Let’s cut right to the chase.
You’re convinced that a word-of-mouth recommendation from a friend is more powerful than any other form of advertising.
You already know that most satisfied customers SAY they’re willing to make referrals, but often forget or fail to do so.
And you recognize that customer referral programs are one of the most effective ways to encourage customers to refer their friends.
You’re sold. You want to run a referral program for your ecommerce store.
What do you need to do in order to get one up and running?
Before you setup a referral program – make sure that it’s worth the trouble
First you need to make sure that your product is something that’s actually worth referring.
- Check your Net Promoter Score (NPS)
- Look for organic referrals happening on social media
- Talk to your customers and ask if they were referred by their friends
- Check if any of your existing customers ask you about your non-existent referral program.
Beyond that, you’ll want to make sure that you have a decent volume of monthly transactions (about 200 transactions a month is pretty healthy).
Alright cool, now you’re going to want to setup a referral program, so that you can make your customers happy, and get more customers.
Okay, you’re in – What’s the bare minimum you’ll need?
First you’ll need a referral program solutions provider, because setting up one yourself is really tedious (and dealing with all the bugs and maintenance is even more so!).
In that case, you’re probably looking at ReferralCandy.
1. Decide on a referral reward for your advocates
This is the reward that you’ll be paying out to your advocates who make the referral.
Generally about 10-20% of the value of your product should be good enough. If customers are likely to make repeat purchases,
You may want to add…
- Minimum purchase amount – referrals only count if referred friends spend at least $X.
- Referral review period – If your store has a return policy, you’ll want to delay the reward payment accordingly.
- Number of valid referred purchases – should only the first referred purchase be eligible for a discount, or more? It’s up to you!
- Single use vs multi-use coupons – This varies depending on your ecommerce platform.
2. Decide on a friend offer
Similarly, 10-20% of the value of your product. This is the discount that your advocates’ friends get. You may want to use the same that you use.
3. Setup your referral email – this is the email that advocates will forward to their friends
This is what the default ReferralCandy referral email template currently looks like:
You can use the ReferralCandy email template editor to customize and modify your referral email to suit your brand style:
The referral email template is setup such that all you need to do is upload your logo. Once you’ve set your referral reward and friend offer, the templating system will automatically populate the email with default copy (as above).
We DO recommend that you take the time to personalize the email. The default subject line is generic – surely you can come up with something more ‘on-brand’ for your store!
4. Setup your ‘friend landing page’ – the destination that referral links point to
This is your chance to market to the friends of your advocates, so it’s important that you take the time to make a good impression.
This is what the default friend landing page looks like:
And here’s what it could look like with some editing:
It’s definitely worth taking the time to prepare images that convey your brand’s value proposition and aesthetic to your future customers.
5. Integration – making sure everything works nicely
Pro-Tip: Here’s our new Shopify setup guide: How To Setup A Referral Program For Shopify
You basically need to…
- Add a tracking code to the purchase completion page on your site, and
- CC your invoice emails to ReferralCandy
This will help ReferralCandy confirm the sources of referred purchases at your store.
For more information, check out our setup guide.
UPDATE: Check out our new WooCommerce setup guide: How To Setup A Referral Program For WooCommerce
Once you’ve setup the above, you’re actually good to go! But wait, there’s more…
Here’s a list of all the other assets in your referral program that you can edit and optimize.
- Reminder email. ReferralCandy allows you to send emails to customers that reminds them about your referral program. You can just send your original referral email at smart intervals, or you can come up with a separate email if you like.
- Pending reward email. “Good news! Somebody just made a purchase using your referral link!”
- Successful reward email. “Good news! You’ve made a successful referral and you’re eligible for a reward!”
- Ineligible reward email. “Sorry – a recent purchased made by someone you referred has been returned/cancelled and no longer counts towards a referral reward.”
- Portal access page. This is an additional way for potential advocates to signup for your referral program. You can link to this on social media, link to it from your site, your blog and so on. portal access page –> advocates sign up here. Example of a referral portal access page:
- Portal sharing page. This is a web equivalent of the referral email.
Once you’ve done all of this, you’re ready to activate your referral campaign!
That’s not enough to guarantee you a great stream of referrals, though. You’ve only just set up your basic referral program – you also need to promote it.
Here’s a follow-up post we’ve written about exactly that: How To Promote Your Referral Program: 5 Steps To Getting More Advocates
Learn more about referral marketing:
- Why Referral Marketing Is Awesome
- An Epic List of Referral Program Examples
- How To Setup Your Referral Program [You are here!]
- How To Promote Your Referral Program
- How To Increase Referral Rates