch a program in a single click. It has helped Shopify websites like Best Hunting Bow Labs, and it can improve your dropshipping webpage as well.
STEP 5: Promote Your Referral Program
You cannot just create a referral program and wait for it to work. You need to promote it. First, your customers and subscribers should know that it exists. You can let them know by sending an email or putting your referral program link in the announcement bar of your website. Or you can launch an influencer marketing campaign to let other people in your niche know about the existence of your referral program.
As you can see, launching a referral program for your eCommerce dropshipping website is not that difficult. You need to know the outcomes that you like to see and understand the mechanics of your referral program. Once you have that down, you can easily create a referral program with software and launch it through primary website promotion.