How to Create a Successful Shopify Referral Program in 2023?

While global circumstances have set the stage, the reason behind the eCommerce industry’s uphill stride following the 2000s, is the ease of doing business. Platforms like Shopify have made it easier for any to set up an online store and start making sales - given you’ve the audience’s attention.

Even if you have a great online store or game-changing products, it all comes down to a brilliant marketing strategy that makes you stand out. If you’re pouring your budget into paid advertising, emails, and social media marketing with no significant outcome; step back, take a break, and let your customers do the bidding for you.

Referral marketing has proven out to be one of the most effective ways to draw customers to a Shopify store, foster brand awareness, and increase sales revenue.

The strategy tends to generate 25% more revenue than other marketing tactics, with reinforced customer loyalty and brand awareness. Let’s find out how you can tap organic growth through word-of-mouth marketing and take your Shopify store to the next level.

What is a Shopify Referral Marketing Program?

Before leaning into the Shopify referral program, we need to know what referral marketing is, and how it works in general.

A referral program is a marketing strategy that leverages a brand’s positive image, customer satisfaction, and social connections with its existing user base to attract new leads.

The premise is simple, satisfied customers are asked to recommend a product or service to their friends, compelling them to purchase - in Shopify’s context, it’s referring new customers to your online store.

The only way to uphold a constant stream of new referrals is never to rely on your customers’ intuition. You never know if they’ll recommend you to others even after a positive experience. It’s best to encourage your prospects with incentives in exchange for bringing new leads on board.

Why Start a Shopify Referral Program?

As one of the leading ecommerce platforms, Shopify equips its users with a range of referral marketing tools to streamline their marketing operations. But is the strategy really that important for your eCommerce business?

Even for businesses that do not enact referral programs as a headstart during the launch campaign, it gets crucial once you start to scale and expand your user base.

Today, the cost of acquiring new customers exceeds 5 - 7 times more than retaining them, which makes referral programs your best shot at fostering healthy customer relationships. Need better convincing? Here are some benefits of a Shopify referral program:

Boost Customer Acquisition

In a referral marketing campaign, you’re not merely addressing your primary audience segment - it has a much more expansive outreach. By propelling your current customers to refer their friends and families inherently tap their social connections.

With trust and reputation attached, friendly referrals are highly likely to convert into paying customers which may further recommend you to others, building a chain of fresh customers.

Improve Sales Revenue

While the concept is as simple as a proportional relation - the bigger the customer base, the higher the sales revenue - a referral program offers something more. Apart from fostering relationships with existing customers to encourage repeat purchases, referral marketing also helps kickstart new relationships on a positive note.

Referred customers are more loyal and profitable than non-referred customers. People who join in through a friendly recommendation, inherit their trust in your brand which compels them to stick longer. Referred customers exhibit a 16% higher lifetime value than ones acquired through other means, which eventually contributes to a higher ROI over time.

Build a Positive Brand Image

Customers who refer you to others are essentially vouching for your quality and credibility. Like any endorsement, they are inherently putting their reputation on the line to give your store a glowing recommendation.

As a business owner, make sure you stay true to such claims to establish long-standing ties with new leads. As more customers participate in your program and give your Shopify store shoutouts over the internet, it adds to your stature in the market and puts you in a positive light.

How to Create a Referral Program on Shopify Store?

Referral programs works by incentivizing a company’s existing user base to promote its products and services within its social circles. Each participant is allotted a unique referral link which sets them up for referral reward, whenever a new customer joins using that referral code.

Given the extent and complexity of the campaign, manual administration is often overruled. Most Shopify businesses employ referral program software to simplify and streamline all processes from targeting prospects to sending rewards. But before you leave it to automation, you need to craft a referral strategy personalized to your Shopify store.

Pick a Referral App

For any business to expand, it must actively invest in marketing campaigns that target a wider user base. Stop relying on organic referrals but rather implement an automated referral system to smoothen your campaign operations. In terms of a Shopify store, the platform offers third-party referral apps that help set up a referral program.

