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How to Run a Referral Program

March 26, 2014 Published by

You’ve probably experienced the power of referrals from your friends many times in your personal life. When a friend you trust recommends a new restaurant, recipe, or product, you’re more convinced that it’s worth your time. According to eMarketer, 68% of Facebook users are more likely to buy a product that has been referred by a friend. On top of that, Nielson data shows that 90% of consumers rely on friends’ recommendations when making purchases. [more]

Without a doubt, referrals are powerful tools for increasing sales on your ecommerce site. While striving for excellent customer service and satisfaction is one way to earn referrals, there are other ways to cultivate referrals you may want to consider. When building a referral program for your business, keep these tips in mind.

Make Referring Easy & Fun – If shopping cart abandonment rates are any indication, it only takes a small inconvenience to keep someone from using a feature. Give your customers the ability to share referrals via email, social media, blogs, copy+paste referral links, etc.. You should also give users the option of writing their own message along with their referral – authentic recommendations are more effective.

Create a Compelling Offer – If you incentivize your referral program, more people will be likely to use it. Incentivized referrals can be a great way to generate new business. This was one of the reasons for Groupon’s rapid growth, and their referral program continues today.

Track Your Success – Monitor relevant referral data, including which users are sharing, how they are sharing, and whether referral increases correlate with other promotions you are running. Use this data to adjust the program as needed.