How to Build a Referral Program on Your Shopify Store?

Now with platforms like Shopify, setting up shop has gotten way easier than a typical brick-and-mortar store. To truly stand out and gain the appreciation your startup deserves, it all boils down to how you present your brand to the audience.

Compared to a banner ad or social media snippet, a friendly recommendation regarding your brand is more likely to change opinions. Consumers value authenticity, personal connections, and the opinions of their peers over a sponsored advert - and that’s where having a Shopify customer referral program would come in handy.

A referral program empowers your existing customers, who are already fans of your brand, to become advocates and promoters. While it taps into high-quality leads who convert, you can also invoke loyalty into existing ones, and perhaps forge a healthy community of enthusiasts.

Surprisingly, Shopify itself only offers affiliate programs. Instead, business owners have to rely on third-party referral marketing apps to expand their networks. If you’re preparing for a new product launch, here’s how you can create a referral program for your Shopify store.

Why Run a Shopify Referral Program?

As the choices grow and scamming takes new forms, consumers have grown skeptical of online shopping, especially from a brand they have never heard of. The only way lesser-known brands can break through the noise and gain the trust of their respective audience is by letting their current followers do the bidding for them.

A well-executed referral program contributes to cultivating a positive and reputable image for your brand. Your current followers become your brand advocates. As they refer your products to their networks, you gain access to a wider audience.

This organic growth is driven by the trust that your advocates have built with their connections, making it far more effective than traditional advertising. Let’s count some concrete benefits you can achieve by setting up a referral marketing program:

• Higher Conversion Rates: Referred customers are primed for purchase because they are entering your store with a pre-existing positive perception of your brand, courtesy of the recommendation. The inherited trust leads to quicker decisions and a 4x times higher likelihood of making a purchase.
• Cost-effective Marketing: Where traditional marketing requires sponsorships and costly partnerships, referral program needs zero upfront costs. You only reward customers when they bring in a new lead which is often in-house credits, compelling new customers to stay aboard.
• Amplified Reach: A satisfied customer will spread the word about your brand in social circles and networks outside your target audience. If your brand appeals to the incoming customer, it will lead to a chain reaction of referrals from places you may not have originally anticipated.

How Does a Shopify Referral Program Work?

Like any eCommerce store or brand, the Shopify referral program incentivizes existing customers to refer its products or services to their network in hopes of accessing new leads - that is if you incorporate a third-party referral app. To help you understand, here’s a breakdown of all the key steps in a referral marketing campaign:

• Install and integrate the chosen app with your Shopify store. Follow the app's instructions to configure the program according to your objectives.
• Register your existing customers (referrers) through a dedicated portal on your website that typically asks for contact information and email addresses.
• The app generates unique referral links for each registered referrer. These links are tied to the referrer's account and are used to track the referrals made.
• When a prospect clicks on the referral link, they are directed to your store’s website/landing page. The Shopify app tracks their activity (sign up or purchase) and ties it to the referrer's account.
• The referrer is notified of their reward, and it is typically issued as store credits, coupon codes, or direct payments, depending on your program settings.

6 Steps to Creating a Referral Program on Shopify

Given the scale and magnitude of a referral campaign, relying on human supervision alone is a no-go. Most Shopify stores and even startups, use referral marketing software to automate all referral processes from tracking referrals to ascribing rewards. But to ensure things go according to plan, here’s how you can start a referral program for your Shopify store.

Highlight Your Campaign Goals

Referral programs are forged around key business goals and objectives, and not the other way around. What you want to achieve with your campaign - increase in sales revenue or expanding customers - sets the criteria for how the referral strategy should be planned out.

If your primary goal is to drive repeat business, you can offer rewards that encourage current customers to bring back repeat business. Or if you want to expand your customer base, you can use FOMO tactics to cash the virality effect. Not to mention, an objective-driven program allows you to allocate your resources more efficiently.

