Creating a Referral Program for Your E-commerce Website – Sher Singh Way

A B2C e-commerce site ideally revolves around 4 core aspects:

a) a shopping experience
b) a social sharing experience
c) a referral (invite) experience
d) a loyalty program experience

A Dot.com that can do these 4 effectively, will survive the ‘Dot.com bust‘ when it comes, which it surely will in India. Sooner or later. Result – most e-commerce websites, popping left and right, selling every thinkable item on Earth under the Sun, at ridiculously discounted rates; and discounts, discounts and more discounts; would be eventually wiped out. More of the likes like Taggle.com and LetsBuy.com and others.

The question that arises then – how does an e-commerce website make the difficult transition from a “website selling discounted stuff” to an “Online Brand”? Its covered in detail here.

As for this blog post, lets see a few high-end, fashionable, chic, successful brands online; doing ‘thinks differently’.
What are they doing ‘differently’?

1. Warby Parker

Possibly the most meaningful Corporate Social Responsibility (CSR) program out there. See here. DO GOOD. Buy a Pair, Give a Pair.

The content on the site does a fabulous job in explaining the CSR program; how every purchase is benefiting society and what role Warby Parker plays. A lot of other brands online have a CSR program; but is not explained so well as on Warby Parker.

2. Made.com

The best example of an e-commerce site with a Voting application integrated. Need items to be voted by users? Check out the Made.com Vote page. This is a must have on your e-commerce website if you wish to gather some quality user-generated data on designs for your products.

Alternatively, check out lifestyle brand, Sher Singh’s ‘Vote & Win’ application on Facebook. Another effective way of gathering user-generated data (in terms of voting), for your designs. Though definitely the application on the web-site works better.

3. Fab.com

Fab.com is probably the queen of social curation of fashion e-commerce websites. The ‘Feed’ feature on Fab.com is not only exceptional when it comes to social sharing across social networks; but also increases user engagement and average time on site. You would want your customers to stay on your site for long periods of time; and this feature is exceptional for that.

4. Sher Singh

Not a lot of e-commerce websites have an efficient ‘Referral‘ program out there. A fabulous exception to the rule is Sher Singh’s recently launched ‘Referral’ program, “CENTURY CLUB”. Check it out here: http://www.shersingh.com/referral/

Besides being visually simple, its well explained as well. How do I refer my friends and what happens if I do?
Excellent way to attract new users onto the platform, and convert them into new users. At the cost of? Practically zero.

Shows one the current stage that he/she has reached. And finally, he/she can see all his/her friends imported from Facebook friends list; to whom he/she can sent Invites, and reminders as well. Once your friends receive notifications on their Wall; they can click on that link and come to Sher Singh; and get registered. Once they do; a tracking cookie logs that and you are credited with every person you brought to Sher Singh. And thus, you win points and receive free gifts! Besides being extremely viral in nature, this is a brilliant way to gather fresh email ids for your database, to whom you can now market your products. All this at practically, no cost of marketing & CPC promotions.

Am pretty confident other e-commerce portals in India would soon copy this program and introduce their own version of ‘Referral’ program, but Sher Singh’s program would always remain as a pioneer in this aspect of e-commerce.

Unfortunately, no Indian e-commerce portal has a ‘loyalty program’ worth mentioning, thus, am skipping that topic. Hopefully, someone comes up with something soon.

As the current state of the Indian e-commerce industry stands, with India’s Amazon, Flipkart still struggling to break even after 4 long years and burning around $181+ million in cash; serious questions are being asked in all circles on whether Flipkart is in Trouble; and in general, on the E-commerce Industry as a viable ‘industry with positive ROI’ as such. I personally believe –

a) Indian e-commerce industry has a future; but for e-commerce portals to run, break-even and make a sizable profit; its definitely gonna take a long haul.

b) Indian e-commerce industry is different from the US. Comparing both is ridiculous, since the most important factor in the E-commerce industry; i.e. the “people” are different. They earn different. They live different. They think different. They buy different.

c) Buying patterns is very male dominated in India. Women are still to start buying online. Though investors have repeatedly mentioned this as a good sign – in the sense, when the Indian women do start buying online, our current Indian basket size of 10 million people who are e-commerce savvy, knowledgeable and ready would shoot to 100+ million soon. I doubt this seriously in forth-coming 5 years. Reason – Indian women don’t love buying things online. Not since they are NOT Internet or tech savvy; but its because they love visiting the malls, shops, bazaars and love the touch-n-feel experience of buying items. Can’t and don’t expect this behavior to change in the forth-coming few years. Absolutely not.

d) Metros have a good reach of middle-class and upper-middle class people. With credit cards for shopping online. But this is not enough to support the E-commerce industry. A report on “Population Division of the United Nations on urbanization” in 2010 mentions:

In India, about 14% of urban population — about 53 million people — stay in the three 10 million plus urban agglomerations (Delhi, Mumbai and Kolkata). Another 9%, or 32 million stay in cities of size ranging between 5 to 10 million. A whopping 27%, of total urban population, that is, about 101 million people dwell in cities between half a million and 5 million in size. The bulk of urban Indians — 181 million or 50% — stay in small towns with less than half a million (5 lakh) population. The report also says the rate of growth of urbanization is slowing down.

> Delhi, Mumbai, Kolkata = 53 million people
> Next Tier cities = 32 million people (Bangalore, Hyderabad, Pune)
> Tier II cities = 101 million people
> Tier III (very small) towns = 181 million people

Issue is: 53+32 million is the basket with education + an aspirational lifestyle + outlook aspiring for travel + interest in foreign news and others. Thus, in other words, they are the ones that constitute the current ’10 million’ e-commerce basket size and the future target for pushing that number up to 100 million. But unless more numbers are fed from the 101 million in Tier2 and 181 million in Tier3 to Tier1; this is highly unlikely to happen. And with current state of economic slowdown; and as the UN report mentions – “the rate of growth of urbanization is slowing down“. Thus, my serious doubts.

e) And my last biggest doubt – loyalty. Nearly all Indians buying online buy online, not because of the brand they aspire to, or otherwise, like quality, etc. But price. PRICE, money, is the core governing factor for Indians who buy online. Where’s the brand loyalty? Practically, it doesn’t exist.

Thus, ‘referral program’ and a strong ‘Loyalty program’ is a must. For building core loyalty amongst customers.