How to Set Up a Referral Program for Your Ecommerce Store in 6 Steps
Setting up a referral program should not be hard. Here's how you can do it in six steps and start getting referrals!
Since you are researching how to set up a referral program, you likely know what a referral program is and are convinced of the benefits of having a referral program.
(If not, here's why referral marketing is awesome.)
Let's skip all that and get to the fun stuff: setting up a referral program for your ecommerce store so that you can start getting referrals.
Just like any other marketing activity, setting up a referral program might seem intimidating at first.
Nevertheless, if you follow this guide, you can remove the risk associated with starting a referral program. I will walk you through the most important things to consider during the set up process and start getting referrals.
One of our customers, iWader Fishing, runs a successful fishing equipment store with a pretty basic website set up. Yet, their referral rate hit 23% just after two months of using the referral program software ReferralCandy.
That's much higher than the industry average and shows what's possible when the referral message and strategy are aligned.
It is also worth noting that if you still face problems during your referral program set up, you get access to referral program experts when starting your 14-day free trial with ReferralCandy.
The most important ingredient of a successful referral marketing program is having a deep understanding of your customers.
This might sound cliche, but it impacts every part of your referral program. You need to understand why they would want to join your customer referral program, what the best way to get them to join is, and what would make them refer their friends.
Here are some questions I would consider:
These questions will make more sense as you go through your referral process and set up your referral program, but it is good to think about them first.
Now, let's dive into the mechanics of your referral program.
The first core piece is your referral rewards. This is a big section, so let's go through it together slowly.
There are two rewards to consider:
Reward for your advocates
Advocates are the customers who refer friends to your ecommerce store through the customer referral program. The referral reward is to encourage them to refer others and to thank them for bringing you more sales.
The most common type of referral reward for advocates is a discount coupon. This works best if your products are bought regularly. Baronfig, a brand that sells tools for thinkers, gives its advocates a $10 coupon for every friend they refer.
In a referral program software like ReferralCandy, you can set the discount amount or percentage, the minimum order required to use the coupon, and the coupon expiration. ReferralCandy will automatically generate single-use coupons for you in your Shopify store.
The second most common type of referral reward for advocates is a cash incentive. This works best if your products are not bought regularly, such as mattresses. One example of a brand that does this is Feel, which pays $5 via PayPal for each referred friend.
In ReferralCandy, you can set a fixed cash amount or a percentage of the referred friend's purchase (e.g. 10% of the friend's purchase). ReferralCandy will help you pay out the cash reward automatically via PayPal.
The last type of referral reward is a custom reward. This is great if you want to offer a unique brand experience. For example, ThreadBeast, a men's streetwear brand, gives its advocates a free package of streetwear to refer their friends.
In ReferralCandy, you can specify the custom reward for your advocates. We will not be able to fulfil this reward for you, given its nature. But we will inform you when a referral is made so that you can send out the reward.
Offer for referred friends
Next, you would also want to give an offer to people who are referred to your ecommerce store. Why?
We found that people love to offer something to their friends. When advocates can give their friends a discount coupon, they are more likely to refer their friends. Furthermore, the discount coupon will encourage their friends to buy your products.
In ReferralCandy, you can customize the discount coupon for referred friends in the same way as the discount coupon for your advocates.
Choosing the rewards can feel daunting. What type of reward should you use? How do you determine the amount? And so on.
But you don't have to overthink it when you are initially setting up your referral program.
A simple Give $10, Get $10 referral program has worked well for many brands, such as Branch Basics. And you can always change your rewards later.
Whenever you want to test different rewards, you might find these guides helpful:
Next, let's go to the customer-facing side of your referral program.
Generally speaking, there are two emails and two pages that you want to focus on initially:
For example, after someone buys a skincare product from DMD Skin Sciences, an automated post-purchase email will be sent:
When the customer clicks on the “Get Invite Link” in the email, they will be directed to their Share page to get their referral link.
ReferralCandy helps you send these emails and set up these pages so that you do not have to set them up manually.
To help you get started quickly, there is a default theme for your referral emails and pages. You can simply upload your brand assets to the simple theme—all of your referral program elements are automatically generated with the logo and banner, and you are good to go.
You can also customize your referral emails and pages further by adding a new theme in ReferralCandy. With a new theme, you can set the style and content of your referral emails and pages so that your referral program matches your branding.
When you want to be more sophisticated with your referral program, we recommend you also customize other parts of your referral program. You can read more about customization in the following guides:
Again, you do not have to customize every part of your referral program right away (especially if you are feeling overwhelmed). The emails and pages in ReferralCandy are designed to work “out of the box”.
If you are using Shopify, this step is easy. The top referral program software, like ReferralCandy can be found in the Shopify App Store.
If you're not using Shopify, there are two things to do:
You can set this up without any technical knowledge. Here's a helpful article you can follow.
If you prefer a more advanced setup with your ecommerce store, you can check out our API and JavaScript integrations. You will need developers to be involved.
Your referral program is ready for new advocates!
Instead of waiting for your customers to discover it, you should proactively let them know.
The best place to start is to inform customers who have already bought and tried your products. If they love your products, they will be ready to tell their friends about it. Knowing they will be rewarded for referring their friends will give them an incentive to actually do it.
In ReferralCandy, you can upload your customers' contact information and email them an invitation to join your referral program. When your customers join your referral program, you can see how many friends they have referred in your ReferralCandy account (under “Existing Customers”).
Whenever you feel ready to promote your referral program to even more people, you might find this guide, Promote Your Referral Program Without Sounding Desperate, useful.
Congratulations on setting up and launching your referral program!
While a referral program requires less maintenance and work than other marketing channels, you still want to make sure it is set up to maximize your referral sales. We do see a spectrum: some merchants choose to set and forget, some constantly tweak their referral program, and many in between.
In general, we encourage you to stay on top of your referral results and optimize your program, if necessary.
The fastest way to see your referral results is to look at the dashboard in ReferralCandy. You can at-a-glance see your referral sales, referral rate, referred traffic, and top referrers. A good way to know whether you should tweak your referral program is to compare your referral rate to the industry standard (which is available on the dashboard).
If you want to share your results or analyze them further, you can also download your referral report as a PDF or CSV file (under "Referral Report").
