What is the best referral program

Referral Marketing Programs: How To Get Your Customers To Recommend Your Brand

E-commerce heavyweights like Bonobos, Rothy's and Everlane are all known for their recommendation or referral marketing programs). These help dealers to turn satisfied customers into regular customers.

However, referral programs can be complicated to set up, do not fit every business and, like any growth initiative, are without a guarantee of success. So when is a referral marketing program really worthwhile? So that you can answer this question for your business, let's take a look at the requirements you need to successfully run a referral program.

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Table of Contents

  • Is a Referral Marketing Program Right For You?
  • Incentives and message: Agree on the details
  • How to Promote Your Referral Marketing Program
  • Your next "best customers"
  • Is A Referral Marketing Program The Right Approach For Your Business?

    Bad news right at the start: The success of referral marketing programs depends on existing, satisfied customers or advocates. That is why there is no magic formula that can predict whether referral marketing will be successful for your shop and whether it can help increase reach. For entrepreneurs seriously considering a referral program, we recommend keeping two variables in mind:

    • Are you already getting organic recommendations through word of mouth?
    • How many sales does your online store make per month?

    To make your referral marketing program a success, you should have at least 100-200 transactions per month. This customer base takes into account the fact that not every customer will be willing to give a recommendation. Some others will forget their initial willingness to recommend or fail to see opportunities to recommend your products to others.

    Reading tip: You can find out how to deal with customer feedback as a beginner here.

    Coordinate the details exactly with your store

    There are a few things that need to be right from the start if you want to start a new program.

    1. The incentives

    The idea behind a referral program is to create an incentive for more conscious word of mouth from people who are already talking non-committally about your store.

    To do that, you need to consider what a useful incentive for both advocates and their acquaintances to refer you to. The right incentives depend on your industry, your product, your pricing and other factors. The biggest question you have to answer: should you use cash or a discount coupon as an incentive?

    The decision depends on whether you expect your advocates to return to your shop for future purchases. If you sell a product that you buy once or rarely (e.g. a mattress), it is better to offer a monetary incentive. Your fan will hardly need five vouchers with a 20% discount on a mattress.

    If you're selling something that people need or need to replace regularly, such as clothes, makeup, or razors, you can assume that every referral coupon could mean two new sales.

    2. The message

    In a referral program, there are several places where you have the opportunity to communicate your brand style - especially through pictures and self-written text.

    You want each of these moments of communication to remind your fans and the friends they convey of what your store is about: your company ethos, your company's mission, and the values ​​your brand stands for.

    Reading tip: Be sure to communicate your values ​​on an About Us page! You can read here what is needed for this.

    Let's look at the example above from 3Bears. The company sells its own porridge and uses all kinds of natural ingredients to present its products. This presentation can also be found in the referral marketing program.

    Referral emails are a particularly important channel through which you can refine your message. These emails are a great way to remind your existing customers that referring friends to your store can be for their own benefit.

    In order for this to happen, however, your emails have to attract targeted attention and trigger the action - the minimum bet is an appealing subject line: short, interesting texts, content that highlights the benefits for advocates and their friends, plus a crystal-clear call to action.

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    Promote your referral program

    Airbnb is one of the top brands often named when discussing and analyzing examples of hugely successful referral programs. But did you know that Airbnb's first referral program was a complete failure?

    It didn't work because it wasn't advertised enough; even Airbnb employees didn't know it.

    A tragic scenario that you definitely want to avoid: investing time and energy in creating the right incentives and messages for a referral program - which customers then completely ignore.

    These are the steps you can take to effectively promote your ecommerce referral program so that the right people know about it.

    1. Email your existing customer list to

    Shop owners who have been in business for years often say with full fervor that they should have introduced a referral program much earlier. Often there is regret because they missed the acquisition of many new customers.

    But that is not always the case. E-commerce companies that already have a certain customer base often take more advantage of their referral programs than newcomers. You have the option of reaching a much larger customer base with an email campaign. In general, the existing audience of an established shop makes it easier to get the ball rolling for a program.

    Reading tip: Email marketing made easy: You can read everything here, from setting up the distribution list to the right content to the first email.

    2. Highlight your CTA for recommendations

    It's frustrating to see how easily customers get distracted. You increasingly have a thousand other things on your mind. Therefore, it is worth the effort to remind them of your offer every step of the way. For example, the shop for particularly protein-rich foods, Pumperlgsund, has given its recommendation program a place in the main navigation. Here are some places you can place the call-to-action (CTA) for your referral program:

    • Header ("Earn $ 20")
    • Hero Image Carousel
    • Pop-up widgets (use sparingly!)
    • FAQ Page: Frequently Asked Questions

    Reading tip: What is important in a good call-to-action? We explain it in this post.

    3. Talk to customers immediately after purchasing

    One of the best times to ask your customers for a recommendation is right after they buy your product. The decision to sell is fresh, and they're particularly open to taking one more small action - ideally, telling their friends about you.

    At this point your text needs to be exactly right. Your customers just bought. They are (hopefully) pleased with their purchase decision that got them what they wanted. You want them to do you a favor, but you don't want it to sound like an extra burden or an obligation.

    In order for you to succeed, you should appeal to the positive feelings your customers will have when a friend appreciates your product after recommending them.

    Reading tip: Say thank you! You can find out why a thank you page is important for your business here.

    4. Add existing channels to your referral marketing

    The Shopify retailer waterdrop shows how it's done

    Your referral program doesn't just have to be anchored in one place - e.g. your site or in your marketing emails. You can and should remind your customers of your program across all marketing channels.

    But do it in a well-tempered way. There are many benefits to a referral program, but it remains a marketing tactic. Time these messages as part of your broader social media strategy.

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    5. Send email reminders to your fans

    It is very easy to overestimate how many customers have heard of your campaigns or recommendations or have taken a closer look at them. We're all busy and that can make us forgetful customers.

    Sometimes it takes several reminders before customers even notice that your shop has a referral marketing program and more before they remember an acquaintance who fits your product profile perfectly. Start with this knowledge and send out reminder emails from time to time.

    It might be tempting to send reminders every week, but what other emails do you send your customers? If you are already sending a lot of emails - discount coupons, announcements for new features, etc. - do not send your referral reminders too often.

    By the way: We have explained here what you should pay attention to when you want to send vouchers via newsletter.

    However, you can also mention your referral program in your planned marketing emails, for example in newsletters! The most important thing is that you always pay attention to the customer experience and make sure it stays positive and enjoyable.

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    Reach your next "best customers"

    Let's not kid ourselves: referral programs are a lot of work. But they work. The customers who participate in your referral program are doing you a great favor - they are motivated enough to think about which of their friends, colleagues, or followers would value your product the most, and it is through this level of targeting that you reach your best, most loyal customers .

    Customer referrals prove that you've built something that your customers really love. If you're selling something that has a positive impact on your customers' lives, a referral marketing program is the way to go: your customers will let others know about your business.

    But it is even more important that you know exactly what size a successful referral program needs. This will allow you to plan how and when to use it. Happy recommending!

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    Posted by Hendrik Breuer:Hendrik is the editor of the German Shopify blog. Do you want to publish a guest post? Then please read this guide first.

    This article by Visakan Veerasamy originally appeared in English on the Shopify.com blog and has been translated.

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