Choose a Referral App

Despite being a popular eCommerce platform, Shopify still integrates a referral program in its database. While it does support an affiliate marketing program, it is out of bounds for eCommerce customers who are set to be the main advocates for your shop. To leverage word-of-mouth marketing, Shopify marketers take to third-party referral tools which include:

• Look for an app that allows you to customize the program’s design, rewards, and messaging to match your brand's outlook.
• The app should offer flexibility in defining the rewards (discounts, store credits, or freebies) you provide to the program participants.
• It should generate and allot unique referral links to referrers to help track and attribute referrals correctly.
• Since most shoppers tune in through smartphones, make sure the app is mobile responsive and user-friendly.
• If you plan on leveraging email marketing, the app you choose should integrate your email platform to seamlessly communicate with prospects.

Personalize the Program to Your Shopify Brand

While it's tempting to look at successful referral program stories and try to replicate them, it's important to remember that what worked for one brand or business may not yield the same results for you.

Every brand has a unique audience with distinct preferences, buying behaviors, and communication channels they use. As a marketer, it’s your job to draft a program outline that resonates with the audience in terms of the rewards you offer or the manner you communicate.

An audience-centric program reinforces your brand’s identity and creates a consistent customer experience. When customers feel that the program caters to their preferences and rewards their loyalty, they are more likely to become active advocates for your brand.

Pick Attractive Referral Incentives

Loyal customers are always ready to put in a good word for your brand. But a handful of those won’t be enough to pump your lead generation channels. To ensure widespread and more engaged participation from your audience, you need to introduce attractive rewards that ensure your advocacy remains their prime agenda.

In a market where many brands offer referral programs, the allure of attractive rewards sets you apart from the competition. It makes your program more enticing, increasing the chances of customers choosing your brand to advocate for.

The right reward would compel them to put in more effort to refer their friends, family, and associates to your brand. While it depends on your business niche and the audience you’re addressing, some impressive referral incentives may include:

• Discounts Codes and Coupons: Offer a percentage discount or a fixed-dollar amount off a customer's next purchase.
• Store Credits: Provide customers with store credits they can use for future shopping.
• Cash Rewards: Offer cash incentives or PayPal transfers as referral rewards.
• Free Products or Samples: Reward referrers with a free product or samples from your catalog.
• Exclusive Access on early releases: Grant referrers exclusive access to new product releases or early-bird discounts.

Set Program Terms and Conditions

Anything that involves a transaction between two parties needs to be transparent. In terms of referral marketing where customers are rewarded for bringing in new leads, you must ensure there is not a shred of inconsistency or vagueness in the program.

On your landing page, state the rules and conditions for program participation. Define how customers can participate, generate their unique referral code, what qualifies as a successful referral, and how the incentives are rewarded.

The clearer and bolder your terms are, the easier it will be for potential customers to trust you.  When customers are uncertain about the program's details, they may hesitate to participate, or worse, they may feel deceived if they encounter unexpected terms after making referrals.

Test, Launch, and Monitor

One may imply that a referral campaign should be introduced side-by-side with your product launch, but it’s rarely the case. Marketers launch their referral program weeks in advance of the main launch event in order to build up hype and tap into maximum leads by the time of launch.

Start posting teaser images on your social media profiles and sending pre-launch emails to the target audience to invoke curiosity and interest in your launch. If it’s your first time running a referral campaign, feel free to conduct beta tests to assess the audience’s response and make improvements based on their feedback.

Closing Note

If you wish for a massive turnout on your Shopify referral program ahead of the launch, publicize it enough so it reaches every prospect who may be interested in your product or at least have an appetite for the reward.

With the product in hand and the target audience highlighted, all you need is a referral app to set up and launch your campaign. If you are new to the business, get in touch with Prefinery to sort your pre-launch marketing from start to end.

FAQs

What benefits can a Shopify referral program bring to my business?

A well-executed Shopify referral program can bring several benefits to your business, including increased lead generation, customer acquisition, enhanced brand loyalty, and the creation of a self-sustaining cycle of advocacy.

Can a Shopify referral program work for any type of business?

Shopify referral programs are versatile and can be adapted to various types of businesses, from e-commerce to subscription services. As long as your campaign is relevant to your brand image, target audience, and latest trends, you will have a thriving product launch.