Customer referral programs bring many benefits to ecommerce merchants, such as:
Creating your own referral program brings many benefits as long as you follow the right steps.
Here are some common mistakes to avoid when building up your referral process.
While some ecommerce brands may start referral programs too early, a common problem is also starting too late. In turn, this results in missed revenue opportunities.
A good thumb rule is that once you get 100-200 orders every month, it makes sense to start a referral program.
Your referral program will likely generate enough referrals to be profitable once you reach this threshold.
Referral incentives, aka the things that motivate your customers to refer your program, should be clearly outlined.
To give you an example, see how clearly Honeylove outlines the referral program incentive here:
In a similar fashion, explain the benefit of your referral program to customers and then simply share the referral links with them.
For both a new and existing customer, you should make it as easy as possible to refer a friend.
Some of our customers with the best performing referral program do things as simply as possible.
For example, Farm Hounds uses a simple 'Refer your friend, get $20 OFF' offering, and they've generated over $600,000 in sales through their referral program.
Simplifying things is important, especially in the beginning.
To get your referral program work better, check out our referral program examples article, where we showcase some of the most successful referral programs.
If you have been following along and implementing your referral program, you are all set up now! Woohoo!
As much as we have simplified the process of setting up a referral program with ReferralCandy, setting up a referral program can feel daunting.
The above steps we went through will mitigate any risks involved in the process.
If you still feel like you need more help, a good next step might be to check out some existing referral programs to get inspiration for your own:
Finally, we want to help you every step of the way. We have nearly 2,000 5-star reviews on Shopify App Store because our customers love the product and our customer service. If you have any questions, feel free to reach out!
P.S. If you enjoyed reading this, subscribe to our newsletter where we share our latest articles and helpful resources
At ReferralCandy, we've been running referral programs for thousands of ecommerce stores for over half a decade now, and we've made our retailers almost $470,000,000 in referral sales.
A question we often get from ecommerce merchants is, "So, how well do referral programs perform, really?"
The answer is that referral programs can play a major role in revenue growth. One of our customers Branch Basics generated over $1.5 million from their referral program, and 10% of their overall revenue came from referrals. Brands like Farm Hounds have achieved even greater results, generating over $600,000 in referral sales with a referral rate of 22%.
It’s safe to say that referral programs work when executed right.
To get a better understanding of the effectiveness, let's examine referral rates more in detail and look at the referral rates by industry.
(NOTE: If you would like to set up your own referral program, be sure to check out ReferralCandy. You can try it free for 14 days.)
Your referral rate is the volume of referred purchases as a % of your total purchases.
So a 1% referral rate means that 1 in 100 purchases at your store happens through your referral program.
An advocate can share their referral link through social media platforms like Instagram, Facebook, X, TikTok, WhatsApp or through email. When the advocate's friend clicks on the referral link and makes a purchase, the referral rate increases.
Referral program software, such as ReferralCandy, shows your referral rate inside the dashboard:
To calculate the industry benchmark figures, we studied thousands of data points, tagged
our users to one of the 11 largest industries and analyzed each industry.
From there, we learned that referral rates tend to reach a stable rate after around 6 months.
The resulting industry benchmarks represent the average referral rates that our users achieved after running their referral programs for 6 months.
Here's what the full chart looks like:
To put things into perspective, here are some examples of product categories in each industry:
Following are the results of our analysis of referral rates in different industries.
This means you can reasonably assume that any successful retailer that's been using ReferralCandy for 6 months or more is getting about 1 in every 50 sales via referrals.
This should be a useful rule of thumb for an established business thinking about getting started on referral marketing.
If you already have product-market fit, happy customers, and a steady stream of customers from your existing acquisition channels, you can expect to increase your sales by about 2% minimum.
It's a clear outlier compared to the other industries—software and digital goods have referral programs that perform a full percentage point better than all other industries!
If that doesn't seem impressive, look at it relatively: the average software and digital goods referral program get more referral sales than the average referral program.
This could likely be attributed to the nature of tech communities. They're close-knit and full of early adopters who're willing to try something new because a friend or influencer recommended it to them.
When we last checked in with Atmoph, we learned that they were getting a referral rate of 24%—that is, they were getting 24 in 100 sales through their referral program.
They’re not the only example of brands having this high referral rate. In our last conversation, a few of our customers reported these referral rates:
With the correct referral messaging, it is possible for some brands to achieve results as high as these.
A common misconception about referral marketing is that it’s the same as email or social media marketing.
However, there is quite a big difference.
Marketing methods, including email and social media marketing, take revenue from existing customers, but referral marketing generates new revenue because it always comes from a referred customer, i.e., a new one.
Referred customers bring in a new pool of customers who might not have otherwise discovered your brand.
On top of this, referrals bring businesses three additional benefits:
Instead of relying on one of the marketing methods, you can for example combine email marketing with referral marketing using referral program software, like ReferralCandy.
Even if you have the best referral program software on the market and the best features, it won't matter if you can't increase your referral rates.
Let’s next go through a few of the best ways to increase your referral rates.
Without an attractive referral program offering, increasing your referral rates can be hard.
Let’s go through a few tips from our customer success manager to help you craft an attractive referral program offering.
Here are some ideas of what to give to the referral program advocate:
And this is what you can offer for the referred friend:
If you don’t know how to create referral program offers like these, one of the easiest ways is to use referral program software, such as ReferralCandy.
If you use ReferralCandy, you can add pop-ups to your website that collect new referrals, and as an additional extra step, you can accompany it with a good Shopify theme if you want to add more custom blocks for customers to learn about your referral program.
Post-purchase emails are emails you send to your customers after they have placed an order.
It’s the best way to let new customers know about your referral program and, at the same time, one of the best ways to increase your referral rate. It's common for people not to remember their referral links, but when they're emailed to them, they have something to refer back to.
According to our analysis, you should send your post-purchase emails right after someone purchases to see the highest conversions. Not for example two days after that.
You should inform not only new customers about your referral program but also existing customers.
Referral program software, like ReferralCandy can automatically send emails to existing customers about the referral program.
The software automatically spaces the reminder emails so they don’t come across as spam to your existing customers.
