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So you're thinking of setting up a referral program, and you want to know what the best practices are.
First up, you'll need a referral program. Setting one up is easy, just follow any of our guides on how to set it up in record time (or for any platforms you're using!):
- How to set up your referral program in record time
- How to set up your referral program on Shopify
- How to set up your referral program on WooCommerce
- How to set up your referral program on BigCommerce
One of the fastest ways to understand the best practices of referral marketing is to examine already-successful referral programs to see what they're doing.
On that front, we’ve got you covered.
Head over to our Epic List of 74 Referral Programs to learn from some of the best examples in the business:
The list is now split up by industry vertical, so you can more quickly find an example that’s relevant to you.
Beyond that, you’ll also want…
Best practices for setting up referral incentives
Should you use one-sided or two-sided incentives?
- As a general rule, we recommend using two-sided incentives – they incentivize both the advocate and the referred friend.
What are the best practices when it comes to setting up your payments? Who should you reward? Should you use cash or discounts?
- If your advocates are likely to make repeat purchases, give discounts to encourage them.
- If your product costs more than $100, a flat discount is usually more enticing ($500 off a $2,000 laptop)
- If your product costs less than $100, a percentage discount is usually better ($10 off a $50 t-shirt is better phrased as 20% off)
- If your advocates are unlikely to make repeat purchases, give cash.
- If you’re doing preorders, consider giving cash discounts on the advocates’ existing preorder.
- Remember to focus on your customers’ interests and motivations.
Best practices for promoting your referral program
What are the best ways of increasing your referral rate?
- Invite past customers to join your referral program
- Feature your referral program call-to-action prominently on your website
- Post about your referral program on social media
- Use post-purchase popups to get your customers on-board while they’re still ‘warm’
- Send smart email reminders to your advocates
- Show your referral program to all your visitors using a referral widget
- Teach your customers how to share your referral program
- Invite influencers to join your referral program
We go into more detail in our guide here:
Best practices for writing great emails asking for referrals
There are 6 things you need to do correctly to get the most out of your referral emails:
- Focus on the subject line
- Keep the email simple
- Make your call-to-action impossible to ignore
- Emphasize the motivation for purchase
- Highlight the benefit to Friend AND Advocate
- Include any additional conditions for the referral
Learn More: How To Write Great Emails Asking For Referrals
Best practices for getting your referral messaging right
Your referral messaging should represent your brand's value proposition. How then do you craft a good value proposition? There are no surefire methods, but here's what you potentially need:
- Communicate the concrete results a customer will get from buying or using your products/services
- Say how it’s different or better than competitors
- Avoid hype, superlatives and business jargon
- Read and understood in 5 seconds
Learn More: How To Get Your Referral Messaging Right
Best examples for referral email designs
The design, layout and copy of your referral email is a key component of driving more advocates to join your referral program. Here are some examples you can look at, model from and get inspired to create your own.
Learn More: 13 Examples of Beautiful Referral Email Design
Best examples for friend landing pages
The Friend Landing Page is the page that your Advocates’ friends are taken to once they click on a referral link.
It’s important to get this page right – you want it to entice the friends of your Advocates to click through and then shop at your store.
In particular, you want to…
- Have a strong header image that really sells your brand or product
- Communicate the offer clearly and succinctly
- Make the discount code clearly visible
Here are some examples to get you fired up on creating your own.
Best examples of social sharing messages
One of the main ways that people share referral links is on social media. And lots of people are typically too busy to take the trouble of modifying the default messages.
What does this tell you?
You can actually improve your referral rates by choosing a great default sharing message.
Here are some examples you can consider using, or modifying for your own.
Best practices of calculating and improve the ROI of your referral program
At the most basic level, you should think in terms of cost vs revenue.
How much are you spending on your referral program (cost of incentives + cost of running the program), and how much revenue are you getting in sales?
If your referral revenue exceeds your customer acquisition cost, then you’re definitely getting a positive ROI on your referral program. This should be the rule-of-thumb heuristic to use to decide whether to keep running your referral program or not.