What is a referral program?
Referral programs, also known as Refer-a-friend programs, are a word-of-mouth marketing strategy designed to help businesses incentivize the existing customer base to refer their friends and family.
These programs are meant to encourage customers to share information about your brand, product, or service, usually in exchange for rewards. Essentially, a referral program can help your business build customer loyalty, generate revenue, and expand your existing customer base.
To implement a referral program alongside WooCommerce Subscriptions, you need to find the right WooCommerce referral plugin for your e-commerce business. WooCommerce Refer a Friend PREMIUM plugin helps store owners create a referral program that integrates seamlessly with the WooCommerce Subscriptions plugin, offering a new set of opportunities designed to expand the existing subscription program referral program recurring rewards.
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Setting up a Referral program with a WooCommerce Refer a Friend plugin
If you are looking for a simple yet powerful referral plugin that doesn’t require too much maintenance, look no further – WooCommerce Refer a Friend plugin will take care of everything for you. This includes an automated fraud prevention system, which is one of the major advantages of this referral plugin.
The only maintenance you WILL have to do is during the initial setup of the referral program. After that, you may only need to make a few tweaks to make sure that your referral program is working according to your expectations.
To make sure your customers get a wide range of rewards, WooCommerce Refer a Friend plugin offers rewards for the advocate (referrer) and their friends (the person they referred to your store).
You can reward advocates with the following coupons:
- Cart discount
- Percentage discount
- Product discount
- Percentage of order
- Recurring product discount
- Recurring product % discount
- Sign-up fee discount
- Sign up fee % discount
These are the coupons that can be given to the referred customer (also known as friend):
- Cart discount
- Cart % discount
- Product discount
- Percentage of order
On top of that, you can give out Free shipping as a reward.
To set up a free shipping coupon reward, you just need to set the coupon amount to 0 and tick the Free shipping checkbox on either the advocate or friend reward, as shown below.
Reward your existing and new customers
This referral plugin allows you to give out rewards to your existing customers AND new customers in several different ways:
Reward only advocates – you can choose to reward only advocates who bring in new referrals
Reward only friends – you can choose to reward only friends who come via the advocate referral link or code
Reward both advocates and friends – if you’d like, you can choose to reward both advocates and friends;
- advocates for bringing in a new referral who made a purchase
- and new referral (his friend) for shopping at your store
There are a lot more settings that can help you fine-tune your program to not only show your appreciation to the existing customer base but to make sure that your customer base is expanding at a steady rate, as well.
Benefits of WooCommerce Subscription
What is a subscription business model?
A subscription model, also known as a subscription program or a premium loyalty program, offers a way for customers to pay a recurring fee in exchange for products and/or services they receive on a predetermined schedule. These models allow customers to subscribe to a product or a service they need, and in turn, the business provides a lower product cost and more convenience in terms of payment.
Over the last few years, subscription models have become very popular and important for businesses, as they help increase customer retention and loyalty while creating a reliable income stream and capturing more residual revenue.
And that is where the WooCommerce Subscriptions plugin comes in.
This premium WooCommerce plugin helps businesses create subscription programs by selling products and services with recurring payments. These recurring payments can be done daily, weekly, monthly, or yearly. And if you want to have a custom schedule, you can do that, as well.
WooCommerce Subscriptions plugin simplifies the logistical aspect of recurring payments but also brings new opportunities for businesses to build long-lasting relationships with their customer base.
The plugin supports over 30 different payment gateways for automatic recurring payments that offer basic and advanced features.
- Basic features allow for subscription suspension, subscription cancellation, and subscription reactivation
- Advanced features allow for multiple subscriptions, recurring total changes, and payment date changes
Please note that certain payment gateways don’t support some of the Basic and/or Advanced features. Visit WooCommerce Subscriptions – Payment Gateways for more details.
Subscription-based programs that offer recurring discounts come with several benefits, such as improved customer lifetime value, increased customer loyalty and customer retention, competitive edge, and of course, a bit of a boost in sales and conversions.
Let’s break down those benefits.
Improved customer lifetime value
One of the most important metrics in e-commerce is CLV, also known as customer lifetime value. A good subscription program can encourage your customers to stay subscribed for longer and purchase more products or services – this maximizes the generated revenue per customer.
Not only that, but an improved customer lifetime value can boost your sales and bring in profit you can use to acquire new customers.
Increased customer loyalty and customer retention
The backbone of every subscription program should be customer loyalty. There would be no subscription program without your customers, so a good set of recurring discounts can play a significant role in nurturing the relationship with your customer base.
The more loyal customers you have, the higher your customer retention is. Nevertheless, you shouldn’t expect your customers to stay with your brand just because they’re loyal. Retention also depends a lot on the recurring discounts you offer.
For example, discounts on subscription renewals provide an incentive for existing customers to remain a part of your customer base. When you offer constant and appealing discounts, your customers are more likely to engage with your brand, which creates a sense of loyalty and trust.
In turn, your customers will keep purchasing products from your brand, instead of exploring your competitors.
