Referral Code

Having your own customers to advocate your online store is the most effective way to attract new buyers, 92% of shoppers have more trusts on the recommendations from their peers and family than all types of advertising according to Nielsen’s report . In other words, you can increase sales easily by providing incentives to your existing customers and ask them to refer their friends. In such campaign, referral code is used to identify the referees and reward them.

What is referral code

Referral code or referral number is a unique id for referees to share with their friends and family, these new shoppers can use their referral code to enjoy different kinds of benefits, e.g. discount, free gifts. In addition, the referral code for each referee should be unique so that you can track how the referred customers are being referred.

Referral Code Example

How does referral code work?

If you just create referral code and do nothing, these referral code cannot help you find any new customers, you need to have a good strategy.

Create a referral campaign

Typically, referral codes come from a referral campaign which should aim to optimize something. For example, you may want to boost your online store sales or find more subscribers for your email.

Depends on your goal, you should provide suitable rewards for your referees or new customers they refer to. For instance, you may want to provide free shipping if your referral campaign is to increase the sales, which is one of the major reasons that customers hesitate to complete the checkout process.

Provide referral code to you customers

After deciding the goal of the referral campaign and the rewards, you need to think of how to give your customers the referral codes. These are some common ideas of letting your customers to know about your referral campaign.

  1. 1. If you have an email list of your customers, you can share that piece of information with your customers.
  2. 2. It is also a good idea to add a pop up in your store’s home page, your loyal customers and new customers will notice it!
  3. 3. Whenever there is a new customer who signs up as a member, you include the information of referral program in the welcome email.

Rewards your customers and their friends

Depending on the goal of your referral program, the rewards for your new customers and customers who refer new customers are different. If your goal is to boost the sales, you may email them a free shipping code or a discount code. If you aim to attract more email subscribers, you may send them some free gifts, e.g. handmade stuff, product sample.

Track and measure the campaign

After the referral campaign, you should have more new customers referred by existing customers. To improve your next campaign, you should spend some time to do both quantitative and qualitative analysis.

For quantitative research, you can track how many new customers your existing customers refer to, how do existing customers refer their friends, demographic information of your brand advocates. These pieces of information can help you better prepare next campaign.

For qualitative analysis, you can talk referred customers and customers who refer others by offering them extra incentives for having customer interviews. You can ask them about the whole experience, the rewards of the referral program and other suggestions, these are difficult to quantify.

Referral code v.s. referral link

Referral link is just a URL, new customers will navigate to your online store after they click the link. In general, each referral link has a ID which you can unique identify the corresponding referee, which is similar to referral code.

Referral Link Example

In terms of functionalities, referral code and referral link are the same, your customers can share it with their friends and claim the rewards. In addition, referral code & referral link are both unique for each customer.

Given that Referral link is just a URL, anyone can navigate to your online store by clicking the link, which makes a better experience comparing to referral code that users may need to type it in the form. However, referral link is not portable as referral code, you cannot share it with your friends anytime. For example, you cannot paste a URL in Reddit sometimes or lengthy URL is hard to remember when customers try to share it with their friends offline.

Best practices for referral code

A good referral code can let your customers share their referral code easily with their friends and attract more customers for your store, it should be memorable, clear and meaningful.

Memorable and unique referral code

One of the major advantages of referral code is that your customers can share it online and offline. Your customers may not text their friends the code, they may just tell their friends the code verbally. Therefore, it’s important to make the code memorable.

We suggest a referral code should be between 5 to 15 characters. A short referral code may not be unique enough for each referee while a long referral code makes people hard to remember, thus difficult to share & use.

Avoid misleading characters

Customers will lose patience if they need retry inputting the referral code again and again. A rule of thumb is to avoid some misleading characters. These are some examples:

  1. 1. Zero (0),and O are confusing
  2. 2. Upper case “i” (I) and lower case “l” (l) confuse people too.

Referral code should tell something

Instead of a random combination of referral code, your referral code should be meaningful. Not only because it is more memorable, but it also gives referees good impression. As a result, referees are more willing to share the referral code to their friends.

Conclusion

New customers have more trust on their friends’ recommendation than information you advertise. With proper referral program, you provide incentives for your existing customers to advocate your store and attract new customers. Furthermore, you should customize the referral code to make it easy to memorize so that your customers can share it effortlessly, thus increase your sales.