For the purpose of this study, we only included retailers who have at least 6 months of data with us. While 2.35% is actually a conservative estimate, we can't guarantee that everyone who signs up for a referral program will get a 2.35% referral rate.
If your sales volume is too low, or if your business simply isn't getting a lot of customers, you may not be getting many referrals at all. Business fundamentals are important.
High referral rates aren't everything. A high business referral rate is generally nice to have, but it isn't necessarily a great sign. It could also mean that your other customer acquisition channels aren't mature enough.
As a business owner or marketer, you always want to diversify your customer acquisition channels so that you aren't overly reliant on any single channel.
The main conclusion of this article is the importance of referrals and how they can’t be ignored.
Also, having a referral program isn’t enough; you have to know how to optimize it. How do you get your referral message right?
Check out our blog posts on how to improve referral rates, referral program incentives, or the secrets of Airbnb's referral program success!
Here are a few other referral marketing-related articles that could help you boost your referral rates:
Referral marketing is a customer acquisition channel that incentivizes loyal customers and transforms them into advocates to refer their network to your product/brand in exchange for rewards. Referral marketing is a tactic that leverages word-of-mouth and also the social proof concept.
When you set up a referral program, you have an organized way of tracking and rewarding existing customers that share about your brand and product to their friends. The flow is simple—existing customers sign up for your referral program, they share their referral link with others, and when others buy from your brand, both parties get the rewards that you’ve set up initially! Referral programs are a win-win-win situation for everyone involved!
Since referral marketing is highly dependent on the power of your existing customers, if you already have an established customer base and a decent number of avid followers for your brand and product, referral programs are a great way for you to scale up.
Referral marketing is one of the most cost-effective marketing strategies: using your current customers to spread the word about your brand to new customers.
We compiled a truly epic list of the best referral program ideas currently on the market, along with recommendations on what kinds of referral program software to use, incentives to offer, and current customers to target for your very own referral program.
If that sounds interesting to you, keep on reading.
But hang on—there's a catch.
It's not always easy for your customers to do. Between their hectic work schedules and a never-ending list of social and family obligations, your marketing strategy is the last thing on their minds.
To turn your loyal customers into your biggest brand advocates, you have to make the referral process as easy as possible for them, and you have to stay top-of-mind with killer referral incentives, like free products and major discounts.
Instead of reinventing the wheel to come up with your own referral marketing ideas, you may want to take inspiration from top brands who are absolutely killing it with referral programs.
By the end of our list, you will have enough referral program ideas to launch your very own program and open the floodgates of another customer acquisition channel for your business.
Before we begin, let's break down some basic referral marketing definitions so that we know that we're all on the same page.
A referral program or a “refer-a-friend” program is a marketing strategy used by many top ecommerce brands to incentivize existing customers to recommend the brand and its products to their family and friends.
A referral program is a deliberate, systematic way of getting people to make referrals to your business. Referral programs are often called word-of-mouth marketing, because they reward existing customers for sharing and incentivize new customers to try out your brand.
Customers are rewarded with referral incentives, such as free cash, major discounts, or a free month of subscription. While there is an upfront cost to the business, referral programs significantly increase long-term revenue by making loyal customers out of your existing customer base.
If you are wondering why you should have a referral program and how to run one, let’s take a look at how the top ecommerce brands are running their referral programs and the results they have achieved.
Before we begin, let's quickly go through the basics of referral programs.
One of the biggest stresses of any business is finding a solid customer acquisition channel, or basically, bringing in new customers. When you have a solid referral marketing program, however, you let your existing customers bring new buyers to your brand.
This not only significantly reduces spending on bringing new customers to your shop, but also increases customer retention, which is a very good thing.
Why?
Because loyal customers have a higher conversion rate than new customers and spend more per transaction, making customer referral programs the most cost-effective and lucrative marketing strategy that your business can possibly employ.
People don't make as many referrals as they intend to for a variety of reasons. A referral program helps make their mind up with a tangible reward for referrals.
Modern referral programs, or refer-a-friend programs, use software to track referrals made by happy customers through either a referral code, a rewards card, or a referral link.
Depending on the referral campaign, customers will usually receive some kind of referral bonus or benefit when they refer a friend. Referral marketing software automates the payout of these referral rewards.
This referral process creates a natural word-of-mouth marketing experience for your brand, which ultimately increases both your customer retention rate and your revenue.
To find out more, check out how ReferralCandy works.
The best way to bring in potential customers is to first focus on your existing satisfied customers. Rather than just offering cash rewards or free gifts in hopes that your customers will refer a friend to your shop, it takes a little bit of planning to set up a referral program that works.
Before creating a complex ambassador program or launching tons of marketing campaigns (of any kind), it's important to be clear about what your goals are for the program.
This will help guide you as you brainstorm referral marketing ideas. Some questions to consider are:
You can certainly achieve each of these goals, but it might require a different referral campaign for each goal. So it's important to be clear about your goals before beginning.
Canopy makes the world's cleanest and easiest humidifier for optimal skin health and wellness.
It’s not unusual for brands to choose product incentives rather than cash or credit incentives, but they definitely belong to the minority. Canopy does a great job in closing the loop for existing customers and keeping them loyal. If I’m an advocate, it makes absolute sense for me to be incentivized by free filters since I already own the device.
They’ve also made it enticing to click on the “Free Filter” button rather than to put “Refer-a-Friend Program” on their homepage.
Your referral sources are your happy customers, friends, and family. They are your biggest advocates and will be the lifeblood of your referral marketing program. Make a list of all of these groups and how you can easily contact them.
Now that you have a list of referral sources, carefully make an outreach plan. It's not quite as simple as sending a blast email with a generic referral incentive.
The types of referral programs that you use will largely depend on your list, so plan accordingly.
For example, close friends and family will trust recommendations when they're coming from someone in their inner circle, so adding an offer to the referral program will increase conversion rates!
While cash incentives likely seem like they’ll get the biggest draw out of your existing customer base, that’s not necessarily the case. One study found that non-cash incentives were 24% more effective with referral marketing than cash incentives. It’s best to offer something of tremendous value to your customers that will keep them coming back to your shop in the future.
