Referral programs and word-of-mouth marketing can be a smart way to grow your business without spending a lot. They’re often much cheaper than traditional ads and can generate more sales. Why? Because they tap into your best resource—your loyal customers.
Here’s how it works: You encourage your current customers to recommend your products to their friends and family. In return, they get rewards. It’s like turning them into your personal brand ambassadors.
If you’re running a Shopify store and want to start a referral program, don’t worry—it’s easier than you think. With the right tools and a solid plan, you’ll be set.
Let me share a simple guide to setting up a referral program for your Shopify store and a few tips I’ve picked up along the way.
3 Key Elements of a Successful Referral Program
Okay, let’s break down the key ingredients of a referral program that actually gets results. From my experience, it’s not just about offering rewards! It’s about creating a system that’s easy to understand, simple to use, and motivates both the referrer and their friends.
1. Choose Your Reward System
- Decide between single-sided rewards (only the referrer gets rewarded) or double-sided rewards (both the referrer and their friend get rewards).
2. Make It Simple
- Simplify the process for participants by:
- Providing one-click referral links or codes.
- Offering clear instructions like “Share your link with friends.”
- Being transparent about rewards for both referrers and friends.
3. Use Tools for Tracking and Management
- Leverage software or Shopify apps to:
- Automate referral tracking and reward distribution.
- Allow participants to monitor their progress and rewards in real time.
How To Set Up A Referral Program On Shopify
Step 1: Preparation
Before we dive headfirst into setting up your referral program, let’s take a step back and do a little prep work.
Define Your Purpose
You need to know where you’re going before you actually go. First things first, ask yourself: WHY do you want to set up a referral program? What are you hoping to achieve?
- Is it to boost brand awareness?
- Is it to acquire new customers?
- Is it to increase sales?
- Is it to build customer loyalty?
Having a clear purpose will guide your decisions as you design and implement your referral program.
Understand Your Customers
Now, think about who your customers are. Here are some things to consider:
- What are their interests and motivations? Are they more likely to share your brand for discounts, free products, or exclusive perks?
- What do they care about? Is it sustainability or social causes?
- Needs and Pain Points: What problems are they trying to solve? How can your products or services help them?
- Preferred Communication Channels: How do they prefer to communicate? Email, social media, or other channels?
Step 2: Defining Your Incentives
Choosing the right incentives is the heart of your referral program. From my experience, this step can make or break its success, so it’s worth putting in the effort to get it right.
Deciding What Actions to Reward
Start by deciding which actions will earn rewards. Will customers get points for simply sharing a referral link, or only when their friends make a purchase or subscribe to your social media?
I recommend rewarding conversions, like completed purchases, as they directly impact your sales. However, you can also add smaller rewards for actions like signing up or creating an account to encourage engagement.
What Will Referrers and Referees Earn?
Now, for the fun part – choosing the rewards! This is where you get to be creative and offer incentives that truly resonate with your audience.
- Discounts: A classic and effective reward, offering a percentage or fixed amount off their next purchase.
- Free Products: Offer a free gift with their next purchase or a free sample of a new product.
- Loyalty Points: If you have a loyalty program, award bonus points for referrals.
- Exclusive Access: Offer early access to sales, new product launches, or exclusive content for your top referrers.
- Gift Cards: Provide gift cards to your store as a versatile and convenient reward.
From my experience, discounts and loyalty points are usually the most popular incentives. They’re easy to understand, track, and redeem.
Pro Tip! The best referral programs benefit both the referrer and the referee. For example, you can offer referrers $10 off their next purchase and give referees a 15% discount on their first order.
Additionally, always ensure your rewards are sustainable. Calculate your margins to ensure the program doesn’t eat into your profits.
Step 3: Installing A Referral App
Now, it’s time to set things up! There are plenty of apps out there, but if you’re looking for an all-in-one solution that’s both powerful and user-friendly, I highly recommend Joy Rewards & Loyalty Program.
It not only lets you quickly and effortlessly run a referral program but also helps you manage loyalty points and keep your customers engaged over time (more details down below).
Step-by-Step to Install Joy Loyalty
- Step 1. Visit the Joy Rewards & Loyalty Program app on the Shopify App Store
- Step 2. Click Install and grant the app access to your Shopify store.
- Step 3. Once installed, you’ll be able to access the app from your Shopify admin dashboard.
- Step 4. Select a plan. You can totally set up a referral program on the Starter plan. However, if you want more advanced features like POS integration or referral widget customization, you need to subscribe to the Professional plan and above.
Step 4: Configuring A Referral Program on Shopify Using Joy Loyalty
Now, let’s get down to the nitty-gritty and set up your referral program. I’m on Joy’s Advanced plan; if you’re using the Starter plan, some features might not be shown, and the interface can be a little different.
- Open the Joy Loyalty App in your Shopify admin.
- Go to Reward Programs.
- Click Referrals.
- Set up rewards for your referrers and referees by clicking the pencil icons.
- Select to discount by percentage or by a specific amount.
- Add your discount value.
- Set up Referral Redirection URL to any page you like, such as your referral product landing page.
- Tick the boxes next to the social channels so your referrers can send the link more conveniently.
- Turn on anti-cheat.
- Once done, click Turn on on the top of the page to launch your program
- Go to Branding > Click Setup in the Referral box and customize the referral popup to match your brand.
Step 5: Promoting Your Referral Program
Once your referral program is set up, the next step is to promote it effectively. Make it visible in your Shopify store. The more customers see it, the more they will participate.
