How to Set Up a Referral Program for Your Ecommerce Store in 6 Steps
Setting up a referral program should not be hard. Here's how you can do it in six steps and start getting referrals!
Affiliate marketing is often not a brand's largest revenue source, yet: it often provides the highest ROI.
IAB Australia did a survey and 84% of marketers rated affiliate marketing ROI as 7 out of 10 higher than other marketing channels. Major brands often get 5% - 25% of their overall online sales from affiliate marketing.
To get similar results, WordPress store owners can use affiliate marketing plugins. To assist you with selecting the right plugin, we have reviewed the top options below.
Before looking at the best tools, let’s clarify what is a WordPress affiliate marketing plugin.
A WordPress affiliate marketing plugin is a tool designed to help merchants start, manage, and optimize their affiliate marketing programs.
These plugins include features such as ready-to-use templates, automatic tracking, and A/B testing to simplify affiliate marketing. One example of such a tool is ReferralCandy, which can be used to create affiliate and referral programs.
The main reasons why you should invest in an affiliate plugin include:
So, what features should an affiliate plugin have?
This is what we recommend:
For each plugin, we will break down the key features, customer reviews, who it is suitable for, and the pros and cons.
With this information, you can better understand the differences of each plugin.
With ReferralCandy, you can create, manage, and automate your affiliate and referral programs for WooCommerce stores.
ReferralCandy's key features include all-in-one affiliate and referral management, post-purchase popups and emails, automated customer rewards, and fraud detection.
You can use ReferralCandy's editor to design affiliate and referral programs to match your brand colors. ReferralCandy allows you to track and analyze the performance of your affiliate and referral programs.
ReferralCandy is available in the WordPress Plugin Directory as well as in the Shopify App Store. It also offers various other third-party integrations, such as with Mailchimp, Klaviyo, Google Analytics, and ReCharge.
With Pretty Links, you can turn long and unclean URLs into short, cloaked affiliate links using your own domain name. The links can be added to any page you want, including emails, websites, social media, and more.
Here is an example of how the cloaked links look with Pretty Links:
Pretty Links creates the cloaked link automatically, but you can create your own custom slug if you wish.
In addition to link cloaking, Pretty Links provides tracking and analytics features. You can see where the link traffic comes from, the browser, OS, and the host. You can also create reports showing the number of clicks per day in a configurable chart.
Pretty Links is available in the WordPress Plugin Directory. It can be used on other ecommerce platforms, but it does not offer specific apps for them.
ThirstyAffiliates is a free affiliate plugin solution for managing affiliate links and cloaking them into shorter and cleaner formats. While the platform also has a paid plan, the free version suits ecommerce brands and bloggers who want simple features for utilizing cloaked affiliate links.
ThirstyAffiliates comes with a dashboard for managing existing affiliate links and creating new ones. You can also add images and banners to the affiliate links. ThirstyAffiliates has reporting and analytics, where you can see how many clicks your links have gotten over time.
As for integrations, ThirstyAffiliates can be integrated with MonsterInsights to push data into Google Analytics.
SliceWP aims to be an all-in-one plugin for managing your affiliate program on a WordPress site. Its features include an affiliate dashboard for managing affiliate signups, real-time tracking of clicks, referrals, and conversions, and scheduled automatic payouts.
SliceWP makes the setup process easy, and you can create and customize custom pages for affiliates to sign up on. The affiliates' commissions can be set at a percentage or at a fixed rate.
Many of SliceWP's features are available as add-ons, which you have to pay extra for. The add-ons include third-party integrations, PayPal payouts, custom affiliate slugs, affiliate landing pages, and recurring and lifetime commissions. The extra cost is a slight disadvantage compared to competitors like ReferralCandy, which offers many of the features as part of its standard plan.
MonsterInsights makes it easy to integrate and manage Google Analytics on your WordPress site. While it isn't designed exclusively for affiliate programs, it is a great way to track affiliate link performance.
The integration process to Google Analytics is simple. After done, you can track the performance of your affiliate links, as well as your customers' age, device, gender, and other information that can help improve your affiliate performance. You can also see more conversational statistics, such as top revenue sources, conversion rate, average order value, and top referrals.