Braxley Bands’ referral program reward structure:
Beyond the conventional 20% for you, and 20% for me, Braxley Bands also introduced an additional perk of standing a chance to win a $100 gift card (that’s essentially 3 more bands for the advocate).
That alone is an extra incentive at zero cost to the advocate, all he or she needs to do is to share via word of mouth.
Once you’ve settled on your referral lists and your incentives, it’s time to get people to spread the word both about your brand and your rewards! There are many different ways to do this, each of which brings in a different segment of potential customers.
Some of the most effective strategies are:
Or a combination of all of these. Multiple channels tend to work better rather than only focusing on one, so you should take advantage of more than one.
Do a little research about the most effective way to grow your lists, and then test it out for yourself.
Like most ecommerce brands, Chāmpo puts a link to their referral program in their site footer. It’s accessible and easy to spot.
In order to run a successful rewards program, you need to keep track of all of the referrals being made. You need to be able to keep track of who referred whom, the date they were referred, whether or not a conversion was made, and the best way to follow up with both the referrer and the referee.
One of the easiest ways to do this is with referral program software, like ReferralCandy.
A system that not only facilitates the reward within your shop but also provides accurate data on the referrals is going to help you know exactly how successful (or unsuccessful) your program is.
Some referral systems go one step further in making sure that your referrals are legit and not fraudulent. Here’s an example of what your referral report might look like on ReferralCandy!
Now that you have a clearer idea of referral programs, let's take a look at the referral programs of top brands and what we can learn from them.
Casper is a direct-to-consumer mattress company that was founded by five guys in 2014 with the goal of revolutionizing the mattress industry. Since then, Casper has grown into a global giant with over one million customers and a value of 750 million dollars.
A major contributor to their growth has been their referral program. The way it works is simple. When a new customer buys from Casper, they get a confirmation email.
At the footer of the email, there is a referral link to refer friends.
When a customer clicks on the ‘Refer & earn up to $75’ link, Casper explains to them how they’re able to earn an Amazon gift card in exchange for new referrals they make.
Plus, they make sharing the referral link extremely easy, which makes the program even more effective.
Casper’s referral program is something anyone can implement in any ecommerce niche. You don’t have to make the amount of money, as high as Casper has (earn up to $75), but you can use the same referral program style!
Based on your own preferences, referral program software like ReferralCandy enables you to create your own rules for your referral program.
Harry's is an ecommerce store selling men's personal care products at a lower price point than many competitors, making it an attractive option for many.
Their Harry's Shave Club pre-launch program gained massive popularity and is still one of the most talked about referral programs in the industry.
Their idea was simple. Harry’s wanted to build a credible referral program that focused on helping people spread the word to their friends, instead of not just spending money on paid ads.
That’s what they did, and they did it quite successfully. With this simple, yet effective home page design, they were able to collect 100,000 email addresses for the campaign in just one week.
To get people to this home page, Harry's used a "Milestone Referral Program," which involved instant prizes for people who reached a certain number of referrals. For example, if you refer 5 friends, you get a free shave cream.
Initially, this campaign helped Harry's get over 100 million dollars in funding, and they even bought their own razor blade factory to compete with the industry giants.
Also, they now have over 500 employees and are one of the fastest-growing companies in the industry.
Dia & Co is a plus-size fashion brand that encourages women of all sizes to feel comfortable in their own skin. During their first referral program, they offered their customers a subscription box of five stylist-selected items for $20 a month. If an existing customer refers a friend, they receive a $20 credit. Customers who were referred received free personal styling or a free box.
Dia & Co relied on email marketing to encourage existing customers to join their referral program. In response, over 40,000 customers shared the referral links, and in the first month of the program, the company saw an average of 22 conversions per day from the referral program.
This is what their CEO mentioned about the referral program:
This sums up why their referral program was such a success. A big part of their brand mission is to make all women feel comfortable in their own skin, so by combining this mission with a good referral program, they saw great results.
Since their first referral program, Dia & Co has updated its referral program with a new simple 'Give $25, Get $25' program that gets a $25 off coupon for your friend and for you once they order.
This new referral program is even more simple, so we’re sure it’s bringing them even greater results. It’s something anyone can implement with referral program tools, such as ReferralCandy.
When talking about the best referral programs, you can’t ignore Airbnb. While Airbnb’s referral program is not open for new referrals as of now, there is a lot to learn from what they did.
Their idea was simple. Airbnb’s referral program encouraged its users to invite friends onto the platform, which rewarded both the sender and recipient with $25 travel credits.
Jason Bosinoff, Airbnb's director of engineering, wrote on Medium.com that their success metrics were:
Since the launch of the program, the referrals increased bookings by up to 25% in some markets. After the first launch, the 2.0 version was launched, and the results were even more impressive. The 2.0 referral program produced 300% more signups and bookings than the previous version.
Their idea was simple, which is one of the main reasons it worked so well. With the help of referral marketing software, like ReferralCandy, anyone can implement a similar strategy.
Google is one of the most familiar and used tech companies in the world, from its search engine to its suite of apps and video streaming services. They don’t need much of an introduction, but what most people may not be familiar with is their referral program.
Google's B2B referral program offers referrals a chance to earn $8 to $23 for every new business account signup. Their referral program idea is simple, which is one of the factors it is so successful.
In October 2020, Google shared that Workspace now has 2.6 billion monthly active users, up from 2 billion monthly active users in March. For a company as big as Google, this is a huge increase, and one of the main reasons for this growth was their referral program.
One big takeaway you can take from Google’s referral program is its structure. For example, a user may net a $23 reward from one referral. However, due to the way the referral program is structured, users can refer a whole domain (such as a business with 8 employees) and then the $23 will multiply by 8 and the referral will receive $184 in rewards.
If you’re building your own referral program, you might want to use a similar structure to encourage your users to refer more to a company or larger group as a whole.
Revolut, founded in 2015, was one of the first "challenger banks" to use technology to disrupt the financial industry, so they had to stand out in terms of marketing and product.
From the beginning, Revolut's goal was to build something so good that customers would do the marketing for them.
After just two years in the business, Revolut reached one million customers for their product. When asked about how they did this so fast in an interview, this is what their CEO Nikolai mentioned:
The key for them was to make it as easy as possible for someone to recommend Revolut to their friends and families. To do this, they launched a referral program, where if you invited your friend, you earned 60 euros.