- Create a Dedicated FAQ or Landing Page: This could be a FAQ page or a dedicated landing page that clearly outlines your referral program. Explain how it works, what the rewards are, and how customers can participate. Make it easy to find and understand. Follow this guide to create a stunning referral program landing page using Joy.
- Add a Banner or Pop-up on Your Shopify Store: To make sure your referral program doesn’t go unnoticed, you should add a hero banner to your store. This will make it visible to everyone who visits your site, helping drive more engagement with your referral program.
Pro Tip: Keep your banners and pop-ups simple, visually appealing, and non-intrusive. They should grab attention without being too overwhelming. Also, ensure they’re mobile-responsive, as many customers will be visiting your store on their phones.
- Include Details in Email Campaigns and Social Media Posts: Get the word out through your email list and social media channels. Promote the referral program regularly so your customers know about the rewards and how easy it is to refer a friend.
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Step 6: Analyzing and Improving Your Program
Finally, analyzing your referral program is necessary. One of the best parts of Joy is its analytics dashboard. Use it to track how well your referral program is performing. Look at metrics like the number of referrals, how many rewards have been redeemed, and how many new customers you’ve gained.
Not all referral programs will take off right away. If you notice that things aren’t moving as quickly as you’d like, don’t be afraid to adjust. Tweak your rewards, change how you’re promoting them, or offer new incentives to get things going.
Why Use Joy Loyalty For Your Shopify Referral Program
If you’re running a Shopify store, the Joy Rewards & Loyalty Program app is your assistant for your referral program, handling all the nitty-gritty details and making the whole process a breeze.
Trusted by enterprises and thousands of businesses of all sizes, here’s what Joy brings to the table.
- It’s user-friendly. Even if you’re not tech-savvy, you can easily set up and manage your referral program with Joy’s premade widgets. The interface is intuitive, and the setup process is straightforward.
- It’s customizable. Want to offer different rewards, create unique referral tiers, or match your brand’s aesthetic? Joy Loyalty lets you do it all. You can tailor the program to fit your specific needs and goals. If you need advanced customization, their developer team will help you do it!
- It automates everything. No more manually tracking referrals or sending out rewards! Joy Loyalty automates the entire process, saving you time and ensuring accuracy.
- It bridges the gap between online and offline channels. Joy works perfectly well with Shopify POS, allowing businesses to let their customers earn and redeem their referral rewards interchangeably in online and in-person stores.
- It integrates with your marketing efforts. Joy Loyalty can integrate with email marketing tools to keep your customers engaged with personalized emails, notifications, and progress tracking. Customers can see their referral activity and rewards, which motivates them to share more.
2 Successful Referral Program Examples
Alright, let’s get inspired by some real-world examples of brands that are absolutely crushing it with their referral programs! Seeing these in action can give you ideas for your own Shopify store.
Google Workspace
Google Workspace referral program is a great example of how a simple, well-executed program can effectively drive new customer acquisition.
What They Do
- Referrers earn cash rewards for every new customer they bring in.
- The referee (new customer) also gets a discount on their first year of using Google Workspace.
- The program uses unique referral links, making it easy for referrers to share with their networks.
What Works
- Double-Sided Rewards. This approach increases participation rates.
- Clear and Simple Process. The steps are straightforward: sign up, share your unique link, and earn rewards when someone signs up using it.
- Valuable Incentives. Offering cash rewards for referrers and discounts for referees appeals to both individual users and businesses. The incentives align with the product’s target audience, which makes the program more attractive.
Samsung Referral Program
Samsung referral program is a masterclass in combining generous rewards with simplicity and brand loyalty.
What They Do
- Samsung rewards referrers with up to $100 in rewards per referral, which can be used toward future purchases.
- Referees (new customers) receive a 5% discount on their first purchase.
- The program is accessible through a unique referral link, which referrers can share via email, social media, or messaging apps.
What Works
- Generous Rewards. High-value rewards like this motivate customers to actively share the program with their networks.
- Double-Sided Incentives. Both the referrer and referee benefit, making the program appealing to both existing and potential customers.
- Simple Sharing Process. Samsung makes it easy for users to share their referral links through multiple channels, such as email or social media. This convenience encourages more participation.
- Brand Loyalty Enhancement. By offering rewards that can only be redeemed for Samsung products, the program strengthens customer loyalty and encourages repeat purchases.
- Clear Communication. The landing page is straightforward, explaining the rewards, how the program works, and the steps to participate. They also have a live chat box to answer questions about their referral program promptly.
Choose The Right Referral Shopify Apps
Setting up a referral program on Shopify doesn’t have to be complicated. With the right preparation and the right apps, you can streamline the process and create a professional-looking program in minutes.
Joy is the best Shopify loyalty and referral app to save you time and ensure your referral program runs smoothly while keeping your customers engaged. It’s the easiest way to grow your business through word-of-mouth marketing!
FAQs
What rewards should I offer in my referral program?
Popular rewards include discounts, store credits, free products, or loyalty points. Choose rewards that align with your target audience and profit margins.
How do I promote my referral program?
Use banners, pop-ups, email campaigns, and social media posts to inform your customers about your referral program. Include clear calls-to-action and easy-to-follow instructions.
How do I track referrals and reward customers?
Referral apps like Joy automate tracking and reward distribution, ensuring a seamless experience for both you and your customers.
Can I run a referral program alongside a loyalty program?
Yes, many apps allow you to integrate referral and loyalty programs for a comprehensive customer engagement strategy.
Is a referral program worth the investment?
Absolutely! Referral programs provide a cost-effective way to attract new customers and increase customer lifetime value, making them a worthwhile addition to your Shopify store.
