Word-of-Mouth and Referral Marketing Blog

How To Improve Referral Rates and Get More Sales In 8 Steps

So far, we’ve written about several components you need to configure while setting up your referral program:

But even so, there are many different things you can do to improve your referral rates.

Here are our 8 best tips to supercharge your referral program and get those referrals you deserve:

(Click to jump to the relevant section, or simply scroll down if you prefer)

1. Let as many people know about your referral program as possible: existing / past customers / followers.

Let people know about your referral program

Sounds like common sense, but it’s easy to forget when you’re managing a hundred other things all at once:

Reaching out to as many people as you can is probably the single most important factor that’ll determine the success of your referral program.

The more people that know about your referral program, the more likely you are to get new referral customers and referral sales:

  • Past or existing customers are a great source for referrals since they’ve purchased from you before. If they enjoyed your products, they are more likely to recommend it to their friends.
  • Your followers on social media are definitely interested in your brand, so they might already be telling their friends about you. Still, it’s good to give them another reason to share.

So what can I do?

If you have an active social media presence, then that’s definitely where you should start.

Sending emails to your existing or past customers about your brand and referral program is also a good option.

EXAMPLE: Delivery Hero Australia had a re-engagement program for inactive users which boosted their referrals.

Delivery Hero Australia

Inactive customers shouldn’t be overlooked or forgotten, as they are still a valuable source of referrals. They might have forgotten about you, so sending them a reminder would make you top-of-mind.

Also, they might have friends who are just in need of your products!

2. Allow new visitors who haven’t bought from your store to refer their friends too.

Allow new visitors to refer customers

Visitors who have yet to buy anything from your store might know friends who would be interested.

Moreover, if their friends do end up buying something, the referral reward given to them would encourage them to stop sitting on the fence and buy something too!

So what can I do?

Communicate to your customers that they don’t have to buy something before they can start referring.

Allowing them to sign up before referring is a good way to send them reminder emails later on, and for tracking referrals.

EXAMPLE: True&Co. – Visitors simply enter their email to create an account and they can start sharing!

True&Co referral program

 

By simply entering your email and signing up, True&Co. allows visitors to refer their friends without having bought anything.

As a lingerie company, this allows men to refer their female friends and family.

3. Offer a referral program with two-sided incentives instead of a one-sided incentive.

double-sided

Choosing to have one-sided incentives (usually rewarding just the advocate) or two-sided incentives (rewarding both advocate and friend) can be a tough decision, especially when you’re considering the resources you have.

In a separate post we wrote on this topic, we found that:

  • Incentives work – people are more likely to do something when motivated by an incentive.
  • It depends on the relationship between advocate and friend – if you expect the advocate to refer close ties, then rewarding the friend or both parties are good options. If advocates are likely to refer acquaintances, then rewarding the advocate will do.

So what can I do?

In general, giving the referred friend an incentive is a good motivator to get them to check out your store to see if there’s anything they’d want.

Another interesting insight we found was: in terms of customer lifetime value, referred friends are more likely to make repeat purchases!

EXAMPLE: You Need A Budget (YNAB) awards both advocate and friends with $6 (10% of product price) for a successful referral.

You Need A Budget YNAB Referral Page

4. Consider increasing the Friend Offer to be equal or more than the Referral Reward incentive.

friend-advocate

You want your incentive to be compelling given the average spend of a customer on your website.

The more you can make the referred friend feel like he’s getting a good incentive through the referral, the more likely he’ll end up buying something.

Giving a bigger friend offer also gives the friend the impression that the advocate is doing so in the friend’s best interests, since the advocate himself doesn’t gain as much. It also gives the advocate social credit, since he’s doing his friend a bigger favor.

So what can I do?

In our experience, we’ve found that around 10% or more of that figure works best, so take that into account when deciding how much to offer.

Just remember: the more the friend offer is, the more he’ll be likely to make a purchase, and the more altruistic it’ll make the advocate feel!

EXAMPLE: Dorco rewards advocates with 5% of their friend’s purchase, while they get to enjoy a 20% discount!

Dorco referral program

5. Always feature your referral program prominently on your website or social media platforms.

Always feature referral program prominently

Ideally you should tell every visitor to your website about your referral program as not everyone who visits the site has bought from you previously or is connected to you via social media and may not know about your referral program.

Displaying this link prominently will allow new signups to your referral program directly and people can now spread the word about your store even if they haven’t bought from you before (they might know friends who would be interested!)

So what can I do?

Ensure that your referral program is communicated clearly on your homepage, and if possible, on social media platforms too.

Grab you visitors attention with an outstanding featured image or a powerful headline. Make sure it is placed somewhere you know everyone will see.

EXAMPLE: Greats displays their referral program on every page, including their ‘About’ page.

greats-referral-on-landing-page

 

6. Communicating the Friend Offer more clearly to Participants AND their Referred Friends.

Sometimes referral programs are communicated in a confusing way such that the referred friends don’t know what they’re getting out of it.

If they aren’t sure what they’ll stand to gain, why would then bother checking you out?

So what can I do?

Whenever you display your referral program, make sure the friend offer is clearly shown.

This is especially important for notifications sent to the referred friends.

EXAMPLE: The Clymb – Their referral program is present in emails to advocates, referred friends and the company newsletter.

Combined referral button screenshot

7. Keep your referral program top-of-mind by checking in with them once they have tried out your products, and sending frequent email reminders.

post-regularly-to-social-media

You want to keep your referral program top of mind for participants and build on the positive momentum especially in the first few weeks when the recency of the purchase is still fresh and when they are most actively using the product.

You never know when a friend might ask a participant for a recommendation for a similar product. Make sure that you’re the first place that the participant thinks of whenever that happens!

So what can I do?

Look at your product, and find out the average time your customers take to try out your product.

Also take into account if your product is a one-time purchase, or one that needs to be replaced frequently.

e.g. Dorco sends monthly email reminders about their referral program.

Dorco homepage

Dorco sells shavers, so it makes sense for them to send email reminders on a monthly basis.

A product that needs frequent replacing, like shavers, would benefit from frequent email reminders.

However, long term purchases like mattresses would mean that your customers won’t be on the lookout for a new product anytime soon. Perhaps a reminder once every few months would suffice to keep your brand top-of-mind for them to refer their friends when the opportunity comes.

8. Communicate the conditions of your Referral Reward clearly

You should always communicate any reward conditions clearly upfront so that your participants aren’t surprised at the last minute and left with a bad taste in their mouth.

So what can I do?

Not all customers understand the specific terms used in referral programs, so avoid unnecessary confusion my explaining those terms clearly.

Listing them out in referral emails, or on a page on your website are both good options for them to find out more.

e.g. Dappertime – Referral program’s terms & conditions are clearly listed out on their main referral page.

Dappertime referral program details terms and conditions ReferralCandy

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Read Next: How To Set Up Your Referral Program’s Incentives (With 12+ Examples!)

Samuel Hum

As a finalist in Esquire's Best Dressed Real Man contest, Samuel is ReferralCandy's fashion ecommerce expert and resident sartorialist. He is obsessed with human behavior and social psychology.

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