Few factors, if any, are more crucial to e-commerce success than referrals.
Referrals turn the foolproof advertising concept of word-of-mouth into a well-rounded marketing strategy that many businesses use to acquire users. This wasn’t possible in the age before social media.
Referrals work because they’re simple. Referral structures are easy to install on a website, and easy for customers to use. Apps and tools help companies run and troubleshoot their referral programs with minimal effort. Referrals can be deployed across almost every facet of an online business: email, push notifications, inhouse apps, and the homepage.
But referral programs aren’t working for social influencers, especially the larger ones. Influencers large and small do get some kickback through these programs, but it’s not enough.
The reason? Their rewards programs don’t reflect how referrals boost long-term site traffic.
Fortune claims that the average Amazon Prime member spends $1300 on the platform annually. If an advertiser sends a customer to Amazon for a single purchase and that customer ends up becoming a Prime member, the advertiser only gets paid for that first, single purchase. That one sale isn’t significant to Amazon, yet it’s the thing on which they base their reward.
What matters is traffic. An advertiser could drive 10,000 brand new customers to Amazon Prime — theoretically generating $1.3 million in annual revenue — but the reward they get isn’t proportionate to the value they’ve produced for Amazon.
If one referral source is creating substantial new traffic, then they should get rewarded for that traffic, not just single transactions.
Tokenization: Rewarding Sales + Behavior
Blockchain technology presents great possibilities for referrals. It can broaden the user referral base, so everyone can make money. That’s where tokenization comes in.
Tokenized referrals offer high incentives for behavior — not just sales — that the major e-commerce players won’t reward. These actions include:
- Product reviews: every time a user offers a star rating, grade or description for a product.
- Answering other user questions: giving tips and tricks helps improve product profiles and crowd source solutions and information.
- Voting on changing platform regulation: blockchain platforms are based on user-owned, democratic models. Encouraging users to shape platform consensus can increase their token holdings and strengthen their sense of participation.
- Self-governing the crypto community: letting users run their own show slashes a platform’s operational costs. Tokenization encourages and rewards users for their interest and input.
- Volunteer affiliate marketing: reward users who post links and follow profiles on social networks.
The versatility of tokenization allows incentives to take many different forms. All activities and interactions can be incentivized, translated into rewards, and instantly tracked on the blockchain, just as sales are.
Raising a Token’s Value
On the surface, getting more people to review products, engage in forums and manage the marketplace might just look like helpful things to do for a community. But these actions, and the referrals they generate, can also have a tangible effect on the value of the platform’s token.
Most social-based websites and apps become better experiences the more users they get. Referrals are the most efficient and cost-effective ways to achieve that.
When users are given more rewards for contributions to a decentralized ecosystem, you can expect them to refer more often. That incentive gives users a vested interest in the growth of the platform.
And the more users who join the platform, the more likely its currency — the token — will appreciate. When you tie tokenized rewards to referrals, you’re gradually increasing the value of the token as the network expands, because you have more people who want to use that token. The more demand there is, the more a token is worth.
The ECoinmerce Token Solution
Tokenized incentives present a win-win situation for everyone in a platform’s community. Users get rewarded and platforms see their value increase as more people talk about and use them.
The ECoinmerce referral program is driven by this philosophy. They will pay more with tokens–potentially 100 times more than Amazon and Groupon, especially for early advertisers and influencers.
ECoinmerce will immediately empower users to govern the platform community. The moment you create an account and start sharing on social media, you become an affiliate. And ECoinmerce pays for lifelong user value, not just one purchase. If the user keeps spending, they keep paying. Smart contracts on the platform will give users a recurrent token incentive that sustains over the long term — even a lifetime.
The ECoinmerce referral program will be visible and easy to comprehend. Similar to Steemit, you’ll see exactly how much other people made by sharing and referring.
Equity, customer ownership and dedication are still building blocks to business success, even in the new world of e-commerce. Major players like Amazon may be too big to make those blocks work for them.
But ECoinmerce can. And with their token incentives program, they will.
Thoughts? What else is blockchain improving? Let me know what your think in the comment section below or start a discussion at your next meetup.
Token Incentives: The Key to Quicker and Better Referrals was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.