Boost in sales and conversions
Lower initial costs or exclusive discounts (usually for the first month) can be a powerful incentive for new customers to try out your products and eventually join your customer base. Compelling discounts remove that entry barrier, which can result in a significant boost in sales and conversions.
Think of it this way. The discounts your subscription program offers are a call to action for all customers. And if you have discounts tied to a specific subscription tier or a time-limited offer, you will definitely see an increase in sales and conversions.
Capturing residual revenue
Recurring discounts can help you capture residual revenue, which in turn helps you make better plans regarding your business.
The e-commerce market is saturated with different types of loyalty programs, such as points programs, tiered programs, referral programs, and subscription programs. Having a brand that stands out in any of these is not easy to achieve, but it is essential to try and give yourself a competitive edge.
A great way to achieve that is through recurring discounts which make your subscriptions cost-effective and appealing to customers.
You see, a good subscription program leads to improved LCV, increased customer loyalty and customer retention, and a boost in sales and conversion. It can also give you a competitive edge, but that largely depends on how attractive your recurring discounts are.
Look at it this way – great recurring discounts create satisfied customers. Satisfied customers are loyal customers and will make repeat purchases at your store. This leads us to a very important benefit of having recurring discounts – word-of-mouth marketing.
Your marketing can’t get any better than this. Why?
Well, according to Nielsen’s report, “92% of consumers are more likely to trust recommendations from friends and family, above all other forms of advertising”. So why not try to create recurring discounts that will make your customers happy AND boost your sales and conversions?
Which discounts to consider
WooCommerce Subscriptions plugin offers different ways to incentivize customers to sign up for your products or services, and make recurring payments. You can offer your customers Sign-up and Recurring discounts, both of which come with a set of perks.
Sign up discounts
This type of discount is good to help customers interested in your products or services save money by giving them a lower entry barrier. Additionally, WooCommerce Subscriptions plugin offers a trial opportunity and if you combine a sign-up discount with a trial period you help your customers try out your product or service without a substantial financial commitment.
Additionally, customers see sign-up discounts as added value, which makes them think that they are getting a better deal – a win-win situation for your brand and your revenue.
If you want to make your subscription program more appealing, introduce recurring discounts. This type of discount directly translates to cost savings for your customers as it makes long-term subscriptions more affordable.
It also provides an incentive for your customers to stay subscribed knowing they will keep getting discounts for as long as they use your products. And just like with the Sign-up fee discounts, you can add a trial period so your customers get to try your product without making too expensive of an investment.
Recurring discounts are also good for customer retention and increasing customer loyalty. The more value your customers see in their subscription, the more likely they are to stay with you – resulting in a stable customer base.
The same goes for their loyalty – customers who stay longer with your brand become more engaged and are more likely to recommend your products or services to others. Together, customer retention and loyalty bring higher customer lifetime value, which is a critical metric for the profitability of your business.
So, should you go for Sign-up fee discounts or Recurring discounts?
This depends largely on the setup of your subscription program, and it does take a bit of tinkering until you figure out what works best for your store, but we definitely recommend integrating Recurring discounts.
Next, we’ll discuss how you can additionally improve your customer engagement and gain a competitive edge that will help you stand out in the market.
Using a Referral plugin with WooCommerce Subscriptions
Over the last few years, referral programs have become one of the most powerful marketing tools for e-commerce businesses.
Well, unlike subscription programs or points programs, referral programs are not really meant to incentivize repeat purchases. They are meant to expand your existing customer base by bringing in new customers through referrals.
That is why businesses usually combine them with other programs, such as Points or Tiers – or in our case, with WooCommerce Subscriptions.
If executed right, this combination can bring you a lot of new customers without spending too much money on customer acquisition through traditional marketing.
Setting up WooCommerce Subscriptions
Once you have the WooCommerce Subscriptions plugin installed, navigate to WooCommerce > Settings, and select the Subscriptions tab.
Here, you will be greeted with a number of options that may seem daunting at first, but everything is laid out nicely and designed to help you fine-tune your subscription program.
These are the options WooCommerce Subscriptions allows you to adjust.
- Define the Cart button text and Place order button text
- Choose what role a customer gets when they subscribe to a product and what role they get once their subscription becomes inactive
- $0 initial checkout – ticking this checkbox allows $0 initial checkout without a payment method
- However, the customer will be required to provide a payment method at the end of the initial period to keep the subscription active
- Drip downloadable content – ticking this checkbox grants access to new downloadable files added to a product only after the next renewal is processed
- By default, customers with active subscriptions for a product will be granted access to newly added downloadable files
- Customer suspensions – set the number of suspensions per billing period
- Set it to 0 to turn it off completely
- Mixed checkout – ticking this checkbox allows for purchasing multiple subscriptions and products at the same time
- Multiple subscriptions take place with customers subscribe to several simple subscription products or variable subscription products
- Retry failed payments – ticking this checkbox will enable automatic retry of failed recurring payments
- Manual renewal payments – ticking this checkbox will accept manual renewals
- However, customers’ subscriptions will be put on hold until they log in and pay to renew it
- Auto-renewal toggle – ticking this checkbox will allow customers to turn on and off automatic renewals directly from their View Subscription page
- Early renewal – ticking this checkbox will accept early renewals before the expiration date
- You can also accept early renewal payments through a modal, if you choose to do so
- If you would like to align subscription renewals to a specific day of the week, month, or year, tick the checkbox that says Synchronise renewals
- If your store offers tiered subscription, you can allow customers to upgrade or downgrade between different subscriptions
- You can also allow switching between Subscription variations and/or between Grouped subscriptions
- Woocommerce Subscriptions plugin also allows you to:
- Prorate recurring payments
- Prorate Sign-up fee
- Prorate Subscription length
- Change the Switch button text
Creating a subscription product
Once your settings are dialed in, you can move on to creating your first subscription product.
