Referral Program Best Practices: Our Exact Formula For Constant Growth

I've seen quite a few great referral marketing programs and can tell you precisely what makes the best referral program best practices. That’s one of the perks of working at Friendbuy – observing many (thousands of) campaigns.  It’s pretty easy to identify common traits shared by the best of them. What I see, over and over, is that the marketers behind successful referral programs focus on three key areas: location, promotion and optimization.

1. Location refers to the visibility of your customer referral program.  Placing referral widgets in many areas of your web site — where you visitors can easily see them — drives up referral program participation (the number of people sharing ).
2. Promotion also drives user participation by getting the word out about your program via your email list and posting to your social followers.  This is primarily off-site activity.
3. Optimization is all about improving performance by A/B testing things like your referral offers, copywriting and so on.

In this article, we’ll cover:

• how to get as many eyes on your referral program as possible,
• how to automate your referral program promotion,
• how to integrate your referral program into the entire customer journey,
• and how to A/B test it all.

Here is our entire playbook for referral marketing best practices.

Referral Program Location

If folks can’t see it, folks can’t share it.

The location of your referral widgets and other assets (like navigation links to a standalone referral page) will have a material impact on performance.

Include referral widgets in each of the following locations to increase the overall visibility of your refer a friend program.

• Homepage / site-wide navigation
• Ribbon
• Standalone referral page
• Product pages
• User account pages
• Order confirmation page

More visibility means more sharing.  It’s really just that simple.

Homepage

Let’s start with the homepage.  Your homepage (and site-wide navigation) needs to include a link to your standalone referral page.  Why?  While your homepage garners a lot of traffic, your site-wide navigation also gives users access to your referral program on any page at any time – not just at the homepage.

Here’s an example from Prize Candle.

We know from eye tracking and heatmap studies that the upper-left hand corner is an incredibly important piece of real estate on a web page, so that’s a great spot to increase your program's visibility.

The "Tell A Friend, Get $10" button clicks through to the standalone referral page (another key location we'll cover below).

And another example with Current/Elliott, who offers a percent-based discount right above their bright red and flashy Outlet Sale button.

Learn more: how to get more referrals from your homepage.

Product Pages, Checkout, and Post-Purchase

The most common #fail in referral marketing is limiting your widget placement to the order confirmation page.

A word about the order confirmation page.  When we get sales inquiries here at Friendbuy, we often hear folks say… “I want people to share after they buy from me.” That makes sense.  A customer just converted.  They’re excited.  They’ll want to share. Truth be told, order confirmation pages typically have the highest sharing rate of all widget locations. So that’s great!

BUT BEWARE!!!!

If you were to only run a post purchase widget, you’d be leaving 95 percent or more of your potential on the table.  That's because a typical ecommerce store converts 3 to 5 percent of site visitors.

Don’t bury your program here. Meaning, this is only one of many key locations. It should not be the only location involved in your program. 

Here’s a Product Page from Huckberry.

They've taken advantage of all their site traffic that goes to product pages and they’ve placed a referral button there.  By integrating their product catalog with Friendbuy, now users are sharing products while simultaneously referring friends.

We’ve seen companies use Friendbuy for product sharing without a referral incentive, just to track the incremental sales generated from social sharing. That is to say – you can have your referral program running side-by-side with your regular (non-incentivized) product sharing and track the ROI of both.

I personally like product sharing to be tied to the referral program. Either way, you’re getting more reach and more sharing and more referrals.  It’s all good.

If you have users that come back and login often, user account pages help increase visibility, too. Here’s the user account page from Dollar Shave Club.

• The preferred execution here is an embedded widget.
• If you don’t have enough room to embed a full widget, you can fit any size of share button on this page and have it trigger an overlay (referral program pop up).

Your order confirmation page is another key location. Here’s a post purchase overlay from Feals.

Landing Page

Unlike a homepage with multiple navigational options, a landing page is a standalone web page designed to provide a focused and concise message to a visitor. Landing pages are typically linked to from an ad, email, or other promotional material.

The main focus of a landing page is to convert visitors into Advocates by highlighting a compelling value proposition.

The value proposition explains to the visitor why they should take the desired action, such as making a purchase, signing up for a newsletter, or referring a Friend. The best value propositions are concise, easy to understand, and relevant to the visitor's needs and interests.

