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One of the most common questions we get is, “How do I get more referrals?”
I went to ask the people who have all the secrets to generating referrals — our Customer Success Managers!
They oversee hundreds of merchant accounts each to help them get better results from their referral programs. To understand the state of merchants' referral programs and to find ways to optimize them, our Customer Success Managers go through a detailed checklist that they have refined over the years.
Ready to learn more? Let's get started on the checklist!
As usual, if you have any questions, feel free to ask us!
Note: If you haven't yet launched your own ecommerce referral program, you can do that easily with ReferralCandy! If you use Shopify, ReferralCandy is also available on the Shopify App Store.
Here is the 11-step client referral checklist you can follow:
We will next go through the 11-step process in more detail.
As a first step, check the fundamental status of your referral program.
This might sound a little silly, but to get more referrals, you have to ensure your customer referral program is actually up and running.
You can see the status on your ReferralCandy dashboard.
Have you set your rewards and checked that they are valid? If you are using Shopify or BigCommerce, ReferralCandy will automatically create coupon codes for your referral program. For other platforms, you will need to create the coupon codes in your store platform and upload them to ReferralCandy.
If you are using integrations, are they working fine? For example, if you are using ReCharge for subscriptions, you would want to check that ReCharge is connected to your ReferralCandy account and you have the right settings in both ReCharge and ReferralCandy. You can refer to our help articles on integrations if you need any help.
Once you know your referral program is up and running smoothly, let's assess your referral results.
Note: When analyzing your referral program's performance, remember that all referral marketing revenue is new revenue as it comes from referred customers. This is different from other marketing methods, such as email marketing, which takes revenue from existing clients.
Therefore, calculating the return on investment is also different. We recommend you follow the next steps to calculate the return on investment on your customer referrals program!
To start, compare your referral rate with the industry referral rate, which you can see on your ReferralCandy dashboard. (Do remember to set your store industry under “Store Settings” to get the specific referral rate for your industry.)
ReferralCandy calculates your referral rate by dividing the number of referral transactions by the total number of transactions in your store over the past 30 days. In other words, the percentage of your sales that are from business referrals.
On your dashboard, you can see the number of referral sales, the value of referral sales, and the trend over the last 30 days.
There are several ways to make use of this data. You could compare your referral sales to your targets. Or you could compare your referral sales with the previous month. If you're selling to smaller businesses, aligning your approach with effective SMB sales strategies can help improve consistency and growth. You can also check whether your referral sales are growing steadily or showing signs of decline.
A simple method is to divide your referral sales by your ReferralCandy subscription fee. For example, $2,000 of referrals divided by a $134 subscription fee is a 15-times return on investment.
For every $1 spent on ReferralCandy, you get about $15 back. (How does this compare to the costs and returns of your ads and other marketing channels?)
That said, this simplified calculation does not consider intangible benefits, such as more engaged customers and greater reach, and costs, such as cost of setup and maintenance.
At this point, how are you feeling about the performance of your referral program? If you want to get more referrals, read on for some ideas!
A key success factor of your referral program is the number of advocates who are recommending their friends. So you want as many people to know about your referral program as possible to get more client referrals.
We recommend merchants highlight their referral program on their homepage.
For example, Bees & Trees link to their customer referral program from their home page:
Other merchants choose to highlight their customer referral programs on their carousel images or in their footer, as Vinyl, Me Please does.
This will remind already loyal customers of your referral program and encourage new visitors to sign up for your it.
Your advocate reward and friend offer has to be attractive enough for your customers to refer their friends. The key is to align them to your customers' motivation—what do they want from buying from you?
Here are a few rules of thumb that our Customer Success Managers use:
For your advocate reward:
For your friend offer:
If you do not want to offer discounts or cash rewards, you can also be creative about your rewards. For example, ThreadBeast, a men's streetwear brand, gives its advocates a free package of streetwear for referring their friends.
Your post-purchase referral email is the primary way that customers learn about your referral program. Also, people most likely cannot remember their referral link. Having this email in their inbox gives them something to refer to.
If you are worried about sending your customers too many emails, you can grab the link to your referral program from your dashboard and include it in your usual emails to your customers.
Also, if you need help with designing your post-purchase emails, you can take inspiration from our email design examples article.
Our Customer Success Managers recommend sending the post-purchase referral email immediately after a customer's purchase.
We see higher engagement with referral emails if it was sent immediately after purchase rather than a couple of days later. This is likely because customers are already looking out for the confirmation email so they are more likely to interact with the referral email.
In ReferralCandy, you can customize when the post-purchase referral email is sent.
You should also experiment with other timings. For example, Riff Raff and Co sends their post-purchase emails when their customers receive the products and follows up again eight weeks later.
Reminding your customers about your referral program is a good way to keep it top of mind. ReferralCandy can automatically send regular reminder emails for you. You can set how often to send reminder emails and when to stop sending them.
We personally do not like spammy or aggressive emails. Thankfully, reminder emails are programmed to space out if the customer is not opening them. And we will eventually stop sending the customer your reminder email altogether. (But if the customer is opening the reminder emails, they likely would not mind receiving them.)
All emails have an unsubscribe button at the bottom so that your customers can opt-out at any point in time.
You can edit your reminder emails by going to Referral Program > Emails & Pages > Edit (your theme) > Content > Reminder Email > Edit.
Once you set up ReferralCandy, new customers will be invited to your referral program, such as via your post-purchase email. But you might also want to let your current customers know about your referral program.
Satisfied customers who have supported you in your early days or who have bought a few times from you are very likely to be strong advocates for your brand.
In ReferralCandy, you can upload a list of your customers and email them an invitation to your referral program. (You can also import your list from Mailchimp if you are using either for your email marketing.)
If you have just launched your referral program, your current customers are a great source of initial business referrals.
You can see your email open rate right on your dashboard.
According to Omnisend, the average open rate for all industries is about 21%.
If your email open rate is lower than your industry's average, we would recommend you experiment with different subject lines. Our Customer Success Managers usually recommend you highlight the benefit to both advocates and friends.
Here are some subject line variations you could try:
You can calculate your email click rate by dividing the number of referral link clicks by the number of referral email views.
We generally see much higher click rates than Mailchimp's benchmarks. This might be because the referral reward makes people more likely to click. Our Customer Success Managers usually aim to get click rates to more than 50%.
Here are some things to consider when improving your email content:
We also have a guide on how to write referral emails, which includes referral email design examples.
Marketing is all about being where your customers are and adding value to their lives.
If you have an active presence on social media and your audience is engaging with your posts, it might be great to let them know about your referral program there. On ReferralCandy, there's an option to customize your social media messages so that it fits each social media platform you intend to share on.
Or if you also have a retail store, you could tell your customers about your referral program verbally or with a small leaflet, asking them to sign up on your website.
No worries! Our Customer Success Managers are eager to help.
P.S. If you found this article helpful, you might like our newsletter. :)
If you're looking for more detailed articles on improving your existing business referral program, here are some insightful resources:
The initial version of this article was written by Visakan Veerasamy, ReferralCandy's former blog editor (2013–2018).
Visa is ReferralCandy's former Blog Editor [2013–2018]. He also co-founded Statement.sg, a fashion ecommerce label selling witty t-shirts. He's mildly Internet-famous for his elaborate Twitter threads. He hopes to enjoy a glass of scotch onboard a commercial space flight someday.
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