7 days ago Last updated July 10th, 2019 24 Reads share

10 Steps to Launching a Successful Referral Program

Steps to Launching a Successful Referral ProgramImage Credit:

One of the fastest ways to drive traffic and sales to a website is through a referral program. This leverages your existing visitors and customers and gives them the power to promote your business for you. Through this, they are able to refer their family and friends to your site. With the power of trust, these prospects have a higher chance of a conversion. Read on to find out which are the 10 steps to launching a successful referral program.

referral program

Step 1: Get to Know What a Referral Program Is

Before you can launch your own referral program, you have to know what it is. A referral program is a system that allows your website visitors and customers to refer people to your site in exchange for a reward. The reward can come in different forms. This can be a discount code or a freebie. Or it can be a special product that is not sold in your shop. In any case, the reward is designed to encourage your visitors or customers to refer people to your website. The more people they refer, the better. Why is a referral program better than merely promoting your site? Well, launching a referral program is mostly free unless you want to promote it through paid advertising. But this free system can allow you to quadruple your website’s traffic and profits from a single launch.

Step 2: Learn to Set Up Your Referral Program

Once you have decided that a referral program is for you, it is time to learn how to set it up. A referral program may seem simple on a surface. It has a form that allows website visitors and customers to input names and contact information of family and friends. But you need more than just a form. You also need to include a dashboard where your referees can find how well they are performing. This dashboard should show them who they referred and how they can get the reward. All these can be quite complicated and can be such a hassle to be done from scratch. With this, you’ll need a shopify affiliate app or  referral software. This is a click-and-go solution to setting up your referral program. As long as you have the details, you can already launch one. But before you do that, you need to ensure that you have the details down. You can sort that out in the next step.

Step 3: Decide on Your Reward

Your reward is what will attract people into your referral program. It is what you’ll give them to encourage them to promote your website. The reward must be attractive enough for them to take action. Simply giving any type of reward will not do. It should be something that can address your market’s needs. For example, Uber gives incentives to new drivers and free rides to riders. The difference in the reward shows that they know that each market segment has a different need.

Step 4: Decide on Who to Reward

word of mouth

There are two actors in a referral program: the referrer and the friend. The role of the referrer is to promote the website and get as many people into the site as possible. The friend is the person who signed up to the website because of the referrer. While it may seem that only the referrer needs a reward, you’ll be surprised that the friend needs it too. It is because every action needs some form of motivation. You need to reward both if you can.

NOTE: If you are short on your budget and you don’t have the capability to give rewards to both, you can just choose to reward one. Who you’ll reward will depend on the behavior of your target market. For example, free rides can be given to new riders instead of the referrer. But for eCommerce websites, it may be better to give a discount code to the referrer instead.

Step 5: Decide How the Reward Will Be Distributed

Knowing the reward is one thing. Knowing how to distribute it is another. You need to know how your prospect will get the reward. Will he get it via email? Will you have to ship the free item? If you choose to ship the item, who will shoulder the shipping fee? Is it you or the prospect? You need to sort these out so that you can list a set of rules that your prospects will follow when they join your referral program. It is important that everything is written down so that you can always refer your prospects there in case of confusion.

Step 6: Promote Your Referral Program in Your Website

Once you have the details, it is time to create your referral program. If you have a referral software, this is easy. All you need to do is input the details of your referral program and push a few buttons and launch it. Once you do, you’ll have a page on your website that is dedicated to your referral program. You can then link this page to your navigation bar.

It is important that you promote your referral program so that your website visitors and customers know about it. One way to do this is to have an announcement bar on the front page. This is a small bar that can only be seen on your website’s homepage. You can show them that they can get a free item or discount code when they refer people to your site. Another way to do this is through a pop-up. This will show your visitors and customers that your referral program exists and they should join.

Step 7: Promote Your Referral Program to Your Subscribers

get subscribers

Another market that is ready to receive promotions from you is your subscribers. So the easiest way to promote your referral program is to simply inform them. All it takes is a single email. You can just send a broadcast email to your list and you’re done.

NOTE: This strategy can only work if you have a list. The more people you have on your list, the better. If you don’t have a list, you may want to proceed to the other steps instead.

