Set Up a Referral Program for Your Online Store

You are most likely going to trust the opinion of those closest to you, like friends and family. Likewise, your customers will trust the opinions of other people in their lives or online influencers they like.

Consequently, referral marketing is an influential marketing channel, especially if you are a small online business.

Key Takeaways

  • Referral marketing is a persuasive strategy that urges customers to refer new customers to your business.
  • To locate new customers who come in as referrals, you will have to invest in software to trace the referrals and issues rewards if needed.
  • Referral programs rely on word of mouth instead of paid advertising. 
  • It is an effective approach to reducing marketing costs and attract people who will be more likely to make a purchase.  
  • It inspires trust with new customers, so you can get off on the right foot.
  • Establishing a customer procurement budget and building your referral rewards accordingly would be a great start.
  • Great customer support, and an outstanding product or service brings customers back with their friends. 
  • When you can engage your target customers through people who they trust, that will be a bonus for business. 
Setup Referral Program

What is Referral Marketing? 

Referral marketing is an advertising plan that inspires your returning customers to mention your business to potential new customers. In most cases this is done in the form of some kind of reward. 

The Benefits of Referral Marketing 

This strategy can raise brand awareness and can be a fundamental process of your marketing actions. The difference is that it functions on word of mouth instead of relying on paid gimmicks. This is helpful when you are trying to lower marketing expenses, attract buyers with a strong purchase propensity. In short this tactic will give your customers a little more trust at the start of business dealings.  Now that you have an idea of what referral marketing is, let’s explore its multiple facets. 

Direct Referrals 

Getting a good referral from the man on the street is one of the best advertising your business can have. Nothing draws business better than a happy customer. People singing the praises of good service or products they have received have been around since humans started trading. 

This is a cost-effective and impactful way to advertise your business while increasing your customer base. This gives you range to ask your customers and affiliates for referrals. 

Email Referrals

Technology has transformed how companies function and communicate. The biggest changes have taken place after the rise of email. This has opened doors for them to use email marketing. It has been a proven method to reach customers with news, campaigns, and all sorts of important information. Promoting your business via email is not just a popular way to communicate with consumers, it’s also quite effective in initiating sales. 

Reward Based Referrals

What better way to tell others about a business if there’s something in it for you? Reward based referral programs inspires more loyalty in your customers as there is an incentive for them. While business presence has developed online, most companies now provide digital referral rewards.

A fantastic idea would be to start a program that rewards both who give and receive a referral. Not sure what we mean? Let’s explain. 

You can offer a 10% discount to an existing customer for referring someone to your business, and give this very same discount to that customer’s referred friend.

Review Referrals

Reviews of your business, whether you like it or not, are a type of referral. You don’t have to just wait for reviews to pour in. Get the ball rolling yourself and ask customers for a review. Initially your loyalist customers would be keen to give you a few positive reviews. 

On the flip side you might need to get a bit creative. Satisfied customers who haven’t been dealing with you for a long time might need some convincing. A potentially good idea would be to entice these new customers to leave a review in return for discounts or free goods or services. Also, be careful not to wangle your business with paid fake reviews, or ones that are only positive. Search engines have websites available that are designed to sniff out this kind of suspicious activity. They can easily lower your rankings or even remove your accounts.

Reviews might not be the be all and end all in the world of referral marketing, but they are important. It is a useful way to directly, and indirectly, market your brand and build social proof. Finding a better way to market yourself for next to nothing, is quite difficult these days. That’s where reviews and word of mouth are important.  

Cool Ways to Do It

Now that you have a better understanding of what a referral program is, we will show you some great ways to get started. 

Decide On Referral Rewards 

If you are feeling generous and want to reward your customers, you must plan out your budget accordingly. Remember, you have to decide if you will be rewarding your current customer, the referred customer or both.

Instead of a discount, you should consider a small gift instead- for budget purposes obviously. If you are on an extremely tight budget, you should opt to offer the reward only to the customer who has made the referral.

Get With the Referral Program Software

The best way to keep up to date possible customers who enlist in your business as referrals, you will need a specified software to track referrals and issue rewards.

A State-Of-The-Art experience 

The secret sauce to creating a valuable customer experience include effective branding, reliable customer support, and a tasty product or service to trickle your customers.  That is what will leave a lasting impression and get people excited to refer others to your business. 

But don’t stop there. An incomparable ongoing customer experience is also what keep customers returning with one or two friends to join in. Ensuring that they will have an excellent experience doing business with you is a driving factor in getting more sales.

Subtle ways to do this can vary from answering questions satisfyingly to even creating handwritten notes that their orders arrive in. Try to add a special personal touch. A good business takes care of their customers regardless of if they have been there for a long time or have just signed up. 

Set Standards 

The loyalty of your customers emanates from having some kind of bond with your business. This can be achieved by setting certain values, having a quality product, satisfying the customer’s experience or all three of these elements. If you communicate the ethics and standards to your customers upfront and often, the more likely they are to recommend your business. 

Put It Out There

When you have decided what referral program you are going to use, spread the word. Today the best way to do this is by sharing the info on your best marketing channels. This will most likely be your email marketing, or social media platforms.

Another great idea is to promote the referral program from an open landing page on your website.

For Instance, you can put the Saie’s referral landing page in the footer of your website.

Entice Paying Customers

When you start with your referral program, you will attract paying customers to your business almost instantly. Remember, people are likely to buy from you if they have heard good things, or if there is something in it for them.

Think about something new that you have bought recently. Chances are that you have heard about it on social media or read about it online. You obviously decided to try it out and placed your first order. If you are happy with your purchase, you are likely to tell others about it. You will jump at the chance to get others to buy if you get a reward- this is a powertful strategy that’s why we keep repeating it. 

Now it is likely that you have a friend or family member who has been looking for a product like the one you have bought. Perhaps you have been talking their ears of about “how awesome it is”.  They inevitably bite in, and you send their referral link over and they make a purchase. This is a common scenario in referral marketing. So instead of wasting money on ads, you can get more business in, for less, from the people who pay you.

Trust Is Everything

Nothing breeds trust more than getting a referral from a friend. People tend to scroll past social media posts or direct e-mails. However, they are all ears when someone they trust tells them about your business. So likewise, you need to keep your trust meter up as high as possible. Be reliable, express what your business is all about and you will keep gaining the trust of more and more customers. 


A referral marketing program can be a great way to nurture the growth of your business. It is an important method to get customers for a fraction of what you would get when compared to other methods such as advertising. This is a simple way to spread the word of your business naturally.

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