All data is available in the reports MonsterInsights provides you, including ecommerce reports, audience reports, publisher reports, content reports, landing page reports, and more. MonsterInsights has a Pro version available, but the free version gives you access to many features.
Coupon Affiliates is unique because it focuses on coupon-based affiliate marketing, which allows store owners to assign unique coupon codes to affiliates.
To manage the coupons, you get access to an admin dashboard. Affiliate users can track and submit payout requests through the available affiliate dashboard. From the same page, affiliates can generate referral URLs, set up link tracking, create referral campaigns, do link cloaking, and share links on social media.
Coupon Affiliates offers different reports and analytics to track affiliate coupon performance.
BetterLinks is a URL-shortening solution for WordPress sites. With it, you can create, shorten, and track the performance of any URL, including affiliate link URLs. The platform isn't made specifically for affiliate links, but it works great for them as well.
You can split-test different links with dynamic redirects, create 301, 302, and 307 redirects, check broken links, and track your performance. BetterLinks provides reports on the click-through rate, top referral links, top social media links, and more.
If you want more advanced features, BetterLinks has a Pro version that includes more advanced analytics, Google Analytics integration, Facebook Pixel tracking, the broken link checker, and the ability to control and manage user roles.
Skimlinks is a content-to-commerce platform designed to help merchants monetize their content through affiliate marketing. It converts regular product links into affiliate links, allowing content creators to earn commissions on sales generated through their content.
Its key features include automatic product link converter, reporting and analytics, content monetization tools, geotargeting, and integrations with third-party software.
Skimlinks is unique in that it is free to use, but they charge a percentage of the sales you make. This can be a disadvantage for brands with high sales volumes, but it can also be advantageous for merchants with low sales volumes.
Post Affiliate Pro helps WordPress store owners create, manage, and optimize affiliate programs. It’s key features include an affiliate dashboard for management and analytics, as well as fraud protection.
One unique feature of Post Affiliate Pro is the marketing materials it provides to its new users. These include ready-to-use banners, discount coupons, and smartlinks, which can be used on your website and ads.
Post Affiliate Pro includes automation features such as email sending, social media posting, and automated commissions. For analytics, you can see impressions, click-through rates, conversions, sales, and more.
Easy Affiliate’s key features include affiliate and commission management, tracking and reporting, fraud protection, custom link generation, and affiliate payout management.
One unique feature of Easy Affiliate is the ability to create an affiliate application process. It requires visitors to apply for your affiliate program before they are eligible to join.
With Goaffpro, ecommerce merchants can launch and manage their affiliate programs. The platform offers a custom-branded affiliate portal, several commission options, affiliate tracking, and link sharing.
Goaffpro’s analytics provide data such as clicks, sales, new signups, net and gross revenue, and cost per conversion. The data is quite extensive and one of Goaffpro's standout features.
Goaffpro not only offers affiliate marketing tools for WordPress stores, but it is also a popular Shopify app. From the affiliate dashboard, affiliates can share their links and coupons on different social media platforms.
YITH WooCommerce Affiliates lets you quickly create an affiliate registration page and start earning money. You can create a custom registration form and decide which one of your customers get accepted to the program.
The tool comes with an affiliate table, where brands as well as affiliates can track their commissions, earnings, and conversion rates.
For more capabilities, YITH WooCommerce Affiliates integrates with third-party tools.
AffiliateWP offers an easy integration with WooCommerce and Elementor stores for running affiliate programs. It has an affiliate dashboard for affiliates, fraud detection, and one click PayPal and Stripe payouts.
WP Affiliate Manager integrates with WooCommerce and various shopping carts and helps you manage, track, and pay affiliates. The tool comes with email templates, customizable affiliate registration, and basic analytics.
Ultimate Affiliate Pro is an affiliate program plugin for WordPress and WooCommerce store owners. The tool offers different commission types, such as product rates, membership-tailored rates, and recurring referral rates.
Ultimate Affiliate Pro integrates with different ecommerce, form, and membership platforms for more functionality.