Between the tons of referral apps available on the Shopify app store, choosing the right one for your business requires more than guesswork. Shortlist apps based on your business objectives - What do you want to achieve? Is it increased sales, brand awareness, customer loyalty, or something else? Make sure the app you’re choosing supports some of the following functionalities:

• Personalized rewards: As the business owner, you should have a complete say on the rewards you want to offer (e.g., discount code, store credits, cash), and the app you’re going with must support that.
• Referral Tracking: The app should allow you to set up and assign unique referral links to every participant and track incoming leads on a live dashboard accordingly.
• Integration with Shopify: For hassle-free management, the app must seamlessly integrate with your Shopify store and other tools you use.
• Mobile-friendliness: A big percentage of your customer base would access your store via mobile devices, so make sure the referral app is mobile-centric to accommodate them.
• Email notifications: The app should allow marketers to send personalized email notifications to potential customers and referrers every now and then.
• Customer support: Check if the app has good customer support and comprehensive documentation to assist you in setup and troubleshooting the program.

Once you pick the best referral app, install it on your Shopify store depending on the app’s instructions.

Customize Your Referral Program for Shopify

There’s no one-size-fits-all approach to marketing. Even if you try to emulate a brilliant success story, what worked for others may not work for you. For a referral program to reap your true benefits, it must be accustomed to your brand, resonate with your target audiences, and achieve your specific business goals.

Your program should look and feel like an extension of your online store, reinforcing your brand's image and values to a mass audience. Customize it in a way that fulfills your specific business goals, whether it’s increased sales, higher customer retention, or improved brand awareness.

Referral apps for Shopify, in general, support customization, allowing marketers to restructure the program’s terms and conditions, select incentives, and finalize their promotion strategy.

Pick an Attractive Incentive

Despite their love for your business, customers need incentives to actively endorse your products. The right reward should intrigue your customers to participate, making sure your advocacy is their top priority. Pick a reward that provides value to customers while still being financially sustainable for your business. Some popular referral rewards for Shopify business are:

• Discounts: Offer a percentage or fixed amount off future purchases.
• Store Credits: Provide credits that can be used within your store.
• Cash Incentives: Pay referrers in cash or gift cards.
• Free Products: Give away specific products as rewards.

Define Referral Terms and Conditions

Unlike other marketing strategies, referral programs are inherently transactional - customers are compensated with rewards in exchange for bringing you new customers. To keep a referral transaction transparent and smooth you need two things; a seamless and intuitive user interface and clear terms and conditions.

Outline who is eligible to participate in your program. How they can participate? What’s regarded as a successful referral? When and how the rewards will be processed? Implement strong measures to prevent referral fraud, making sure each and every referral is legitimate.

Conduct Beta-Testing Before Launch

Before your referral campaign goes mainstream in the public, it’s wise to take a trial run in a controlled environment to ensure everything goes smoothly for the big day.

Allow access to your program for a small group of testers from your target audience that includes loyal customers, partners, or affiliates. Make sure they can access all features and functionalities of the program you intend to offer in the final version.

Encourage them to try out various scenarios, such as referring friends, generating unique referral codes, making test purchases, and redeeming rewards. This will help uncover potential issues and ensure the program functions as expected in real-world situations.

Launch the Shopify Referral Program

Once you get the green signal from beta testers, start prepping for the launch event. The success of a referral program often depends on how well-executed or spectacular the launch is.

To build up anticipation and hype for the launch day, it’s best to announce it in advance on your social media handles, landing pages, and emails. Try offering special limited-time offers on the launch day such as an extra discount, early access, or exclusive bonuses to spark interest and tap the virality effect.

As your referral program gains traction, collect and display success stories and testimonials from participants who have benefited from the program. The social proof will add to the hype and ensure credibility, encouraging more people to join.

3 Effective Ways to Promote a Shopify Referral Program

Aspire for a massive turnout for your referral program? Advertise it enough so it reaches every prospect that may want a share of their reward and possibly place a purchase order.

