Store owners are always looking for new ways to connect with their customers. Some invest in paid ads in an attempt to expand their reach, while others run email campaigns to engage with their audience. However, no matter the approach, connecting with customers usually comes with a cost.
To minimize these expenses (or even avoid), store owners are turning to more cost-effective solutions, such as referral programs. These programs help them use the established trust to connect with customers more organically.
Additionally, referral programs allow store owners to build stronger relationships, maintain loyalty, and expand their customer base without actually breaking the bank.
So, if you run a store on WooCommerce and you’re trying to find the right WooCommerce referral program plugin for your business, you’ve come to the right place.
In this article, we’ll explain the importance of referral programs and show you how to set one up for your own business.
Table of Contents
What are referral programs?
In a nutshell, referral programs are an effective marketing solution that helps businesses encourage their existing customer base to recommend their products to friends and family.
Here’s an example of how a referral flow works:
A happy customer comes to your store, makes a purchase, and then refers your store to a friend by sharing a unique referral code. By completing this process, they become an advocate of your store and brand.
When their friend visits your store and makes a purchase, they get a discount on their first order. As soon as the friend’s transaction is completed, the advocate receives a reward – it’s as simple as that. Both customers are rewarded and your customer base is successfully expanded.
Types of referral reward
Double-sided rewards: The flow we described above is referred to as the double-sided reward. In our experience, this approach works best for referral programs because both the advocate and their friend are rewarded for engaging with your store, creating a win-win situation that encourages more referrals.
Single-sided rewards: On the other hand, we also have the single-sided reward, where only the advocate receives a reward for referring their friend – while the friend doesn’t receive anything. This approach can be effective for niche markets but ultimately depends on the store owner’s strategy and target audience.
Does every store need a referral program?
The short answer to this question is – no. Not every store needs a referral program. Some stores can benefit from a Points & Rewards program or a full-on Loyalty Program – it all depends on the market you are in.
That said, running a referral program often makes sense as a cost-effective way to grow your business and it’s usually the best program to get started with. It allows you to keep the referral flow simple and in return, your satisfied customers spread the word about your business.
Here’s a good, and quite famous, example from Harry’s:
Before referral programs even became popular, Harry’s created Harry’s Shave Club – a referral that offered free products in exchange for referrals. It was a simple program that skyrocketed their business and made them the pioneers of referral programs.
Nowadays, Harry’s Shave Club offers double-sided rewards, where the advocate gets $5 off their next order for every new customer they refer, and the referred friend gets $5 store credit. As we’ve mentioned earlier, referral programs are effective because they’re simple.
Research shows that customers who come through referrals are 37% more likely to stay with your brand compared to those who find your store the traditional way.
To summarize, not every store needs a referral program, but a good referral program can help boost trust among your customers and change one-time shoppers into long-term brand advocates.
How to start a referral program for your website
Store owners often feel overwhelmed when they read about referral programs (or any other program for that matter), but the truth is, it’s easier than it seems. Below are six simple steps to help you get started.
Step 1: Define your strategy
Even before you get started with your referral program, you need be clear about your goals. Boosting sales is often the most important thing for most store owners, but it shouldn’t be the only focus.
To build a successful and sustainable referral program, you need to think long-term. Think about how you can enhance customer engagement and grow your customer base.
By setting strategic goals beyond immediate sales, you can create a program that drives ongoing loyalty and organic growth.
Step 2: Use reliable solutions
Now that your goals are defined, the next step is to find a reliable WooCommerce referral plugin. As you explore different options, you’ll come across many solutions that offer a wide range of features.
However, more options don’t always mean better results.
Overly complex solutions can be time-consuming to set up and manage, increasing the risk of errors that may go unnoticed. What you need is a simple solution such as Refer a Friend for WooCommerce PREMIUM. It’s a simple referral program that streamlines the process and helps you increase sales by turning customers into advocates.
WooCommerce Refer a Friend PREMIUM helps you keep your referral program simple, yet powerful and effective.
Step 3: Select the right rewards
Depending on the referral solution you go with, you will most likely have the following options:
- Fixed cart discount
- Percentage discount
- Product discount
- Free product
- Free shipping
To determine what works best for your store, you need to know your audience. Choose rewards that resonate with their preferences and help motivate them to participate. This will ensure your referral program drives maximum engagement and conversions.
Step 4: Simplify the process
It goes without saying that your referral program should be easy to understand and participate in. Make sure not to create complex instructions that can push customers away from your store.
Keep your instructions simple by allowing customers to get their referral codes quickly and share them easily. And lastly, keep your landing page for the program user-friendly. A good design can help boost user retention.
Step 5: Promote your referral program
Once you’re done with the program setup, it’s time to spread the word. These are some of the strategies you can use to promote your referral program:
- Add banners or pop-ups to your website
- Share program details through your socials
- Include referral program information in your email newsletters
To ensure customers know about your program, you need to promote it consistently. That way, customers will always be encouraged to participate and earn rewards.
Step 6: Track and Optimize
Referral solutions offer various tools that help you monitor the performance of your program. Refer a Friend for WooCommerce PREMIUM allows you to track all relevant statistics such as advocates list, referral orders, referral status, revenue generated by referrals, and more.
All these metrics can help you evaluate the success of your program. You can also use the data to make adjustments and fine-tune your strategy.
Tips a successful referral program
The ensure your program is running efficiently, these are the tips you should have in mind:
Offer double-sided rewards: We’ve already mentioned this, but rewarding both the advocate and their friend can go a long way. Just make sure you offer rewards that are beneficial and make sense to your customers.
Create a sense of urgency
Every once in a while, you can run limited-time rewards – also known as exclusives. This helps motivate customers and keeps them engaged with your store.
For example, you could offer a limited product that only customers with the most referrals can get. Which is must-have metric with your referral program.
Keep your program mobile-friendly
Research shows that mobile commerce accounted for 57% of global e-commerce sales in 2024. As mobile usage continues to grow, it’s important to ensure your referral program is fully optimized for mobile users.
By providing a seamless mobile experience, you’ll make it easier for customers to share referrals on the go, which in turn leads to increased engagement and participation in your referral program.
Highlight customer success stories
Social proof is one of the ways to fine-tune your program. If possible, share testimonials from customers who have received rewards as it can help increase program participation.
Even if you don’t have testimonials right away, pay attention to customer feedback and use it to improve your program. Showcasing real experiences not only enhances credibility but also motivates more users to engage with your referral program.
Conclusion
Let’s be honest here.
There’s never a wrong time to start a referral program. They can be a real game-changer for store owners looking to grow their customer base. In fact, studies show that referral marketing generates conversion rates 3-5 times higher than any other marketing channel.
With the right strategy and the right tool, you can turn satisfied customers into powerful advocates for your brand. The only thing left to do is take the first step.