As the name suggests, Easy Affiliate Links offers a simple tool for managing affiliate links. Whether you’re creating a landing page or a blog article, you can add the affiliate links easily to your text.
Easy Affiliate Links is compatible with the WordPress Classic Editor and Gutenberg Block Editor.
A competitor to EasyAzon, AAWP, lets you create and manage Amazon affiliate links For example, if you run a blog and recommend products to your readers, you can lead them to Amazon through your affiliate links.
AAWP comes with templates, including boxes, lists, and tables. It works on all WordPress themes.
AdSanity lets you display ads anywhere on your WordPress site. To use it, you need to join an ad network and request a code snippet that the ad network will provide.
You can then add the code snippet to AdSanity and display the ad on your website through ready-made blocks, widgets, and shortcodes.
Similar to AAWP, EasyAzon lets WordPress users create Amazon affiliate links. With it, you can control affiliate links through site defaults or individually. The links can be set up to open in a new tab, have a no-follow attribute applied, and be cloaked for SEO purposes.
Affiliate Coupons is a tool for managing coupons on your WordPress site. Each coupon has a title, description, link, and validity date. Affiliates can share these with their audience, and when someone makes a purchase, both parties benefit.
Affiliate Coupons works for all WordPress themes. There are templates you can use to speed up the creation of your affiliate program.
Solid Affiliate lets WooCommerce store owners launch affiliate and referral programs. It includes an affiliate program where affiliates can manage referrals and payments.
One of Solid Affiliate's cool features is its marketing assets, such as banner ads and advertising videos. These can be shared with affiliates, who can use the materials to promote your products.
Referral emails can also be sent within Solid Affiliate.
If you’re unsure what plugin to choose, ask yourself these questions:
ReferralCandy offers all of the above and enables you to easily set up your first affiliate program, as well as send post-purchase pop-ups, emails, and pages to enroll new customers.
If you want to see how other ReferralCandy customers have done, like Wing Assistant, who got a 27.9x ROI on its affiliate program, check out our case studies.
Ever walked past a restaurant with a long line and thought to yourself: “The food must be good if people are waiting that long to get in.”
You assume that the food must be well worth the long waiting times. You might even make a mental note to try out the restaurant, or at least look it up when you have the time.
That’s social proof in action.
It’s a psychological phenomenon where as humans, we form opinions and perceptions based on the actions of other people. (And that’s despite how individual and original we like to claim we are.)
In this guide, we walk you through what social proof is, how to use it, and why it’s important to your sales and marketing strategy. We’ll also share plenty of real-life social proof examples to show how it can add fuel to your marketing engine.
Social proof is the psychological phenomenon that happens when people assume that the actions of others are correct depending on the frequency of those actions. We tend to think they reflect the best behavior for a given situation.
There’s a social psychology component of normative social influence: We tend to conform to big group behavior for social acceptance—even if what they do doesn’t line up with what we think is correct behavior.
You can imagine how much more powerful this effect becomes when you add social media platforms to the mix—a place where almost everything is public and accessible with a few clicks.
Social scientist Robert Cialdini explains:
“In our research, we’ve found that in more collectivist, communal cultures, certain kinds of persuasive appeals are more successful. Social proof is very powerful. If a lot of your peers are doing something, that’s a more powerful impetus for you than for people in more individualistic cultures, where one looks inside the self and doesn’t use the group as the standard for deciding.”
Take Apple as a well-known example. When the brand releases a new product, you’re bound to see news coverage of people waiting in long lines, or even better, pitching tents outside stores to be the first to get their hands on the newest release.
If you didn’t know anything about the Apple iPhone and you saw that, it would be easy to think there must be something amazing about their products that you’re missing out on. At the very least, watching crowds of people go to great lengths to get their hands on new Apple releases captures your interest.
It’s scenarios like these that show the power social proof can have. As you notice other people engaging with a popular product, it instantly becomes more attractive.
The beauty of this, especially for marketers, is that with social proof, you don’t need a sales agent to try to convince you of how “good” a product is.
