How to build a powerful referral program?
5 mins read

How to build a powerful referral program?

Referral programs are one of the most powerful forms of advertising. They attract the best customers, those who spend more, stay longer and refer others. Referral programs send a marketing message to people in the best way possible – by word of mouth.

Referred customers are 18% more loyal, generate 16% higher revenue and spend as much as 13% more because they were referred to them by a friend. One happy customer can spread the word about your company to nine more customers. That’s nuts!

This comprehensive guide will help you get more referrals to your business, whether you build your program in-house or use off-the-shelf software. After building and launching more than 1000 referral programs, I have compiled this guide with the help of my Referral Factory team. I hope that it will be useful for you and your company.


  1. Plan Your Referral Program
  2. Choose the Reward and Incentive
  3. Building Your Campaign
  4. It’s easy for people to share your campaign
  5. Integrate your Referral Campaign into Your Business

Step 1: Plan Your Referral Program

A clear plan is key to building a successful referral program. It starts with setting goals and describing the process. Then, it moves on to the message that will encourage users to share the campaign with their friends.

Setting goals

You can set your campaign goals and objectives to give you a goal line. You can grow your customer base and encourage newsletter subscriptions. A great referral campaign will be successful if you set clear goals.

Plan how the campaign will work

A referral program can be set up in two ways: a single-sided campaign or a double-sided campaign. A single-sided campaign will reward one participant. A double-sided campaign will reward both the referrer and the person who invited them. Clear campaign goals will determine the best way for your campaign to work and which option will work best.

Consider the Message

How will you position your referral program? What message can you use to get customers to refer friends? And what call to action will convert referrals into customers? Strong messages are key to attracting customers to your campaign. To get customers to invite their friends and to persuade friends to join.

Step 2: Choose the Reward or Incentive

You can choose a single or double-sided reward

As we have briefly mentioned, you can either offer one user a reward or give both the referrer or the person being referred a reward or incentive. There are many types of referral campaigns available. Choose the one that best suits your needs.

What is the difference between a reward and an incentive?

To thank users for taking the desired action, rewards are offered as a “gift”. Incentives encourage users to take the desired action. You can give away products, gift cards or cash as incentives. Keep in mind the campaign goals you set in step 1 and align your rewards with these.

What should your reward or incentive be?

It would be best if you aimed to give a commercially profitable reward or incentive that benefits your business. You can think about discounts, account credits, coupons, etc. It is always best to select the rewards and incentives to drive customers back into your business. It would help if you also considered how they will be distributed.

Step 3: Building Your Campaign

In-house Referral Campaign Building

If you have your own developer, tell them how you would like the campaign to run. Let your developer know how the campaign should work and who will get rewarded. The designer and developer will need to agree on the design and the format of the campaign.

Referral Software

It’s easier to use pre-made referral software. However, it might not be possible to do all you want. These no-code tools can help you create a great referral campaign without the need to hire a developer. This is often the easiest and most efficient way to get started.

Step 4: Make it easy for people to share your campaign

Talk to your customers on the same channels they talk to you

Your customer should be able to easily refer friends via the channels they already use. You know your customers better than anyone. It makes sense for you to know your customers’ preferred channels so that they can refer their friends to those channels.

You can choose from a variety of sharing options

Referring friends is easier and more people will be able to do it. Your referral campaign should be easy to share via email, instant messaging, social media, or in person. You might also consider offering other ways to share your referral campaign, such as clickable buttons or QR codes.

Step 5: Integrate your Referral Campaign with Your Company

Connect your referral campaign to your internal business systems and reduce your administrative burden. Many integration apps are available that allow you to link your referral campaign to your CRM in one click.

You can create your own connectors if you don’t find an integration to work with your business tools.

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