This is very simple to set up. You just create a page, like "yoursite.com/refer" and embed a referral widget there. Here are some tips for a good deployment:

• There’s open access sharing (no need to register or log in to start referring friends).
• Embed the widget on a permanent URL so that it can be promoted to social followers, to your email list and so on. The takeaway for now is that you can reach out to users NOT currently visiting your site and get them to come here and refer friends.

Another opportunity is to optimize the page's layout and design to make it easy for visitors to take the desired action. This could include 

• providing clear and concise calls to action, 
• organizing the page's content to make it easy for visitors to find what they are looking for,
• or making it obvious what the next step is.

Friendbuy allows website owners to create landing pages that showcase their referral programs and track the performance of different elements, allowing for optimization.

Learn more: rules for a referral landing page that converts.

Website Ribbons or Banners

A website ribbon, also known as a banner, is a small visual element that appears at the edge of a website page—typically at the bottom, left, or right-hand side.

So how do website ribbons increase conversions?

These flashy little strips of pixels showcase a site's products and services in an engaging way that can have a huge impact on potential customers. 

By strategically placing these ribbons throughout a website, businesses can easily encourage viewers to take action while also providing them with useful information about their products or services. 

It offers an effective way for businesses to boost referrals without having to invest too much time or money into other forms of advertising.

Friendbuy allows website owners to add a referral program ribbon to web pages and track the performance of each component, making optimization easier.

Here’s a referral ribbon example from Bear State Coffee – you can see “Get $20” in the lower right-hand corner.

It’s a simple call to action and they make great use of the color red to capture their eye. The red ribbon triggers an overlay widget immediately over any page throughout your website.

Learn more: how to set up sitewide referral ribbons.

Referral Widget

A referral widget is a small, embedded code snippet that allows website owners to easily add a referral program sign-up form to their websites. 

Widgets are typically used on dedicated landing pages and usually integrate with various third-party platforms, like Facebook and Messenger, to make it easy for Advocates to refer Friends.

You’ll most often use referral widgets in these ways:

• Embedded referral program widget
• User account referral widget
• Standard pop-up widget
• Floating button widget
• Website banner widget
• Post-purchase widget

Friendbuy provides website owners with widgets that integrate with all major social media and email platforms, allowing Advocates to quickly and easily share their referral offerings with Friends across a wide variety of channels.

And back to the underlying question that guides all of our decisions: how to make them convert?

Here are a few of our recommendations for making referral widgets that convert:

• Make it easy to find and use
• Trigger the widget at the right moment
• Offer referral rewards and incentives worth sharing for
• Use clear action words in your CTA
• Use A/B testing to find the right widget for your business

Learn more: here are the best types of referral widgets that convert

Referral Program Promotion

Now let's look at how to get the word out about your referral program.

Referral Automation

Referral automation uses automation-based technology, like Friendbuy’s referral software, to manage, monitor, and optimize the referral process.

There are several automated processes that can boost conversions by:

• Sending out emails with customized invitations, rewards and incentives, and messages to customers referred by Advocates
• Automating referral reward delivery to Advocates 
• Sending follow-up campaigns to Friends to persuade them to join and complete the referral process
• Developing personalized messaging based on customer behavior and previous campaign engagement

Automating your referral program means that no customer—or lead—slips through the cracks.

In fact, research by Software Path found 78 percent of marketers believe that automation is the main factor behind increased revenue. Businesses who automate their referral flows experience higher customer loyalty, increased customer lifetime value, better customer retention, and more customer referrals overall. 

The ability to track referrals and analyze aggregate data is another key benefit of automated referral programs.

For example, Friendbuy’s referral software tracks metrics such as 

• the number of referrals generated, 
• the conversion rate of referred customers, 
• the average order value of referred customers, 
• and the lifetime value of referred customers. 

This data can be used to measure the overall effectiveness of a referral campaign and identify areas where improvements can be made.

SMS, Push Notifications, And Social Media

Don’t limit your promotion to just on-site activity. When you start adding up the places you can promote your referral program beyond your website, your reach really starts to add up.

Send out regular SMS or push notifications to existing customers about the referral program, including information about incentives for both the Advocate and Friend. Include a link to the referral program page, which has all the information customers need to get started.

Offer exclusive rewards, such as discounts or exclusive products, to your SMS list that cannot be earned through other promotions.

PRO TIP: Make sure to include a call-to-action in each SMS or push notification to encourage customers to take action.

Definitely include social media in your promotion efforts. Here is a Facebook post example reminding fans that your referral program is in full swing.

And here is a promotional Tweet.

