How to Make the Most of Your Referral Program

When you consider how you will market your product, service, or store, a few ideas come to mind. These can include social media, loyalty programs, or the less-used but strong-results option, a referral program!

To understand what a referral program is we first have to understand what referral marketing is. It’s what marketers call word-of-mouth marketing or people marketing.

Referral marketing is using referrals as part of your marketing process. There are many ways you can use to get referrals but a referral program is one of the best.

You ask your current customers to refer your business to others and in return, you reward them for every referral.

Table of Contents

• Referral Programs and Loyalty
• Benefits of Having a Referral Program
• 1. Customers Trust Referrals
• 2. Low Investment
• 3. Recognize Your Current Customers
• 4. Customers Are Always Connected With Potentials
• 3 Tips to Creating Your Referral Program
• 1. Set Effective Referral Incentives
• 2. Decide When Your Customers Get the Reward
• 3. Keep Customers Aware of Your Referral Program
• What Does the Referred Party Get?
• Last minute words

Referral Programs and Loyalty

Referral programs are a great way to build loyalty with your brand.

Why? Because you’re asking people who trust you to ask others to trust them.

Imagine this scenario:

“Hey Fred, have you tried X’s ice cream?”

“No. I haven’t., Mark. Are they good?”

“Good? They’re amazing! You should try them. Here use my code when you try them and you’ll get a discount. Sweet, right?”

“Cool!”

What just happened here?

Mark referred his friend to an ice cream store he’s a fan of. He also used the store’s referral program to make it a win-win for him and his friend.

Fred gets perks when he refers friends and family, and these friends and family members get a discount on their first purchase.

Not only that, they get enrolled in the ice cream shop’s referral program, transforming them into loyal customers and new sources for referrals.

Benefits of Having a Referral Program

As you have seen above, your business can easily benefit from a referral program. Let’s go into detail about these benefits.

1. Customers Trust Referrals

When a customer trusts a brand, they become loyal. Once they are loyal, they are more willing to refer friends and family to that brand.

Wouldn’t you trust your mother if she says a brand of jam is amazing? Moms don’t lie and they’re quite picky.

But seriously, trust makes customers feel like they are part of your brand. They want to share their good experience with you with others.

Further reading: What Is the Referral Program Conversion Rate?

2. Low Investment

One of the top reasons you should consider a referral program for your e-commerce store is that they come cheap.

Referral programs require little investment but generate great results.

In a Forbes article, Steli Efti, CEO and cofounder of Close, highlighted that “Referral sales require almost no financial investment, but they bring in very valuable warm leads.”

3. Recognize Your Current Customers

Referral marketing programs are a great way to reward multiple parties. Your current customers who enjoy your services and products and who take time to refer you to their friends and family deserve to be rewarded.

After all, rewards also incentivize them into spreading your services.  What you want to do is highlight early on what these customers get in return for referring you.

Let’s say Amanda referred Business X to her friend Lucy. So, what does Amanda get for referring her friend?

At Gameball, each current customer who refers someone gets points that they can use as a discount on an upcoming purchase or exchange these points for free shipping.

4. Customers Are Always Connected With Potentials

One of the top benefits of having a referral program is that your potential customers already know some of your current customers. Remember what we said about referrals? People refer friends and family.

Which means your potential customer Fred, may already know one of your current customers, Lucy.

In other words, referral programs rely on connections. People refer your business to other people they know who refer you to more people and so on. This “network” of referrals enables you to generate more revenue. The bigger the network, the bigger the revenue.

3 Tips to Creating Your Referral Program

Now, that you are familiar with the basics and benefits of a referral program. Let’s create one for your business.

1. Set Effective Referral Incentives

A good place to start is to reward your current customers when they use your referral program and refer friends and family to your business.

Setting up incentivizing rewards, like coupons, discounts, and other benefits based on customer behavior, can easily prompt them to invite others.

Incentives also make customers more loyal to your brand and entice them to move forward with the referrals.

Gameball offers Referral Program options that you can tailor to your business or store needs. Using the Gameball dashboard, you can configure specific discounts or offers for loyal customers who have referred your business to people in their network.

The image shows a reward of 2000 points that are equivalent to a $20 discount on the customer’s next purchase. You can do this through Shopify, WooCommerce, or the Gameball website.

2. Decide When Your Customers Get the Reward

Once you decide on what the reward is, you need to decide WHEN and HOW your loyal customer can have their reward.

Is it after a “referred” person uses a promo code? Is it when they sign up to your store with their email? Or is it when the “referred” person makes a purchase? Write a review?

All of these are called “events” and can be easily configured through the Gameball Dashboard, as shown in the figure.

Events are touchpoints for your referral program and determine when your loyal customers get their rewards.

3. Keep Customers Aware of Your Referral Program

Another important step in creating your referral program is constantly keeping customers aware of it. If customers aren’t aware of a referral program, they may or may not refer you. But informing them, especially new customers, will keep your network growing.

You can easily set up enticing in-app messages to remind customers – and inform new ones – of your referral program and the benefits of referring others to your store.

The Gameball widget also includes a tab for referrals, where customers can easily share their referral link with their network.

What Does the Referred Party Get?

At Gameball, we highly recommend that the referred party gets a reward as well and is instantly introduced to the referral program.

Here’s why:

For starters, you want to entice new customers to buy from you. Who skips a first-time purchase if they are to get a special offer? Maybe several points too that can be used as discounts later?

Second, you want the referred party to not only use your product or service instantly but also tell their network about you!

Learn more about Instant Rewards: The Special Recipe for Increasing Customer Loyalty

Last minute words

We’ve talked about referral marketing, the importance of a referral program, and the top tips to create your program and make it successful. Don’t forget to follow referral marketing program best practices too.

If you want to start engaging your current customers, create a referral program with Gameball, and ask your customers to refer your business. Don’t forget to highlight what they get in return for referring you.

Want to learn more about referral programs? Book a demo with Gameball.

‍