While there were different steps involved to earn the 60 euros, they were all made very clear, which made the referral program more clear. Referrals also saw the potential earnings from the same page.
While the entire growth of Revolut cannot be attributed to the referral program, it has been a huge contributor.
Canopy is a cloud-based practice management suite for accounting firms. We wanted to include them in this article due to their unique referral program. As a part of their referral program, every friend you refer who completes Canopy's demo call receives a $50 gift card to Amazon. If they sign up for Canopy's software, the referral gets 10% commission on their subscription fee.
This is the landing page you can send for the people you want to refer to.
Quite unique, right? Even though Canopy hasn't publicly mentioned the results they have gotten from the referral program, we’re sure it has been successful for them.
The referral program has been running for years, and if there weren't any return on investment, Canopy wouldn't still give out $50 Amazon cards.
While Canopy is a SaaS company, even ecommerce brands can take inspiration from them. By combining a popular element (Amazon) with a valuable product (Canopy), they have been able to create a referral program that works incredibly well for them.
Dropbox's referral program is probably one of the most well-known examples of referral marketing. Dropbox grew by 3900% with this very famous referral program.
Even today, almost ten years later, it is often used in case studies to demonstrate how referral programs may either assist or even act as the growth engine of a business.
Dropbox's referral program guiding principles are quite clear. Since the product provides cloud storage, it decided to give users more free space in addition to referral bonuses for both accepting invitations and referring friends. Dropbox users can get up to 16 GB for their referrals. So you basically get 500 MB for every friend who installs the Dropbox desktop app and the friend gets 500 MB too. They can sign up for any plan and you get your bonus storage the minute they download the app.
How Referrals Built The $10 Billion Dropbox Empire.
Dukaan is an ecommerce software that lets anyone create their first online store. Just recently, they launched their referral program, and in a Medium.com post, one of their product designers analyzed the process of building it and the results.
Their goal was to promote the referral program to their existing sellers and showcase it on their sellers' admin home page. The seller can copy a referral link to share with their friends, and if their friend signs up through the link, both get a reduced monthly rate.
As part of building the referral program, Dukaan tested three different design versions until they landed on the final version.
After launching, Dukaan saw the following results:
For already established platforms like Dukaan, these results are incredible.
The learning here is that no matter your niche, don’t forget the importance of A/B testing in your referral programs. Dukaan tested multiple versions before landing on the final version, and for you as well, it can make or break your success.
A/B testing may be hard to do manually, but most top referral program software includes it as part of the software.
When discussing referral-based viral growth, almost every blog post mentions PayPal’s referral program. PayPal was one of the first companies to use a referral campaign to achieve viral growth at such a massive scale, from “a 10% daily growth rate” to “A $1.5 billion buyout”.
All users need to do is send an invitation to a friend who doesn’t have PayPal and have them sign up and link their bank account or card. When they spend or send at least $5, PayPal sends both the advocate and the referred, $10. Users can invite up to ten friends and earn up to $100, and just need to make sure they spend/send at least $5.
Uber's referral program was the basis of its success. It was offered ever since the business began, and its quick expansion was largely due to it. The program has changed, but it still offers rewards to its users.
To earn referral rewards, users have to follow their conditions. The program is eligible only for a customer who received a program email. Users need to share a referral code in your email with their friend. To earn referral rewards, a referee must complete the first trip with the referral code.
We've written more about Uber's many referral programs here:
How Uber Covered More Than 50 Countries In 3 Years
Airtable is an online tool that combines elements from databases and spreadsheets. It's very adaptable and has a wonderful user interface. For each person users refer to Airtable, they'll receive $10 in credit.
Only when the person invited registers and confirms their email will the users be given credit. Users can invite people to use Airtable, and access an Airtable-referral link, from the Referrals and credits section of the Account page.
DocSend is a wonderful solution for safely sending important files while getting immediate feedback on how your recipients are interacting with your content. Their referral program is a way to show their customers’ appreciation for the tool to others while getting a $15 credit for each new user they invite.
A famous global internet marketplace for independent contractors, Fiverr also offers a referral program to its customers. The Fiverr platform links freelancers with individuals or companies looking to hire.
They allow their users to earn up to $100 for every friend who signs up and makes their first order. You can share it by email or with a link via social sharing. When your friends sign up to Fiverr, they get 10% off their first purchase, and you get 10% off their first order amount, up to $100.
Every marketer’s favorite social media example Duolingo offers its referral program too. With their program, for every person you refer who signs up for a Duolingo account, you receive a free week of Super Duolingo! This is a simple and easy way to attract your friends to learn a new language and get rewarded.
The Clymb is an adventure gear brand that has many customers from around the world.
They offer a referral reward structure to their loyal customers where you invite a friend to join The Clymb and you each get $10 in Clymb credit when they make their first order of $50 or more. They send your credit to your account when the first order ships.
They now even allow you to mass invite your friends and send them personalized messages.
Erin Condren is known for creating fun organization essentials for your home, office, and everything in between. They have an awesome referral program, where you can earn EC credits to spend in their online store.
All you need to do is to send your friends a referral link. After your friend sign's up they get a 10$ coupon, and after their first purchase, you will get rewarded with 1000 EC points (a $10 equivalent). You can stack up these points and shop later.
Fashion Referral Programs – Erin Condren
GREATS is the first sneaker company to be founded in Brooklyn. They claim to produce high-quality, long-lasting sneakers with an excellent fit and feel using quality material. Their referral program GIVE $30, GET $30 is a win-win for existing and new customers, offering a great discount and rewards.
Footwear Referral Program Examples – GREATS
Rothy’s creates essentials from classic shoes to carry-everywhere bags. They get their inspiration from the strides that the community is making. Their Refer-a-Friend promises to give $20, get a $20 reward, as your friends get their first order.
Here’s a great example from the ethical brand Girlfriend Collective. They believe in sustainable manufacturing and recycled materials. They use old water bottles and fishing nets to produce their clothing, so they won’t be clogging landfills and polluting oceans. With their referral program, you can earn free leggings. Give your friends 30% off their first purchase of $150 or more and earn a Free Pair of Compressive Leggings when they buy.