Make sure you promote on “Day 1” of your referral program and then keep the reminders coming over time.

Here are few tips:

1. Promote on “Day 1” and then continue promoting over time
2. Schedule periodic email drops
3. Schedule frequent social promotion (Facebook, Twitter, etc.)
4. Include images in social posts - images in social posts garner much higher click thru rates than text-only posts
5.  Make sure your offer and call to action are both very clear and not confusing
6. Link social posts to your stand alone page – that’s where you want to drive the traffic
7. For Twitter, you should Tweet very often (several times per week) and for Facebook about once every two weeks – this varies from brand to brand, it just depends on the level of social activity your brand puts out. You don’t want to do too much, nor would you want to do too little.

Now let’s get into the nitty-gritty of referral email marketing.

Referral Program Email Best Practices

The best way to increase awareness of your referral program is by having your referral program embedded throughout the customer journey. And one of the easiest ways to do that is to integrate your referral program promotion with your email strategy. It’s so important that we’ve dedicated an entire section to referral program email best practices.

Here’s how we make sure that our clients have a low cost per acquisition with a strategic referral program email strategy.

Email Blast

An email blast is a bulk email sent out to an entire list of contacts all at once. Think of them as a method for announcing a new product, service, or sale to your entire customer base. 

Or an easy way to remind your entire customer base about your epic referral program offerings.

Email blasts can promote customer referral programs and build awareness of the company’s offerings. They work well when targeting existing customers since they already know and trust the brand.

In terms of scheduling, it's a very good idea to run an email drop to your whole list on “Day 1” of your referral program  This will help spark the fire and drive immediate results.

It’s also really smart to schedule monthly or quarterly drops to your whole list.  Some aggressive brands do this weekly.  Some monthly.  Some quarterly. It just depends on what's right for you.

You can also take advantage of transactional emails like order confirmation, registration confirmation, drip email series and so on.  It’s really easy to add a banner or button to your existing transactional templates. Newsletter templates are another great spot to include a call out to your program.

This is exactly what Walmart does in their customer emails. At the bottom of every email blast is an enticing offer: “Give $10, Get $10!”

Learn more: See more email blast examples.

Post-Purchase Email

Post-purchase emails are emails sent out to customers after their initial purchase. They typically include a thank you note and ask for a review. This is also a good time to offer a discount code or invite your customers to join the company’s referral program. 

Further, automated post-purchase emails can help save time and resources by allowing businesses to integrate their referral program emails in their automated workflows.

For example, here is an optimal post-purchase email flow:

1. Order Confirmation
2. Shipping Confirmation
3. Ask-For-Reviews
4. Product Recommendations/Cross-Selling
5. Referral Program Promotion
6. Sales And Other Event Notifications
7. Birthday And Milestone Emails
8. Win-Back Emails

Friendbuy has a suite of different post-purchase email templates that can be used to boost referral conversions, made possible by an easy Friendbuy/Klaviyo integration.

We love how the all-natural beauty brand ILIA offers a whopping $20 off to both the Advocate and Friend hot off the post-purchase email workflow.

PRO TIP: In all post purchase emails, check the available integrations for customer journeys. If a customer signs up for your referral program, for example, but doesn't refer right away, then you can auto send SMS with PURL to remind your customers about your program.

Learn more about post-purchase email flow best practices.

Refer-a-Friend Emails

Refer-a-friend emails encourage customers to refer their friends to the company’s offering. These emails typically include a personalized invitation for friends to join the company’s referral program or use its services. They often include incentives for successful referrals, such as discounts or complimentary products.

To make your refer-a-friend emails count, we recommend that you:

• Write A Subject Line Worth Opening
• Make It Short And Sweet (And Clear)
• Personalize When Possible
• Don’t Forget To Optimize The Email For Mobile
• Include A Clear Call-To-Action (CTA)

Learn more: see our recommended referral email templates.

Refer-a-Friend Email Subject Lines

Refer-a-friend email subject lines are the first line of defense key to customers opening and engaging with an email. They need to be catchy, creative, and relevant to the content of the email. 

And once again, we can do this with data-driven insights.

Businesses can identify trends and patterns in customer email engagement by 

• Looking at data from past emails. When it comes to email subject lines, it pays to look back and learn from your past. By taking a step back and examining data from previous emails, you can uncover how to craft stronger subject lines that will boost open rates.
• Running A/B tests on subject lines.  By exposing a statistically relevant sample size to each variation, you are able to determine which version elicits the desired response from users, such as an increased click-through rate. This information can then be used to refine your email subject lines and ensure that they are as effective as possible in capturing the attention of your target audience.