Step 8: Promote Your Referral Program to Influencers

Another way to promote your referral program is through influencers. Unlike traditional marketing, influencers have a way of reaching the hearts of their followers. They do more than instruct them on what to do. Instead, they inspire them and they take action on their own. This is the reason why influencer marketing is very important. By enlisting a group of influencers in your niche to promote your products, you can instantly reach a pool of highly engaged subscribers that are waiting to take action.

The key is to give the influencer a reason to promote you. Fortunately, it is not that difficult to do this. Sometimes, an exclusive discount code with the influencer’s name will do. Most influencers will be willing to promote you as long as they like or resonate with your products and services. If it is something that they believe in and they liked using your products or services, you can be rest assured that they will promote it even without some heavy incentive.

Step 9: Promote Your Referral Program Through Paid Advertising

Another area that you should explore is paid to advertise. There are different types.

First, there is social media marketing. The most popular out of the bunch is Facebook. In fact, many eCommerce websites have made money just from this. This is because 97% of online surfers now use their mobile phones and they love staying on Facebook. When they scroll through the feed, you have the opportunity to show your products and services by paying a small fee. The reason why Facebook marketing is so effective is audience targeting. This is the only platform that allows you to filter through the target market based on interests. It means that the people who see your ads are only those who are primarily interested in it. Aside from this, there is also a similar audience targeting option. This allows you to discover new audiences with the same profile.

Second, there’s search engine advertising. These are the ads that you see in the search results. This used to work better back in the old days when mobile surfing is limited. However, there is still some use to it. This is because customers usually go to search engines when they are ready to buy. This is different from social media marketing where they randomly come across your ad and then decide if they like to buy. Instead, they go to the search engines with the intent to buy and you show up. This is far more powerful and tends to get more clicks and sales.

Another form of paid advertising is through display advertising. This is where you go to websites in your niche and pay them a fee to put up your ad on your page. It is similar to influencer marketing only that there is payment involved. This is because you look for existing content creators or influencers who are willing to be paid for promotion.

Step 10: Measure Your Results

measure your progress

You’ll never know if a referral program is successful unless you measure your results. You need to know if the traffic really came from your promotion efforts. You also need to create different links of campaigns for each promotion method. This way, you can stick with the promotion methods that work and forget about those methods that don’t.

One way to measure this is through analytics. You can set up Google Analytics on your site so that you can track your existing traffic. Then, you can set up campaigns to buy button clicks. This will then measure how many people buy from your site.

Also, you need to track sign-ups in your referral program. So you need to find out how many subscribers you currently have and how many subscribers you gained due to the promotion. You also need to track where the sign-ups came from. This way, you can focus your promotions there.

BONUS Step: Look at What Successful Brands are Doing

The success of a referral program can depend on so many factors. It is a mixture of strategy and luck. Just like viral content, you’ll never know what the market really wants until you test it. So you need to test different promotion methods to see which ones will get you more sign-ups. You need to go out there and see what successful brands are doing.

For example, PayPal did not only create a referral program and wait. They went out of their way and promoted their referral program. On top of that, they are willing to lose money in exchange for new accounts. They pay people just for signing up. On the surface, it may seem like they are losing money. But in the long run, they are gaining new subscribers and more and more people are knowing about their service. This is the reason why it became one of the largest online payment processors that it is known today.

The same is true for Uber. They reward new riders and drivers with incentives. They give discounts and free rides to riders and they encourage drivers to take more rides by giving them incentives. This encourages people to sign up with their services until it eventually penetrated the habits of the market.

A relatable example is Best Hunting Bow Labs. They have a simple referral program that was able to get satisfying results.

NOTE: New to Ecommerce? No problem! Learn how to start an eCommerce here.

Conclusion

A successful referral program depends on three things: decision, creation, and promotion. First, you need to decide on how your program will look like. You need to define the rewards that you will give away along with who you will reward. From there, you need to use referral software to craft your program. After that, you need to promote it. It is that simple.

Emma Williams

Emma Williams

Emma Williams is a young mother of 2, having the expertise in writing about various topics of business, lifestyle, beauty, fashion, yoga and a lot more she has decided to start her own blog at thewebaddicted.com. She enjoys diving into new aspects of the life, learning as much as possible from the business world, marketing and branding.

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