How to Start a Referral Program for Your E-commerce Business?

How to Start a Referral Program for Your E-commerce Business?

One of the most effective ways to market your e-commerce business is referral marketing, a vital part of which is a referral program. A referral program works in widening your customer base and increasing sales because people trust other people’s recommendations.

A lot goes into creating and launching a referral program. But don’t worry, there are tools that make it simple for you. This blog tells you how to start a referral program for your e-commerce business.

How to start a referral program for your e-commerce business?

How to start a referral program for your e-commerce business?

Launching a referral program will facilitate turning your loyal customers into your brand evangelists. While the setup may seem complicated, it’s not. Using referral program software can simplify the many things that go into running a referral program.

Here are detailed instructions on how to start a referral program for your e-commerce business.

1. Research your competitors

Studying your e-commerce counterparts who run referral programs can be a great start. So, list down your competitors and analyze their referral programs. Look into the type of rewards they’re offering, the kind of marketing they do to promote their referral programs, the kind of activities that referrers are expected to perform to earn a reward, and more.

For instance, if your successful competitors are promoting their referral program on social media, find out the platforms on which they do and the different shapes (contests, blogs, forum discussions, images, quizzes, etc.). Pay keen attention to what’s making them successful. This most likely will work for you too. 

2. Determine the incentives

Determine the incentives

While your happy customers will readily go about talking about their experiences with your brand and its offerings, incentivizing them will encourage them to do so eagerly. The reward should be something that they’d value. It can be discounts, free products, free shipping, store credits, or gift card. These rewards will ensure that you earn back the money you spend on referral marketing.

While deciding upon the right referral incentive, remember that your incentives should be neither too big nor too small. That is, they should be big enough to be attractive and adequately small to be profitable for you. Again, it shouldn’t be too high that people start promoting your brand dishonestly or too low that customers feel it’s unworthy to refer to you. Also, determine whether only the referrer or both the referrer and the referred one. 

3. Set up a dedicated landing page

Have a landing page exclusively dedicated to your eCommerce referral program. This will act as a key location where customers can know everything about your referral program from. It should clearly tell them the value of participating in your referral program. It should bear compelling reasons to join the program and an explicit call to action.  

After creating the landing page, focus on bringing web traffic to it. We recommend linking it to the most vital parts of your website such as the home page, contact us page, blogs, etc. Additionally, you should also link it to your sales channels like checkout pages, social media, and online ads.

4. Set referral program goals

Set referral program goals

Setting goals for your referral program will allow you to measure its effectiveness for the business. This will help you decide whether or not you’ve achieved the objectives set and which channels are worth investing in. Some referral program goals examples are-

  • Increase website traffic by 10% with each passing month.
  • Raise the average order value (AOV) by $25 within six months.
  • Improve conversion rate by 25% with each passing year.
  • Increase revenue generation by $3,000 by each year’s end.

Such goals are realizable as referrals are more likely to convert better and spend more than cold customers. So, they can have a considerable impact on the bottom line.

5. Launch your referral program

Launch your referral program

Now you’re ready to launch your referral program! Launch it and get active promoting it. It’d be great to inform your loyal customers about its setup. Since they’re the people who keep buying from you, they’re already happy with your offerings and services. So, they’ll be willing to spread you in their circle.  

Here are some helpful tips in this regard.

  • Display your referral program on your website on the top menu, announcement bar, pop-up notification, customer account dashboard, and footer. 
  • Remind customers to take part in your referral program soon after their purchase. 
  • Highlight your program in your product packaging. 
  • Incorporate it into your email and social media content. 

6. Track, Analyze, and Enhance

Track, Analyze, and Enhance

Running a referral program doesn’t end with creating, launching, and promoting one. You continually need to monitor and evaluate it to keep improving it. Your referral program software will provide valuable analytic reporting, wherefrom you can derive valuable insights to tweak your program.  

You can optimize your referral program by getting an idea of who your top referrers are, what they have in common, where the referred traffic comes from, what the referral rate is, what the customer participation rate is, what is the website referral traffic, and how much your referral sales accounts too. 

How to start a referral program for your e-commerce business using InviteReferrals?

Running a referral program can help your business tap into the power of customer advocacy. Its viral networking impact, low acquisition costs, and scalability make it appealing. You can ensure that the customer experience you render through your referral program is excellent by using referral software like InviteReferrals.

The software has many useful and easy-to-use features. You get plenty of templates to help you create your e-commerce referral program. Using its WYSIWYG, you can completely customize it to match your preferences and the brand’s look and feel. Another plus is that you can incorporate your company’s branding as well.

Using it, you can determine whether your program will reward both the referrer and the referred one, or just the referrer. It also allows you to disseminate rewards in phases. For instance, the referrer will get a part of the reward for sharing a link, another part of it when the referred one reaches out, and the final portion when he/she buys from you. Such multi-event rewards will help continually hold the participant’s interest in your program. 

Everything including customer enrolment, referral tracking, referral rewarding, coupon code management, and more can be automated. So, it won’t require a lot of attention from your end.

The software also tracks the effectiveness of your referral program and provides you with useful referral statistics. Over time, you’ll get to understand what works and what doesn’t when it comes to referral marketing to your customers. By putting these insights into action, you can optimize your program periodically.

Furthermore, the program is completely secured with in-built fraud prevention mechanisms. You can also set terms and conditions to allow only authentic user profiles. This will help prevent suspicious activities. So, with InviteReferrals, you can run your referral program without any security concerns. 

Wrapping up

Referral marketing is an effective way to grow your online business. Hope you’ve easily learned how to start a referral program for your e-commerce business from our blog. It takes a little effort and smartness from your end to successfully run a referral program. You can try InviteReferrals for free for 14 days by simply filling up the short form given at the link.


1. What is referral marketing?

Referral marketing involves motivating your existing happy customers to promote your brand and its offerings via word of mouth to their circle. It attracts new customers by banking on the truth that people trust other people than messages and advertisements from brands themselves.

2. What is a referral program?

A referral program is a system that rewards participants who refer the concerned brand and its offerings to their families, friends, and colleagues. It effectively widens a business’s customer base and increases its sales because of its straightforward and authentic nature. 

3. What can be given as referral rewards?

Brands and businesses can choose from rewards such as cash, cash back, discounts, free products, free services, branded swag, store credits, and gift cards for incentivizing their referrers.


Shivani is a content writer at InviteReferrals. She writes SEO articles, blogs, and guest posts for businesses to improve website ranking on SERP. She follows a balanced approach for the quality of content and its marketing. She loves to do creativity, although she had an English major in her graduation.