Instead, marketers can lean on an online marketing approach that capitalizes on consumers seeing positive opinions and making assumptions. In essence, that’s how social proof marketing works.
There’s no doubt that social proof works across various points of the customer journey. There’s data to back it up.
Scanning sites like TrustPilot and Yelp before buying something new? You’re not the only one.
Data shows that nine out of every 10 consumers read customer reviews before making a purchase. Not only that, a whopping 79% of consumers say they trust online reviews just as much as they trust a friend’s recommendation. Friend and family recommendations are also how 40% of consumers find new brands to follow.
Customer testimonials form an important part of the sales funnel. Reviews about a specific product can increase conversion rates by 270%. They’re what helped My Supplement Store increase conversions on product pages, as Brian Anderson explains:
“In order to help provide more trust with visitors to our site, we offer social proof on all our product pages. Whenever anyone visits a product page with at least one customer review, they see a small slider near the footer of their screen with the name of the reviewer and his review of the product.
This helps the customer to trust not only in the product, but our company. Since implementing this strategy our conversion rates have increased from 2.4% to 2.8% on our product pages with customer reviews.”
It’s not just product pages you should use to collect customer reviews, though. Potential shoppers look to review sites like TrustPilot, Yelp, and Google My Business to form decisions before purchasing--hopping from your site to those aggregators multiple times before converting.
If a peer came to you raving about how a new skincare product cured their acne, you’d be eager to try it, right?
You’re not the only one. Some 83% of consumers say recommendations from friends and family make them more likely to make a purchase—meaning a wave of new customers could be on the horizon if you’re encouraging happy customers to tell their friends.
Ecommerce brands can use this peer social proof on all touchpoints throughout a website. Everything from the homepage to a checkout page can nudge customers towards making the next step.
You can’t forget about the impact user-generated content can have on sales. Some 79% of people say this type of content highly impacts their purchasing decisions. It makes sense considering that 85% of users find UGC to be more persuasive than standard photos or videos.
That’s what jewelry brand Faruzo did by sending PR packages to TikTok and YouTube influencers for exposure through UGC. Aviad Faruzon, its founder, explains:
“One of my most effective social proof strategies was to send PR packages to renowned influencers on Instagram and TikTok. Nowadays, social media influencers are an extremely cost-effective yet beneficial way to increase sales because they have a wide number of followers.
This was a huge success because the influencers wore our jewelry pieces and reviewed them positively—which got all their followers onto my website! The traffic increased by about 15% through her post!”
How about celebrity endorsements? Well, the Nike Air Jordans, launched in 1984, has been one of the most successful celebrity endorsement campaigns in history. Jordan sales increased by 31% even throughout the pandemic.
It’s pretty safe to say betting on Michael Jordan to sell sneakers is one of the best financial decisions Nike has ever made.
This type of social proof usually happens outside of a brand’s eCommerce website. Its social media profile, press coverage, and sponsored influencer content play a big role in using a celebrity’s endorsement to build trust.
“We use social proof by posting lifestyle images with a mix of influencer and customer-created content on our Instagram page. Specifically, it's our goal to build social proof by showcasing every day and aspirational individuals using our products. This builds instant validation and becomes even easier for first-time customers to trust us.”
Jameson Rodgers, co-founder of CBDfx
There are countless real-life examples of how valuable the many forms of social proof can be to a business. Knowing which social proof is best suited for your business might take some experimentation at first. But, as you’ve seen, the payoff can be massive.
Below are the six types of social proof you should be using, backed up with examples to show how (and why) they work.
Trying to make a buying decision on something you’re unfamiliar with? Chances are you’ll trust the opinion of an expert more than anyone else. It’s easy to think that since they’re the expert, they probably know better than you.
Manuka Honey wants you to know that Dr. Fred Pescatore likes and trusts the brand enough to put his name to it. With this social proof example, the well-known and respected expert takes the time to write a guest post authored with his name. It also includes a tip to help you strengthen your immune system—using products from the brand he’s endorsing.
Look to the toothpaste world for examples of social proof in action. It’s a competitive industry where the contents of the bottle are largely the same, no matter the packaging. Expert social proof is what helps toothpaste brands get their products off the shelves.
