The influence of affiliate program in a fashion MLM ecommerce business

Push for progress

The imperative of broadening the customer base

A front-running fashion ecommerce business felt stranded midway unable to acquire new customers into the brand. Despite having a diverse product range and significant market presence, the fashion ecommerce MLM business saw its user base stagnating, unable to expand, and declining further.

For a dynamic and evolving business category like fashion, having a diverse customer base is nothing short of necessary or fundamental. That being the case, catering to the same customer base did not help the business grow at the rate it used to be. Identifying how this affected the company, distributors involved in it, and the brand credibility itself, the company wanted expert intervention to detect how to overcome this hurdle.

Furthermore, new customers not coming in hindered the brand’s network growth curtailing business expansion or entry into new markets.

Epixel MLM Software made a scrupulous analysis of the scenario and devised a cost-effective marketing strategy through which the brand can increase customer retention and improve sales, together at once.

Dissecting the dilemma

Embracing a new business model

To efficiently acquire customers, we zoomed in on implementing a referral program that is hyper personalized and incentivized, capable enough to capitalize on the brand patronage of existing customers. With this new strategy, satisfied customers could be converted into brand loyalists or ambassadors by incentivizing them with suitable rewards for bringing in referral customers or new shoppers.

As a prelude to adopting a new business model, personalized referral codes were introduced where every customer gets a unique referral code that enables meticulous tracking of rewards and referrals they earned. With this feature, the brand is expected to make a 20% increase in their customer participation within the first month of implementation.

With an aim to enhance engagement, customers were motivated to make multiple referrals through a tiered reward system. The system was carefully designed in a way that customer loyalty is also improved through motivating rewards such as discounts on future purchases, store credits, unlocking VIP status, exclusive access to new launches, and other perks depending upon the number of referrals a customer brings in. Although a bit skeptical about how the system would come into effect, a precise implementation of the same was crafted to help the brand with a 45% increase in repeat referrals and top referrers contributing to new customer acquisitions as high as 60%.

We also identified the need to have real-time tracking and notifications to monitor the status of customer referrals and rewards. With our real-time tracking capabilities, the brand’s credibility rose to new heights for showcasing transparency and trustworthiness in the program. This again was painstakingly devised to improve customer engagement by 25%.

Altogether the referral strategy revived the fashion ecommerce MLM business with an anticipated sitewide increase of 30% in new customer acquisition, and 15% increase in Average Order Value or AOV from among referred customers, considering the possibilities of referred customers’ natural tendency to shop more compared to non-referred customers.

The result spectrum

The shift from static to strategic

Although the fashion ecommerce MLM business entrusted us to primarily increase its customer acquisition rates, Epixel with its experience and expertise in enhancing the business comprehensively focused on improving the business KPIs as well. Which included, enhancing customer loyalty, increasing sales and revenue, building a credible brand foundation and most importantly deriving insights from data.

As a result, the referral strategy helped strengthen the brand-customer relationship by improving the number of repeat purchases and repeat customers, both calculated to increase at an average of 28% within the first quarter of implementing the strategy.

While costs incurred to acquire and retain customers often take a toll on the marketing budget of ecommerce businesses, the referral strategy was envisioned to help the brand cut its acquisition costs by over 35%. This was a breakthrough for the brand which otherwise spent heavily on paid advertising and other promotions.

With referred customers increasing in the network, loyal customers turned into brand advocates who shared their positive experiences with the brand offline and online driving new customers into the brand. With this, the brand is expected to witness a 15% increase in brand awareness for social media mentions, and customer testimonials.

Through meticulous expert intervention and data-driven optimization, the brand derived precise insights into customer behavior and market trends that gave the business a competitive edge.

Challenges and solutions

Overcoming the hurdle

While integrating a new formula to enhance the overall business success was a major intention, we had to face a fair share of challenges in building the strategy. Of which, what got us reworking on our action plan was,