It’s all about finding the right balance of brevity and clarity. Did longer subject lines perform better than shorter ones? Did certain keywords or phrases lead to higher engagement? Once you identify the elements of successful subject lines, you can apply them to future campaigns for maximum impact. 

And let’s not forget about tone—sometimes humor or wit is a great way to stand out in an inbox full of mundane messages. If that’s your jam, look for patterns in the email responses you get back—it might just be proof enough that a humorous approach may work wonders for your open rates!

Learn more: how to write referral email subject lines.

Referral Program Optimization

Before we begin with all of the ways to optimize your referral funnel, it’s important to first get this point across: you need to have a referral incentive that is more appealing than other CTAs on your website.

For example, if you frequently provide 30% off, then your referral incentive needs to be better than that. To define “better”, A/B test all of your different referral incentives to see which is most attractive to your customers.

After all, if the referral incentives look too good to be true, no one's going to click it. So make sure the offer is enticing - bonus points for being creative and funny! Keep it concise yet informative; you don't want users overwhelmed by information overload when trying to decide whether or not to click a link.

Learn more: How to create referral codes and referral links that convert.

Calls to Action

A call-to-action (CTA) comes in many forms, but they all serve the same purpose: to encourage the viewer to take a specific action, such as making a purchase, filling out a form, or sharing a referral program. CTAs can be used in any type of marketing, such as content marketing or social media marketing to drive some kind of action. 

We use them in referral marketing to drive referrals.

One big performance killer I see from time to time is the use of exceedingly long copy and even worse, being vague.  Wordy and vague often go together. Which is weird because you'd think being wordy gives the writer more room to clarify things.  But in fact, longer copy mostly obfuscates the real thing you want an end user to do.

Users need to clearly know (not vague) immediately (not wordy) what’s in it for them (WIIFT).

Good referral widget copy: Share and Earn $10

Bad referral widget copy: Do you love our product? Do you know someone who would like it, too? Why not spread the word about us to your friends? Share with friends and they’ll get $10 off their first purchase and we’ll send you a reward coupon for $10, too.

Try not to fit your doctoral dissertation in a widget.  I fell asleep writing the bad example above. Imagine what your visitors will do. It’ll ruin your performance.

A CTA’s true superpower is how effectively it guides customers to take the next step in the customer journey. As an example of how effective CTAs can be, Ellie Mirman from Toast tells Wordstream that including one clear CTA in their emails boosted clicks by 371 percent and sales by 1617 percent.

Impressive.

The highest-converting CTAs have a few key elements.

They are direct, unambiguous, and target a specific user action. In fact, research from Hubspot that analyzed over 330,000 CTAs suggests that personalized calls-to-action convert 42 percent more visitors into leads than generic CTAs. 

You can also target certain customer groups with your CTAs so that they are further optimized depending on who is looking at them. 

We helped meUndies set up a referral program CTA in their footer that is only displayed to customers who were logged in.

As for placement, effective CTAs are positioned in areas that are easily accessible, prominently placed, and receptive to user engagement.

Friendbuy offers several recommendations for optimizing your CTAs, starting with where to place them and how to A/B test your referral offers.

Learn more: How To Write A Call-To-Action

CTA Button Design

As the name suggests, CTA buttons are a form of call-to-actions. In fact, they are the best performing type of CTA. On average, the click-through rate (CTR) for all CTAs across all industries is 4.23 percent. 

For CTA buttons, the average is 5.31 percent. With careful A/B testing, you could get that rate up even higher. 

There are three opportunities to improve the effectiveness of CTA buttons.

The first opportunity for boosting conversions is to optimize the placement of the CTA button, as mentioned earlier. 

PRO TIP: Friendbuy recommends making your referral program as visible as possible by including it in your menus, as a site banner, in your post-purchase flow, and in all email marketing campaigns.

The second opportunity for optimization is in the design of the button, such as its color, size, and shape. These factors also impact the button’s effectiveness. Good button design should be visually appealing, clearly represent the desired action, and be positioned in a space conducive to user engagement. 

The third opportunity is in the button text itself. The CTA button text that converts best is clear, compelling, and easy for the viewer to understand and act on.

For example, “Join The Program” is a short and sweet way to sum up what’s expected of the customer and what will happen when they click the button.