As you navigate to Sensodyne’s About page, you immediately see the “doctor’s recommended brand” stamp. There’s also a short paragraph on Sensodyne being the #1 recommended toothpaste by dentists.
It even includes the study (albeit in smaller text) that backs up their claims. In other words, they’ve managed to crowdsource the opinion of over 200 experts into one statistic. Genius.
Hiya Health is an ecommerce brand selling children’s vitamins. The kids’ health space is a tough one to break into, with parents naturally wanting to confirm that the supplements they’re giving their children are safe.
The brand uses expert social proof on its website to do this, as its co-founder Darren Litt explains:
“When a consumer is at the conversion stage — where they are actively clicking through your website — you want to give them more reasons to say yes to a purchase, and credible yet relevant endorsements do bring down defenses.
One of our best social proof quotes comes from Kelly LeVeque as she is both a nutrition expert influencer and a mom (we have a picture of her with her son). This endorsement intersects a nutritionist who would recommend our product and a parent who would and does provide it to her child.”
Plenty of brands use celebrity endorsement to increase sales, especially when they want to appeal to a specific target audience. It’s the backbone of influencer marketing as a means for attention.
You likely know who Leighton Meester is before you even know what Christy Dawn is. That’s especially true if you’re Christy Dawn’s target audience: Younger women who've seen Meester star in Gossip Girl as one of the lead characters.
As an influencer marketing move, getting Leighton Meester to collaborate on a collection makes a lot of sense from a sales generation standpoint. The Gossip Girl star was known for her trendy outfits. A fashion retailer collaborating with her makes those “OMG I want those clothes!” more realistic.
Athleisure is in. And so is Kendall Jenner—one of the most influential social media and reality stars of this decade. Pair the two together and you make for a powerful influencer marketing campaign for Alo Yoga.
If you’re a Kendall Jenner fan, you can easily navigate to Alo Yoga’s page to “shop the look.” It includes an actual image of Kendall Jenner wearing their products. If you see a fashion supermodel wearing clothes that don’t cost the earth, there’s a good chance you’ll click “add to basket”.
Who better to sell you gym clothes than athletes themselves? For Gymshark’s ambassador program, yet another influencer marketing strategy, the brand enlists the help of several well-known public figures to show off and speak about the product.
Especially if you’re focusing on Instagram, Gymshark proves this can be an effective way to increase brand awareness—and see a significant increase in sales if executed correctly.
These days, brands are taking social proof to a completely new level. It isn’t only about celebrity endorsements. Now, with the help of social media, you’re making your customers the star expert.
Customer social proof ads are increasingly becoming the go-to strategy for many consumer brands, and SCULPT Activewear doesn’t stay behind.
The brand shows how to use customer social proof in its Facebook ad campaigns. Once you look up its Facebook ad history, you see they’re crafted with user-generated images and videos. “8,000+ happy customers'' gives you confidence in trying it for the first time. If other people like their products, surely you will.
Just like you can sell clothing, Partake Foods uses social proof to sell cookies. The raving product reviews make you want to try them, even after just reading two or three. (Especially “You can’t just eat one” with seven upvotes by other fans of the cookies.)
What’s interesting about this example, though, is that it uses social proof directly on the product page. It goes to show that visitors still need one final nudge before converting—even if they arrived on the site off the back of a social proof marketing campaign in the first place.
Similarly, Tofino Soap Company shares positive reviews from happy users on its product page. There are over 22 five-star reviews as proof of how good its soap is.
Previous customers can even add images of their soap purchases as an added social proof feature that doesn’t only include words. Think of it as a built-in Yelp feature that helps influence customer decision-making.
Warby Parker is one of the fastest-growing DTC brands of the century. Part of its catapult to a $3 billion valuation? Strategically placing a revolving rolodex of reviews right beside its “Try before you buy” call-to-action.
Potential customers also have the option to “see more reviews” if they aren’t quite convinced about its line of eyewear (but want to be).
