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Optimizing your referral strategy
Optimizing your referral strategy

Our top 5 tips for optimizing referrals to drive more revenye for

Success team avatar
Written by Success team
Updated over a week ago

Referrals play a crucial role in growing a brand's business by leveraging existing customer satisfaction and trust. When satisfied customers refer others to shop on a brand's website, it not only expands the customer base but also brings in new members who are likely to be more engaged and loyal.

Below we have outlined some tips on how you can maximize engagement through the referral feature, and entice new customers to shop at your store.

Make sure you give enough points for referrals

We know it can be worrying to hand out too many points. But trust us, we've seen it time and time again, giving more points brings more returns. The stronger the incentive for your customers to refer, the more customers you'll acquire. And don't forget that those new customers may purchase more than once.

For example, if your average purchase size is $50 you'll want to give at least 1,000 points for a referral ($50 * 20% = $10 = 1,000 points, since a point is worth $0.01).
 If your average lifetime value is $200 you've gained $200 revenue for less than $10!

Reward both people - the customer referring and their friend

If you put yourself in the customer's position, would you make a referral if the reward you would be getting was less than your friend? This is why 'give and get' referral programs are more successful, so whatever the friend is getting, the points the enrolled customers get matches up with that discount.

Customize your referral email and message

Write the referral message and email for your customers to share with their friends; save them time and increase the number of referrals!

When crafting a referral email it's important to make the message persuasive and engaging. Here's what you could include within your email:

  • Subject Line: Create a subject line that sparks curiosity and communicates the referral opportunity, such as "Exclusive Invitation: Shop & Save!"

  • Greeting and Personalization: Begin with a warm greeting and personalize the message with the friend's name to establish a friendly and personal connection.

  • Introduction: Introduce the referral email by expressing how much the referrer enjoys the brand and its products. Share a brief positive experience to create enthusiasm.

  • Referral Offer: Clearly communicate the referral offer for the friend, emphasising any exclusive discounts, promotions, or perks they will receive upon making a purchase.

Example of a customized email from Annmarie Skin Care (we love it!)

Enable post purchase pop-up reminders for referrals

Now here's an impactful little feature. A simple contextual reminder that notifies the customer right after they make a purchase. See how to turn it on here.

Include a banner or pop-up on your site to promote referrals

Some of our merchants have figured out a great way to promote their LoyaltyLion refer a friend feature. They simply added a big pop-up to their store front and information to their account page to make sure all his customers know. We think it's a great idea!

A referral pop-up should be concise and compelling, providing clear information and incentives to encourage users to refer others. Here are key elements to include:

  • Clear Call-to-Action (CTA): Use a direct and action-oriented message, such as "Refer a Friend" or "Share the Love," to prompt users to take action.

  • Incentives: Highlight the rewards or benefits for both the referrer and the friend. Whether it's discounts, exclusive access, or points in a loyalty program, make the incentives attractive and easy to understand.

  • Referral Code/Link: Provide a unique referral code or shareable link that users can easily pass on to their friends. Ensure it's prominently displayed and user-friendly.

Make sure your minimum spend isn't too high

The spending behaviour of first-time customers compared to regular customers can vary across industries and businesses. However, it's a common trend for first-time customers to spend less than regular customers. On average, first-time customers may spend anywhere from 20% to 40% less than their subsequent visits once they become familiar with the brand, products, and services.

So for example, if your AOV is $100 you could set your voucher minimum spend as $60 (40% less).

When setting up the rule you also want it to be configured as voucher minimum spend - the discount = minimum spend, which will ensure customers get points for a successful referral.

For help on how to set up your referrals, check out how to set up refer a friend feature or get in touch with. our support team who will be more than happy to help.

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