Other common button text that converts well includes "Sign up now" or "Shop now." Remember to always pair your CTA button with a clear and concise explanation of the benefits of taking the desired action.

Always Be A/B Testing

When you optimize a referral program, it helps to focus on the referral conversion funnel, which has been simplified below into three steps.

So the idea here is to run A/B tests on each step of the referral funnel. Or said another way, tweak the following areas:

• Get more people to share with their friends
• Increase the number of friends who click on referral links
• Increase the number of friends (referred visitors) who convert

Friendbuy’s referral software allows businesses to A/B test different emails, referral landing pages, widgets, and more to identify the optimal funnel for their referral program. This includes the ability to create and test different variations of pages and emails, track performance, and identify the highest-converting elements of the funnel.

Now let’s see exactly how to A/B test every part of the referral funnel.

Sharing Rate

First, we want more people sharing (drive up the sharing rate).  Here’s a Naturebox widget.

Since we’re talking about sharing rate, we’ll focus on the top half of the widget — outlined in blue — which has the Referral Offer and Call to Action.

Here’s what works for Naturebox: "Get $10 when you snack with friends."  It's a clear call to action that includes a “what’s in it for them” statement for the sharer.

What’s interesting is how they arrived at that winning headline.  Below is a history of calls to action in a sequence of A/B tests that Naturebox conducted.

• Get Half Off a Naturebox!
• Get $10 for free!
• Get 50% off your next Naturebox!
• Get $10 when you snack with friends!

The last line won.  Oddly, a Naturebox is $20 bucks, which means all of these offers are mathematically the same.  But the copy into the fourth bulleted line above produced the highest sharing rate, regardless of the dollar value of half off...

In addition to copy, you can also experiment with design.

In this case Nice Laundry increased sharing rates with the treatment on the right where the primary CTA “GET A FREE PAIR OF SOCKS” was red, italicized font and that tweak drove up sharing rates by 42%.

Referral Visits

So the next step of the referral funnel is getting friends to click and visit (or more referral visits).  Performance here is tied to the content that is being shared to email and social networks.

Here’s a test — on the Facebook referral post  — that Birchbox ran.  This one is really interesting to me because it’s not a discount, rather it is taking advantage of seasonality.

The treatment on the left basically describes what Birchbox, as a company, offers: "4 to 5 beauty samples every month."

The treatment on the right had a different Facebook title link that said “Birchbox – The Perfect Holiday Gift.”  These two versions ran concurrently in a 50/50 split test for a week before the holidays.

The treatment on the right doubled referral visits and referral sales. So....let’s just way tapping into the holiday spirit when everyone is looking for cool gifts that really paid off!

Here’s the embedded account page widget for Dollar Shave Club.

In one of the very first tests they conducted after starting on the Friendbuy platform, they tested variations of the copy sent to friends via email (the shared email).

What’s interesting to me about this email copy is that it is rather long.  Normally short, terse copy works best. But once and awhile, someone comes along and blows your theory right out of the water and this is one of them.

So this relatively long, cheeky and humorous copy tapped into the brand voice of Dollar Shave Club and you know what?  It doubled the referral sales over the control version.

Referral Conversion Rate

The next thing you can do is increase the number of friends who convert – that’s your referral conversion rate. Here are three ways to help increase them.

This first example shows how MeUndies welcomes the referred visitor.  They do so with a modal overlay.

The modal reinforces to the visiting friends, “Oh yeah, that’s why I clicked. I’m going to get 20% off my first purchase.”

Below that, there’s an email capture field and once a user enters their email address and clicks on the CTA button, they get a unique promo code to use right now.

Prize Candle has a dynamic welcome message within the body of a page.  It says, “$10 off has been added to your shopping bag!”  So they’re using session-based logic to create a discount.

They surface a message to the referred visitor and place the discount in the cart where it awaits the shopper in a very seamless manner. Another great execution.

Naturebox directs referred visitors to a dedicated landing page.

This page is a truncated version of their homepage.  They follow several landing page best practices by reducing the number of clickable elements on the page, showing the product, etc. There are no social icons nor a main navigation. This helps the visitor stay focused and inside the conversion funnel.

Learn more: optimize your referral funnel with A/B testing.

Closing Thoughts

To maximize your referral program benefits, follow the best practices outlined above. If you're looking for more information about how savvy brands run awesome referral marketing campaigns, contact our team today to help set up a successful referral program of your very own.