J.Crew believes that shopping should be fun and provides high-quality clothing that helps you look and feel your best, whether you enjoy specific details, unique fabrics, or traditional colors.
They offer their customers a classic GIVE $20, GET $20 referral program. Refer a friend and they’ll get $20 off their order, plus you’ll get $20 when they sign up for J.Crew Passport. What we like about their referral program is that it provides all of the information that potential advocates want to know, including the terms and conditions. Better to be safe than sorry!
Outdoor Voices brand designs its products through the lens of longevity and circularity to reduce our environmental impact. If you refer a friend to join the brand’s community, you’ll both get $20 off your next purchase of $100 or more.
It's also interesting how they've tied in a campaign specific hashtag #DoingThings with their referral program to maintain the consistency of their branding across the board.
Hanna Andersson was established by a Swedish woman living in America. By embracing essentially Scandinavian ideas, such as iconic design that successfully combines form and function, a sincere commitment to sustainability, and a way of life that promotes contented happy lives, she aimed to furnish childhood adventures.
If you refer a friend, then you'll both get a 20% off reward with Hanna’s generous referral program. See how the brand has also provided a cute hero image on the side to tap on the "share with friends" concept. And also added a bunch of links just in case potential advocates need them.
Boden is all about sustainability. Also, they offer a great referral program to their customers. All they need to do is to fill in the details on their form, next their friend receives 20% off their first purchase, and after they've ordered, customers get a $15 voucher.
Fabletics is a popular activewear, fitness, and workout clothing brand. Their goal is to design the finest stylish, high-performing, active-lifestyle goods in the world for every person and everybody at an affordable price.
With their referral program, you can get $40 in store credit if you refer a friend and they sign up and become VIPs. What's great about their referral landing page is that they've provided a way for advocates to customize the content of their invite emails, which could be a great point for personalization!
Thinx is a unique women's underwear brand. They make comfortable, absorbent products, and women around the world love their brand. Thinx offers a give $10, get $10 referral program. When you refer a friend and they make a purchase, you get $10 and they get $10 off their first order of Thinx.
Birdies brand was created by a woman who believes there should be a comfortable pair of shoes in all of your life’s journey. Designed to take you everywhere, Birdies shoes combine elevated style, ultimate comfort, and everyday versatility.
Their Give $30, Get $30 referral program pays to refer friends and family and enjoy shopping even more. Your friends will get $30 off their first order, and you’ll get $30 off your next order when they make a purchase. Again, Birdies strategically placed an image showing friends wearing Birdies shoes and it does help to paint the picture of referring the product to friends!
Hunter is a forward-thinking British heritage company established in 1856 and known for its famous Original boot. The company has a long history of invention and continues to create products that are weatherproof and functional in a variety of environments.
With Hunter’s referral program you can give your friends 20% off, and if they go on to purchase, they will also send you a 20% discount.
American Giant was born when the founders were dissatisfied with the way clothes were created. So new technologies emerged that allowed for reduced supply chains and direct online sales to customers like you.
The brand already has a lot of loyal customers and can use their Give $25, Get $25 refer a friend program to get rewarded.
DMD Skin Sciences is a skincare brand with a mission to solve patients’ skincare complaints in the comfort of their own homes. What began as a skincare clinic that was shut down during the Covid pandemic in 2020, has since evolved into a larger ecommerce brand.
Early on, the founder Ena Quitan noticed that new customers would contact her brand to arrange a skincare consultation because a friend referred them. This became one of the main customer acquisition channels for DMD Skin Sciences, so they decided to fully capitalize on it with a referral program.
They set up a simple referral program, where customers could give 10% off their first purchase to their friends, and receive a 10% off coupon code in return. They used ReferralCandy to send automated post-purchase emails to remind customers about their referral program.
After 6 months, DMD Skin Sciences saw the following results:
The company's founder Ena explained that referrals are the only source of new customers they have at the moment, and it's working incredibly well for them.
Dermstore is an online skincare and beauty shop in the United States. Their customers get rewarded $15 for each friend they refer, also providing friends and family with discounts on their first order.
Rather than allowing anyone to join their referral program, they've made it exclusive for people who have an existing account with them (pretty smart since now they have the data to reach out to them), but it could also deter non-customers from signing up as well.
Adore Beauty is the top pure-play online beauty retailer in Australia and an authorized supplier of more than 260 top-tier beauty brands. They have created a referral program, where you give $20, and receive $20 when your friend joins.
Karissa Bodnar founded Thrive Causemetics, a beauty company, and philosophy that goes beyond skin deep by uplifting various communities.
Their beautiful online store offers a Give $10, Get $10 referral program, where you can give your friend $10 off their first purchase of $50 and more, plus free shipping, and get $10 in points for each successful referral.
Quip is an oral hygiene subscription-based service that provides customers with toothbrushes and other dental essentials. They have a $5 for you, $5 for a friend referral program for their users, and also offer free brush heads, floss, & paste in addition to that.
Haircare brand Madison Reed allows their customers to earn up to $45 from their referral program. It’s a give $15 get $15 deal, and you get beautiful hair as a bonus. The referral program page has a simple form, advocates can easily sign up just by entering their email.
BoxyCharm is a monthly subscription beauty box that comes with 5 full-sized skincare and cosmetics items. Existing customers can use the company's referral program to send a special link to friends.
You will receive 500 charms (also known as points) for each new member who signs up. You can exchange the charms for cosmetics. It's also nice that they've explained the whole referral process from start to end so that advocates have a better idea of what's going to happen once they sign up.
Kari Gran Skincare has been successful in the clean skincare market for ten years. The business is founded on a small number of essential, oil-based products. The referral program on their website allows you to give your friends $10 off. When your friends buy from your invite link, you get $10 off!
Murad is the first brand of clinical skincare products, setting a new standard for high-performance skincare. Give a friend $10 off their first $50 purchase to get $10 off when they redeem. What's great about their referral program is that it's extremely easy to sign up, all they need to do is just fill in a very simple form.
Ohana provides beauty and skincare products and on their website they allow all of their clients to use the referral program. For every completed purchase you will receive 20% off.
