One of the most common questions we get is “how do I get more referrals?”
I went to ask the people with all the secrets — 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.
This is the checklist!
As usual, if you have any questions, feel free to ask us!
11 questions to ask to get more referrals
Here’s the full checklist for your reference:
- Is your referral program up and running?
- What is the performance of your referral program?
- Is it clear you have a referral program?
- Are your rewards attractive?
- Are you sending post-purchase referral emails?
- When is your post-purchase referral email sent?
- Do you remind your customers about your referral program?
- Do your past customers know about your referral program?
- Is your email open rate higher than 21%?
- Is your email click rate higher than 50%?
- Are you sharing this on social media and other channels?
Alright, let’s dive in.
1. Is your referral program up and running?
Check the basic status of your referral program
This might sound a little silly but let’s make sure we cover all bases! The first thing to do is a basic check of your referral program:
Is your referral program turned on? You can see the status on your ReferralCandy dashboard.
Have you set your rewards and check that they are valid? If you are using Shopify or BIgCommerceOAuth, 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.
2. What is the performance of your referral program?
Assess the performance of your referral program
Once you know your referral program is up and running smoothly, let’s assess your referral results.
1. Compare your referral rate to the benchmark
The easiest way is to 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, what percentage of your sales are referrals.
2. Analyze your referral sales
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. Or you could check that your referral sales are growing steadily or not declining.
3. Calculate your financial return on investment (ROI)
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!
3. Is it clear you have a referral program?
Feature your referral program on your website
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 referrals.
We recommend merchants highlight their referral program on their homepage.
For example, Baronfig has a “Get $10” link at the top of its website.
Other merchants choose to highlight their referral program on their carousel images or in their footer, as Mosaic does.
This will remind existing customers of your referral program and encourage new visitors to sign up for your referral program.
4. Are your rewards attractive?
Offer 10% to 25% of the average order value or of friends’ purchase
Your advocate reward and friend offer have 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:
- If your product is bought regularly, give a discount coupon. Otherwise, cash reward.
- Discount coupon: 10% to 25% of the average order value
- Cash reward: 10% to 25% of friends’ purchase
- If the average order value is more than $100, give a fixed amount discount
- If the average order value is less than $100, give a percentage discount
For your friend offer:
- At least 10% of the average order value
- If the average order value is more than $100, give a fixed discount
- If the average order value is less than $100, give a percentage discount
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.
5. Are you sending post-purchase referral emails?
Send this email to invite your customers to join your referral program
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.
6. When is your post-purchase referral email sent?
Send right after purchase or after delivery
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 toys and follows up again eight weeks later.
7. Do you remind your customers about your referral program?
Automate and space out your reminder emails
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 the reminder emails and when to stop sending them.
I personally do not like spammy or aggressive emails. Thankfully, the 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 Edit Referral Program > Emails & Pages > Edit (your theme) > Content > Reminder Email > Edit.
8. Do your current customers know about your referral program?
Invite your best customers to advocate for your brand
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.
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 referrals.
9. Is your email open rate higher than 21%?
Highlight the referral reward and friend offer in your subject line
You can see your email open rate right on your dashboard.
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 variations you could try:
- Give $10, Get $10
- Give 20%, get 20% for sharing the love
- Get a free package for you and your friend
- 1 candle for you, 1 candle for your friend
- Refer a friend and get $10 each
10. Is your email click rate higher than 50%?
Emphasize “what is in it” for your customers
You can calculate your email click rate by dividing the number of referral link clicks by the number of referral email views.
In this example, it’s a nice 50%!
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:
- Is the content easy to understand?
- Are you using a suitable tone?
- What is the main reason your customers buy from you? (e.g. make a difference in the lives of others, help children learn better, look stylish, be unique, etc.)
- What can the customer get? “What is in it for me?”
- What can the customer give their friends?
- How does the customer earn the reward?
11. Are you sharing this on social media and other channels?
Be where your customers are
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.
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.
Not sure where to start?
No worries! Our Customer Success Managers are eager to help. Feel free to email us at firstname.lastname@example.org or contact your account manager.
P.S. If you found this article helpful, you might like our newsletter. 🙂
The initial version of this article was written by Visakan Veerasamy, ReferralCandy’s former blog editor (2013–2018).