While there are tons of marketing outlets today you can use to spread positive word of mouth, prioritize the channels your audience is most active on. Shopify business owners typically rely on these three ways to drive participation and improve referral count:

Email Marketing

While other promotional outlets specialize in propagating your brand message, emails provide a more direct medium of contact between a brand and its customers. Through a perfectly crafted email, marketers can now present their referral offers directly with a higher chance of impact.

Around 23% of referrals come from emails, making it the second most potent channel to advertise your program. Make sure your emails are tagged with compelling subject lines - "Unlock Rewards by Referring Friends" or "Earn Discounts for Sharing" that draw the prospect’s attention at first sight. Embed a CTA or referral link in the body enabling people to join right after.

Social Media Marketing

Given its remarkable penetration, social media is now employed by over 93% of marketers to advertise their brand offerings. The medium can popularize your campaign message to the target audience in the same way.

Leverage popular social platforms like Facebook, X (Twitter), Instagram, and most importantly, networks your prospects frequent the most. Design posts with eye-catching visuals and graphics and label them with persuasive copy, highlighting the features of your program to invoke interest.

Website Promotion

If you’re running a referral program, make sure your website flaunts it to every incoming visitor. Even if you have a dedicated referral landing page, consider adding banners or pop-up widgets on your homepage to educate visitors that channel into your Shopify store from Google search results.

Promote your referral program at every chance you get. Mention it during the checkout process, in and on order confirmation pages to capture customer attention at critical moments - and if that doesn’t work, send notification emails to grab attention.

Tips to Choose the Best Shopify Referral App

The Shopify app store is teeming with referral apps, each tackling a genre of businesses. To find your ideal fit, keep the following tips in mind:

• Outline your Business Goals: Every step regarding your marketing campaign should taken in accordance with your business goals. Whether it’s propelling brand awareness, maximizing sales, or expanding your customer base, pin down your primary objective and select an app that is best suited to accomplish them.
• Keep the Budget in Mind: As one of the most cost-effective marketing strategies, referral programs generally favor startups with limited budgets. However, automated referral apps do come with a price package. Mark your advertising budget before you start shopping around.
• Build Consumer Personas: While curating your marketing strategy, it’s necessary to pin down your ideal customer. Segment your audience based on their preferences, buying behavior, and average spending to figure out how likely they are to participate in your referral campaign. Target your potential customers with rewards that are most appealing to them.
• Look for Features You Need: Find out the type of referral rewards your audience is most interested in. Is it a discount, a free product, or a cashback? Similarly, identify channels of connectivity they’re most comfortable with and integrate them into your landing page for better outreach.
• Integration Permissions: In order to keep your program operations seamless and transparent, institute an app that is most compatible with your Shopify store. This will not only simplify management but also help you scale your business.

Closing Note

The growing popularity of referral marketing has compelled businesses big or small to incorporate it as their primary customer acquisition strategy. As a Shopify store owner, empowering existing customers to attract new leads can be a powerful way to build your user base, without spending huge financial capital.

The crux of the matter is that you need a credible and efficient referral app on your side to kick off a Shopify referral program. With that covered, you can start targeting your prospects, share rewards, and measure the overall performance of your program. Prefinery.com comes with all the necessary functionalities to successfully launch and run your referral program.

FAQs

Can I run a referral program for my Shopify store?

Yes, absolutely. You can run a referral marketing campaign to boost your Shopify store. Download and install the right referral app that suits your business, curate appropriate referral rewards, define program terms and conditions, and set up a tracking system to manage your campaign.

How do I set up a payment gateway for my Shopify store?

A payment gateway is necessary for businesses to receive credit card and electronic transactions for every sale made. Shopify businesses use point-of-sale (POS) systems to process all kinds of in-store and online payments. Shopify harbors over 100 different payment gateways you can integrate with your business.

How can I promote my Shopify referral campaign effectively?

Shopify store owners can now promote their referral campaigns via email marketing, social media posts, and website ads. No matter what channel you prefer, start your message with the referral offer - what you’re offering as a reward in return. Make sure you highlight the eligibility criteria for participation so only interested folks can channel in.