Pavlok sells a waking-up device that helps its customers become more productive, relaxed, and mindful. They have a referral program that allows you to earn $20 from each friend.
MSI is a computer hardware manufacturer. If you refer a friend, you can get 300 points and a chance to win a big prize. This is slightly different from a default referral program because they've provided the added benefit of winning a prize on top of the purchase bonus.
Bose is an American manufacturer that specializes in selling audio equipment. They have a classic give $50, get $50 referral program on their website that inspires you to become everyone’s best friend. Bose made it clear and easy to understand the entire referral process by breaking it down into bullet points on their referral landing page.
Lightning and home decor brand Lulu & Georgia gives you and your friend 25$ for each successful referral. Again it's easy to sign up for it since it's a simple form which greatly reduces the friction for potential advocates!
Craft Coffee is a coffee subscription box that makes it easy to find good coffee at fair prices. With their referral program, your friends get 15% off, and you get a free bag of coffee.
With a punchy headline using power words, Craft Coffee is able to capture the attention of coffee lovers—who doesn't want free coffee?
Soylent is a meal-replacement product that has a combination of vitamins, minerals, and other necessary components. You can receive 25,000 points through their referral program for each referral that joins.
Stop & Shop is an online food store. Customers can use email, Facebook, Twitter, Messenger, Pinterest, and Pinterest Messenger to share referral links with friends. Customers who successfully refer friends will receive $10 to put towards their next purchase, while referrals who sign up receive $10.
Hydrant is an online beverage store that sells refreshment drinks and its generous referral program gives you and your friends a 50% off coupon.
Muscle food offers meal plans and prepped food with protein. They offer a referral program where your friend gets £10 off and you get £10 off.
Farm Fresh To You offers delivery service of organic fruits and veggies fresh from their farm and other local growers/artisans. You get to save $25 and your friend saves $15 with their referral program.
Flaviar gives you and your referred friend the possibility to choose an extra Tasting Box or bottle in case of a successful referral. Flaviar takes their branding so seriously, that even their referral program process is illustrated with branded images. And that works extremely well for them in helping advocates understand the referral process better.
Love with Food offers a huge variety of snacks to its customers. They have a referral program for all of their customers, where you can invite friends, and after they sign up, you get a free box of snacks and 1000 points to redeem at their store.
Happy Way is an Australian brand of organic and natural health snacks with a top-notch rewards system. Happy Way stands out in a crowded market that regularly takes itself too seriously by using vibrant color pops and upbeat visuals. With their Happy Way referral program, you and your friend get $10 if the referral was complete.
We Are Feel offers safe and natural supplements—multivitamins, collagen, and more. Their referral program is a simple one but it taps on the altruistic mind of "keeping friends healthy" by introducing these supplements to them. It's an angle that is widely used in referral campaigns and they tend to do well too.
Seated is an app for restaurant and cafe reservations. The referral program on their website allows their users and referred friends to get credits that can be used toward future reservations.
As seen above, Seated has a whole FAQ segment that fully answers all of the commonly asked questions from potential advocates.
fatty15's referral program taps into the altruistic behavior of humans. Products like supplements tend to be on the personal side and recommendations from loved ones tend to do better than general advertising.
Their referral messaging and slogan targets the main selling point which is to improve long-term health and wellness for loved ones. Their referral landing page details the process of signing up and provides clear benefits and even a referral FAQ segment to clarify doubts.
GPen's referral program gives your friends 15% off and a 20% discount to you.
Vampire Vape sells a variety of e-liquids, disposables, vapes, and pods. You can use their refer a friend feature so that you and your friend will get £5 off your next order.
Vape Loft gives you and your friends a $10 coupon for each successful referral.
Vape Merchant offers a classic give $15, get $15 referral program to their existing customers and new friends.
Ripple+ has a well-designed referral sign-up page for their referral program. They offer a basic give 20% + get $10 off referral program. It's simple and straight to the point. It's also interesting how they've decided to provide different referral incentives for their advocates compared to their "friends". There's also a simple illustration of how the referral program works.
PetFlow offers a classic give $10 get, $10 referral program to their customers and their furry friends.
An animal pet insurance brand Animal Friends gives you and your referred friend a £25 voucher to boost their sales and attract more customers.
A pet food online store PetDirect gives you $10 and your friends $10 when you tell them about the store with your personalized referral link. Their referral landing page has a cute approach by using a pet pun to get the attention of people on the page—plus it does wonders for their branding!
At Budget Pet Supplies, you and your friends get the chance to collect rewards together. All you have to do to earn thousands of reward points is recommend a friend or family member to Budget Pet Supplies. You will receive 500 reward points for one referral link, and your friend will receive 200 reward points in addition to a 15% sign-up and purchase discount.
Pet Releaf sells plant-based products for pet health. In their referral program, they give you and your friends $20 to shop on their website.
Superfoods for pets brand PetKind gives your friends $10 off their first order and you get $20 (in points) for each successful referral.
A Box of Stories is a subscription box service in the United Kingdom that delivers four hand-picked novels for the price of a paperback (about £15).
As a relatively new brand (founded in 2018), A Box of Stories relied on Facebook advertising to acquire new customers. The cost of acquiring new customers was high, so they started looking for alternative ways to get their product out to new potential customers.
They got a recommendation that ReferralCandy could help them reach new audiences and decided to give it a chance in 2020.
A Box of Stories used ReferralCandy's coupon code feature to offer discounts on their products. Customers could offer their friends a £4 discount (about 25%) and receive an additional £4 discount once they make their next purchase.
Customers received this incredibly well. This is what Aasha, the founder of A Box of Stories mentioned on the results:
In just a little over four months, close to 5,000 customers joined the referral program and the company saw a 3000% return on investment with ReferralCandy.
This is an ideal scenario when the right messaging and the right referral program tool are combined.
With the Five Good Friends program, you can refer a friend, and you and your friend will receive a $50 gift card when they join Five Good Friends and complete their first service visit. Sometimes, referral incentives don't just have to be strictly cash or products, they could come in the form of gift vouchers and gift cards!
QE Home sells luxury bedding like duvet covers, kids' bedding, down duvets, quilt sets, weighted blankets, and more. You need to share $10 off that your friends can use towards their first order and get $10 off for each successful referral.