By enabling WooCommerce Subscription, you gained access to two additional Product types:
- Simple subscription – this allows you to have a subscription to a single product
- Variable subscription – this allows you to have a product with multiple subscriptions, based on variations
Now, regardless of which product type you choose, you will have the following options to set up:
- Subscription price – which can be a recurring cost on a daily, weekly, monthly, or yearly basis
- Expire after – depending on the recurring cost time, you can set the expiration to expire after X days, weeks, months, or years
- you can also set it to Never expire
- Sign-up fee – if your subscription product has a sign-up fee, you can add it here;
- This fee will be charged immediately, even if the product has a free trial, or if the payment cycles are synced (refer to Synchronization within the Subscriptions tab)
- Free trial – you can let your customers enjoy a free trial for an X amount of days, weeks, months, or even years
- Sign up fee will be charged at the outset of the subscription
- The trial period can’t exceed 90 days, 52 weeks, 24 months, or 5 years
Setting up the WooCommerce Refer a Friend plugin
So, how do you combine WooCommerce Refer a Friend plugin with WooCommerce Subscriptions?
After you install the WooCommerce Refer a Friend plugin, navigate to WooCommerce > Settings, and select the Refer a Friend tab. You will be greeted with General options that will help tweak the behavior of your referral program.
NOTE: We will skip the General options the purpose of the article, but if you are interested in learning more details about it, please refer to our documentation, section General options.
Once you are done tweaking the General options to your liking, you can continue setting up the Coupon settings.
Below is a quick overview of available Coupon settings:
Under the Coupon Type dropdown, you can choose between:
- Cart Discount
- Percentage Discount
- Product Discount
- Percent of Order
- Recurring product discount
- Recurring product % discount
- Sign-up fee discount
- Sign-up fee % discount
NOTE: We recommend using standard coupons such as product discount, cart discount, or percentage discount unless you want to give a Sign-up discount or you want to give a discount for a specific number of months. For example, 3-4 months after a person refers their friend, even though the latter is named “Recurring Discount”, its only difference is that it gives a discount for a specific number of renewals.
Next, you can set up your Coupon amount. This amount can be a fixed value applied to the total amount in the cart or a percentage off the total amount in the cart.
Active for X Payments
This option means that if your customer is using a Recurring product discount type, the coupon will be limited to the given number of payments. It will also be automatically removed from the subscription.
NOTE: In this case, “Payments” includes the initial subscription payment (sign-up fee).
Other Coupon settings
Once you’re done with the recurring discount setup, there are other Coupon settings you can adjust to your liking. Those settings include the following:
- Products – determine which products offer a recurring discount
- Exclude products – determine which products don’t offer recurring discounts
- Product categories – you can have an entire product category (or several) set to a recurring discount
- Exclude categories – if you have all categories included in a recurring discount, you can exclude one or more
- Coupon duration – how many days a coupon should last
- Leave empty for no expiration
- Minimum order – define the minimum order subtotal for the coupon to work
- Individual use – ticking this checkbox means that the coupon can’t be used in conjunction with other coupons
- Exclude sale items – ticking this checkbox means that the coupon shouldn’t apply to items on sale
- Free shipping – tick this checkbox and set the coupon amount to zero to offer Free shipping as a reward
- Limit usage to X items – the maximum number of individual items this coupon can apply to when using product discounts
- Leave blank to apply to all qualifying items in the cart
- Generate coupons on every nth referral – by default, coupons are generated on every referral order
- For example, to generate a coupon on every third referral, add 3 into the input field
- Leave empty for the default setting, i.e. generating coupons on every referral order
For more details on each of the settings, please refer to our documentation, section Coupon settings.
Setting up different discount scenarios
Refer a friend for WooCommerce also allows you to do the following:
- Discount the advocate only once
- Discount both advocate and a friend once
- Discount the advocate for as long as their friend is subscribed
The last feature does require a bit of tinkering, but you can refer to our documentation, section WooCommerce Subscription – Recurring rewards, for more details.
To make the most out of your subscription program, we suggest you use WooCommerce Refer a Friend plugin in conjunction with the Recurring discounts offered by the WooCommerce Subscriptions. Admittedly, we are somewhat biased because this particular referral plugin is an in-house product, but it works so well with WooCommerce Subscriptions.
Combining these two plugins can offer a unique advantage for both your customers and your business. Referral programs encourage your existing customer base to refer your store to their friends and family, while recurring discounts incentivize existing and new customers to sign up for subscriptions.