Looking up a brand on Trustpilot, a consumer review site, makes for a great example of “wisdom of the crowds” social proof in action. As you scroll down, you can see what “the crowd” is saying about the brand in question.
eCommerce retailer FramesDirect has a whopping 25k reviews on their TrustPilot page. And most of them are positive—easing any friction someone has about buying through their website.
If it’s a bestseller, it must be because it’s a standout product, right? That’s the logic Flourist plays on with its ecommerce website. You’ll see a category page that lists the bakery “best sellers”—a collection of items that makes you think if other people love it, you will too.
Logically, the better star ratings a product has, the better it is.
Kirrin Finch plays on that notion by listing star reviews under each of its products. You’re able to see how many reviews make up the total. And, you can click on each review to read exactly what customers have to say about that specific product. Talk about making purchase decisions easier.
The fear of missing out (FOMO) is a psychological phenomenon that causes 60% of people to make reactive purchases—usually within 24 hours.
Ecommerce brands can use FOMO as a type of social proof. Some 92% of people will trust a recommendation from a peer. Here’s how to induce the feeling of FOMO with evidence that other people have made the decision your new customer is about to make.
In The Style uses group conformity psychology by adding “selling fast” and “over 100 sold!” stickers on their product images. It entices customers to buy popular products because their peers have—yet another effective way to use peer social proof as an inexpensive selling strategy.
Surely makes sure you know people all over the country are buying their beverage with a pop-up that appears every time someone buys their product. Knowing someone else has made the decision you’re about to make is much more comfortable.
It’s not just experts that help ecommerce businesses build social proof. Certified products, or products that have been “featured in” high-trust and high-visibility places (like Vogue, CNN, or The New York Times), can gain from a boost in trust.
Not convinced? Data shows that 55% of consumers didn’t make a purchase because the website didn’t have a trust badge. Another 58% clicked the exit button because they didn’t recognize a logo.
Certifications are a form of social proof that drives sales. Let’s look at a few examples.
Well Before does a great job of using “featured in” to gain credibility and trust for its products. In this case, it recruited the names of SFGate, Yahoo Finance, Newsweek, and the New York Post to help them make sales. Its product description also explains that the face mask is “FFP2 certified”.
Granted, if you’re going to use this social proof strategy to increase trust, you need to make sure to be featured in those high-profile publications first. Fake social proof is much worse than none at all.
Fragrance brand Bailly has adopted a similar certification-style social proof strategy. It enlists the help of Elle, Flare, Into The Gloss, and Refinery29 to seem credible and worthy of purchase through its “as seen on” banner.
As you scroll down the mention of high-profile publications helps the new brand build credibility and trust. That’s true even if it's your first time coming across their website with no prior knowledge about the ecommerce business.
Tentree is a Certified B Corp, meaning it meets the highest standards of social and environmental performance. The eCommerce brand uses that certification in its Facebook ads.
The retailer quotes one of its happy customers by using their quote in the ad creative. As you scroll through your feed, phrases like ”wonderful company” and “minimising your environmental impact” stand out.
The five-star reviews are just an added bonus in its social proof-driven advertising strategy.
Satya is a Certified Aboriginal Business based in Canada. This stamp of approval, albeit at the bottom of its website, lets people know that it’s a business worth supporting. This certification also implies that they have to go through a vetting process to be able to get such a certification, which increases transparency and trust.
It’s especially important for sales considering almost one in three consumers have stopped purchasing from brands because of ethical or sustainability-related concerns.
Certified gluten-free, Whole30 approved, glyphosate residue-free? Kettle & Fire takes its certification approach seriously. With stamps of approvals like these, you instantly create a new level of trust with potential customers who are highly health-conscious.
Caldera + Lab is a sustainable ecommerce brand through and through. Its co-founder, Jared Pobre, explains, “Our brand grew out of a passion for clean living and a sustainable lifestyle. And our wellness messaging extends throughout our social media with content that invites customers to join us on our journey.”
“Through rigorous testing, we've earned our Certified B Corp, ECO CERT, and MADESAFE eco-certifications. These certifications serve as social proof to help our customers know they can trust our products.”