The Conran Shop is a home accessories and textile eCommerce store. They offer their users “give 15%, get 15% off” for referring a friend.
Baloo makes weighted blankets and their referral program is easily accessible in the footer of their ecommerce site. It brings users to a referral sign-up page where there's a simple form for them to sign up for the referral program easily.
Since Baloo uses ReferralCandy for its referral program, it’s a great example of what you can do with our software.
In the WoW referral program, the player and their friends receive not only free game time but also exclusive in-game items. The conditions are also provided for new users who have not played World of Warcraft for a long time (more than 2 years). This increases the number of active players who show loyalty to earlier users.
Share your referral link with your friends to earn rewards. When an invited friend registers for a Binance account and makes his first deposit worth more than $50, you’ll both receive 100 USDT ($100) in trading platforms fee credit.
Lunatic Capital offers their members get discount for a monthly subscription by inviting 2 friends. For example, John invited 2 of his friends. And in case of a successful referral, John will get a $160 discount for the monthly subscription.
Cash app lets customers and their friends get bonuses following these simple steps. They just have to download the application, enter their referral code in the profile, link a debit card, and spend within the given time frame to receive the referral bonus.
TransferGo is an app that can help you easily send money to over 160 countries. You can earn 22€ on your bank account every time your referral friends make their first transfer.
Instead of the usual cash or discount rewards, Western Union’s referral program introduced another incentive where customers and their referred friends can earn a $20 Amazon.com e-gift code.
Turkish Airlines gives you 500 Miles for every invited friend. You can refer up to 5 friends and earn 2500 Miles.
Friendly Planet offers travel services. They offer their customers a generous referral program, where you and your friends can earn $100 each.
Travelink gives you a $25 Gift Card for a first-time booking or when you refer friends and family.
All travel enthusiasts can refer a friend and they’ll both save £100 on your next trip with Rooh Travel.
With the Holiday Vacations referral program you can earn $200 in Refer a Friend credit for each new friend you refer.
Kensington Tours offers you and your referred friends or family members $250 each to spend on your next trip. Their referral landing page provides just the right amount of information for any customer-turned-advocate to understand what your referral program process is like and how they'll benefit from joining it.
CapitalOne also has a great referral program for its users. You need to sign in to your account to get your personal referral link, then share that link with family members or friends. If they’re a new Capital One cardholder and get approved using your link, you’ll earn a bonus for each friend approved.
American Express rewards their loyal customers if they refer a friend and get approved for the card.
With Payoneer’s referral program you can get a $25 reward when referring a friend or family member.
Chase Bank offers up to 75,000 bonus points or up to $500 cashback per year in their referral program for each friend that gets referred.
Refer-a-Friend eligible users get Discover’s credit referral reward of $50 to $100 if their friend applies for the specific offer sent via the link provided.
By introducing friends and family to T-Mobile to open new postpaid accounts, current customers are eligible to win a $50 Virtual Express Prepaid MasterCard card.
Mint Mobile offers you 3 months of free usage for referring a friend. You can also earn up to $90 for each referral. The amount of credit you get will depend on which plan your friend picks.
If you refer your friends to Metro, you can earn up to $125 a year. For every friend who joins any Metro plan, you’ll receive a $25 virtual prepaid Mastercard.
Earn £25 with the FoneHouse referral program. There are some steps you need to follow in order to refer friends and earn rewards.
Building a referral program from scratch can be daunting at the start.
What referral incentives should I offer? How often should I promote my referral program? What if people are taking advantage of our referral campaigns?
These are all legitimate questions that any business would have. What matters most is to really understand who your customers are, and what makes them happy? Not to forget make sure that your product itself is of good quality and easily referable.
What are your favorite ecommerce referral programs? If this list is missing your favorites, let us know!
P.S. If you enjoyed reading this article and want to grow your ecommerce store, subscribe to our newsletter to get our latest articles and roundups.
The previous versions of this article were written by Visakan Veerasamy, Si Quan Ong, Darren Foong, and Marquis Matson, Alfred Lua, marketers at ReferralCandy. We update this article regularly to keep it relevant and useful to ecommerce merchants.
A referral program or a “refer-a-friend” program is a marketing strategy used by many top ecommerce brands to incentivize existing customers to recommend the brand and its products to their family and friends.
Referral programs are often called word-of-mouth (WOM) marketing, because existing customers are rewarded for sharing and incentivize new customers to try out your brand.
Said referral incentives, include free cash, major discounts, or a free month of subscription or even products and custom gifts. While there is an upfront cost to the marketing channel, referral programs significantly increase long-term revenue by nurturing loyal customers out of your existing customer base.
One of the biggest stresses of any business is finding a solid customer acquisition channel, or basically, bringing in new customers. When you have a solid referral marketing program, however, you let your existing customers bring new buyers to your brand. This not only significantly reduces spending on bringing new customers to your shop, but also increases customer retention, which is a very good thing.
People don't make as many referrals as they intend to for a variety of reasons. A referral program helps make their mind up with a tangible reward for referrals.
Modern referral programs, or refer-a-friend programs, use software to track referrals made by happy customers through either a referral code, a rewards card, or a referral link. Depending on the referral campaign, customers will usually receive some kind of referral bonus or benefit when they refer a friend. Referral marketing software automates the payouts of these referral rewards, identifies possible referral fraud cases and ensures that your referral program runs smoothly with minimal effort.
This referral process creates a natural word-of-mouth marketing experience for your brand, which ultimately increases both your customer retention rate and your revenue.
Setting up a referral program should not be hard. Here's how you can do it in six steps and start getting referrals!
Our guide helps you choose your referral program incentives (with 20+ real examples!) and explains referral offers vs rewards.
Setting up a referral program should not be hard. Here's how you can do it in six steps and start getting referrals!
We've been running referral programs for thousands of ecommerce stores for over half a decade now, making retailers almost $470,000,000 in referral sales.
A referral program is a deliberate, systematic way of getting people to make referrals to your business. Referral programs are often called word-of-mouth marketing, because they reward existing customers for sharing and incentivize new customers to try out your brand.
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So you have a WooCommerce store, and you're looking to set up a referral program plugin. Well, you're in the right place as we have all the details here for you
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