Referrals are powerful. They’re inherently based on social proof because you’re incentivizing customers to share your product or service with their friends.
As we touched on earlier, a recommendation from a friend is one of the best ways to get introduced to a new pool of customers. Brands know this and use this as part of their social proof strategy. Here are a few brilliant examples.
A Box of Stories, a subscription box service in the UK, harnessed the power of referrals to reach new customers. How? By using word of mouth marketing software with its very first handful of loyal customers.
A Box of Stories knew that its product had the potential for more traction because of how appreciative existing customers were. Once the brand set up a referral system that gave customers and each of their referred friends $4 off their first and second purchase, it led to a referral rate of 7-8% in the very first month. Close to 5,000 customers joined through the referral program. We’d call that a success.
Referrals work great within the apparel industry too. Christy Dawn’s referral program, for example, generated a 26X ROI after starting a “give $30, get $30” campaign. With the use of social proof (a friend referring a friend), it becomes easier to find new customers with lower acquisition costs. The trust needed to make a new sale was already passed through the person recommending it.
Riff Raff & Co sells a comforter-style sleep toy for babies and toddlers that helps them sleep better at night.
They have a unique referral program: Refer five friends and get a free sleep toy. While we usually recommend giving small rewards often, Riff Raff & Co found great success with this because they understood their customers—mothers—well. Through their referral program, they grew into a multi-million dollar business in just a few years. Almost one in every four customers came through a referral.
I always knew from my research when launching that a referral program was going to form a major part of our marketing. With much of our target market being mums, and me being a mum myself, I knew that the best people to promote our product were other mums - they are the ones they really trust.
Emma Kruger, CEO, Riff Raff & Co
There’s no doubt adding social proof to your landing pages, homepage, or even your social media marketing efforts is a powerful way to increase eCommerce sales.
If used correctly, social proof can be a powerful customer generation tool that convinces potential customers to take the next step in their purchasing journey. From review sites, social media, your website, and back again, using social proof at every touchpoint keeps them engaged.
The bottom line? Previous customer reviews, celebrity endorsements, and certifications give potential customers the trust they need to make a confident decision.
Since 2020, Nike has been fighting new competitors that have risen via word-of-mouth marketing, such as HOKA, Allbirds, On, and Brooks.
While Nike certainly invests in ad campaigns to generate word-of-mouth, they may have overlooked some strategies used by smaller competitors. For instance, competitors have used referral programs to boost organic brand awareness. Not implementing these strategies might be one of the major reasons why Nike’s stock price has plummeted this year.
Maybe what Nike needed was a solid customer referral program? To determine if a referral program could save Nike, we will examine the brand's current state, how it would benefit Nike and examples from its competitors.
During 2024, Nike's stock price decreased by 20%, and at its lowest, it fell by 30%.
Plus, if you zoom out even further, the stock price has fallen around 100% from its all-time high, which was in December 2021.
Related to the plummeted stock price, Nike has also been in the news a lot lately. For example, Yahoo reported recently that Nike’s disappointing earnings resulted in a 17.8% single-day stock price drop.
Even according to Statista, Nike sales haven't increased from the previous year, which is unusual.
Nike’s overall revenue increased by 10 percent in prior years but not in 2024. Something is definitely not going well for them.
In our opinion, a well-designed customer referral program could help Nike out of its current bind. Most of Nike's competitors have successful referral programs, so why wouldn't it work for them as well?
Nike doesn’t have its own customer referral program. It does have an affiliate program, but it is not easily accessible for most customers. To get in, you need to apply.
In addition, Nike’s affiliate program doesn't reward both the affiliate and the potential customer, which makes it less appealing. With the current terms, only the affiliate gets a 15% commission for every new purchase.
Most successful referral/affiliate programs, like Puma's, use two-sided incentives. The advocate and customer get a certain percentage off the next purchase. This encourages customers to spread the word about the brand since both parties benefit.
As of now, Nike doesn't have a refer-a-friend program, and they're missing out on a huge opportunity to leverage word-of-mouth marketing.
Many of its main competitors use referral programs and other word-of-mouth marketing to gain an advantage.
Launching a referral program could bring many benefits to Nike, including:
Unlike traditional marketing methods such as paid advertising and email marketing, all the revenue from referral programs is from new customers. Referral programs enable brands to tap into a new market, which consists of existing customers' friends and family.
Even though Nike is already popular and most people know it, referral programs could motivate existing customers to recommend it more to friends and family. In addition, Nielsen’s study found that 88% of consumers trust recommendations from people they know more than any other marketing message, which is ideal in this situation.
The only real cost of starting a referral program is investing in referral program software, such as ReferralCandy. Plus, the global average referral rate is 2.35%, which means that most brands see a positive ROI on their referral programs.
This means that even if the referral program doesn’t turn out to be a success, there isn’t much to lose.
Referral programs increase word-of-mouth marketing by motivating satisfied customers to share their positive experiences. This organic growth can lead to a broader customer base and increased brand awareness.
Next, we’ll show examples from some of the main Nike competitors running successful referral programs. This demonstrates how referral programs are used by other big brands and how Nike could use them as well.
We’ll look into the referral programs and word-of-mouth strategies of On, Brooks, ASICS, Puma, and HOKA.
On is a sportswear company that is relatively new compared to industry giants like Nike. On Running was launched in 2014 and has quickly gained popularity among runners. In 2023, On reported a 46.6% growth rate year over year, which is remarkable.
Some of On’s successes can be attributed to its referral program. On offers, a Give 10%, Get 10% off referral program, in which both advocates and referrals are rewarded. It is one of the simplest referral programs, yet one of the most powerful ones.
Brooks is an American company specializing in running shoes, apparel, and accessories. It is especially known for its high-quality running gear. In 2023, Brooks had a record year, selling 20+ million units and growing revenue by $1.2 billion.
To achieve this, Brooks used various word-of-mouth marketing methods and also has a referral program. The referral program is available to Brooks Run Club members and members earn metres for their activities. The activities include checking in at Brooks events, referring friends to the company, etc.
Brooks’ referral program is unique, but it is something Nike could take inspiration from to increase its sales.
ASICS produces sportswear and is mainly known for its running shoes. In 2022, ASICS saw a record year, with revenue increasing by 14.2%. ASICS was profitable across all categories.
One of ASICS’ ways to grow has been through referral programs, which they pay a lot of attention to. ASICS promises $10 off for the advocate and friend for purchases over $75.
Despite many of the major companies, like Nike, taking a hit to their revenue, Puma increased sales in 2023. Puma’s revenue reached €8.6 billion in 2023, an increase of 6.6%. To increase sales, one of the strategies Puma uses is a referral program.
Puma’s referral program is simple: “Get 20% Off and Give a Friend 20% Off.” For such a well-known brand, Puma's discount is quite significant. Puma recognizes that offering a substantial discount for referrals will pay off in the long run.
HOKA doesn’t have its own referral program, but it does offer an affiliate program. Despite not having a referral program, HOKA uses many word-of-mouth strategies from which Nike could learn.
Hoka has seen 30% year-over-year net sales growth, demonstrating its success. One way HOKA accomplished this was by leveraging endorsements from runners who benefited from their shoes. In addition, Hoka built a strong community of people who naturally spread the word, reducing the need to continuously invest in marketing.
We believe Nike could benefit from a referral program to increase sales through word-of-mouth. Nike already has a strong community, but it doesn't try to encourage existing customers to recommend its products to their friends and family.
Many of Nike’s competitors have simple referral programs, such as "Give 10%, Get 10%", where both the advocate and friend are rewarded.
Our question is: Why couldn't Nike offer something similar and benefit from it?
As the previous examples showed, customer referral programs are a popular method of growing a brand's customer base.
While these brands do not publish their referral programs' profit margins, they certainly benefit from them. In the end, why would anyone keep running a referral program that doesn't work?
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If you want to see what ReferralCandy customers have accomplished, check out our case studies.
For example, BranchBasics used ReferralCandy to set up a referral program and generated over $1.5 million in referral sales. Toki Mats used ReferralCandy to generate an extra $500,000 in revenue through its affiliate program.
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