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Referral programs can help you level-up your marketing strategy and bring in new consumers via referral codes. They allow customers to become Advocates, who in turn are incentivized to refer their Friends. Referral codes are the cherry on top — they automate the process, so that you don’t have to keep track of these referrals yourself.
Key Takeaways
- Referral codes connect purchases to an Advocate
- Referral codes can be used in referral links to make it easier for sharing
What Is A Referral Code?
A referral code is the custom code that connects purchases to an Advocate. It can come in the form of a vanity code, coupon code or personal URL (PURL), but its purpose is to identify — and then usually reward — Advocates for bringing in new customers.
Depending on how you set up your referral program, you may opt to use referral codes as coupon codes or links. Regardless, referral codes are an integral component of any successful referral marketing program.
Referral Codes vs. Referral Links vs. Coupon Codes
Though referral codes are similar to coupon codes in that both can activate a discount or a certain type of reward,
- referral codes attribute purchases to an Advocate and
- coupon codes do not keep track of referrals.
Referral programs utilize codes to keep track of conversions brought in by Advocates. Advocates are rewarded every time they successfully refer a friend using their referral code or PURL. Friends are incentivized by things such as coupon codes or account credit, and their conversion is linked back to the Advocate. The Advocate’s reward is then triggered after the Friend becomes a customer or enters their email, for example.
With referral links, the referred Friend will click on the link that the Advocate has shared. The PURL contains a code specific to that Advocate, making it easy to identify when a referred friend purchases.
An upside to referral codes is that they allow for cross-device functionality. Friends will provide the Advocate’s referral code at checkout, meaning they can complete this transaction on a different device than where they initially found the code. Referral codes and links are the backbone to making referral programs operate smoothly.
Referral Code Examples That Work Well
Many top businesses and brands use referral campaigns to convert new customers by leaning on influencers and ambassadors to help spread the word. A solid refer a friend program idea allows you to lean on your customers — turned Advocates — to do some of the marketing for you.
There are plenty of ways to go about a successful referral program, and you’ll need to put in some thought into
- what your conversion goal is,
- what Friend incentives will work best,
- how you want to reward the Advocate,
- and what will trigger that reward.
The following companies all make for great referral program examples. They have well thought out incentives and rewards that work together to generate conversions — whether that be in the form of subscribers, transactions, or new members.
The best part? They all use Friendbuy, so both the business-side and Advocate experience are painless and easy to get started.
Let’s see all of the unique ways these brands use referral codes to grow their referral program.
Flaviar
Flaviar uses an Advocate sharing experience that encourages customers to become Advocates.
After someone becomes a customer, they're invited to become an Advocate, receive their own PURL, and can begin referring friends to become members. The Advocate is rewarded with 50 store credits for every Friend that becomes a member, and the Friend also enjoys 50 store credits when they sign up.
- Advocate Reward: Account credit
- Friend Incentive: Account credit
- Trigger: Friend signs up for a membership
Scott’s Cheap Flights
Referral programs can also be a helpful way to grow your newsletter subscriber base. Scott’s Cheap Flights rewards Advocates who entice Friends to enter their email address. When the Friend successfully subscribes to the newsletter, the Advocate is entered into a referral sweepstakes, and each additional Friend equals an additional entry. In the meantime, the Friend is incentivized to subscribe because they receive a 14-day free trial.
- Advocate Reward: Sweepstakes entry
- Friend Incentive: Free trial
- Trigger: Friend enters email address
TurboTax
Users that have already filed their taxes with TurboTax have the option to invite a friend to do the same. They’ll receive a referral link and pre-written text that can easily be sent as an email or shared on socials. Friends that click on the link are directed to the TurboTax website where they’re offered a 20% discount. Once the Friend has successfully filed their taxes, the Advocate will automatically receive a reward email with a $25 gift card.
- Advocate Reward: Gift card
- Friend Incentive: Discount
- Trigger: Friend makes a purchase
Persona
Persona specifically selects their Advocates, sending out an email to their chosen high value subscribers. The Advocate must opt-in to the referral program before they receive an email with their personal referral link. Then, that link is shared, and all Friends who click that link will receive a discount off their purchase. The Advocate, in turn, is rewarded with a Tier 1 reward for the first conversion, and a Tier 2 reward for the next 2-23 conversions.
- Advocate Reward: Gift card
- Friend Incentive: Discount
- Trigger: Friend makes a purchase
MUD\WTR
Having a clear reward/incentive is crucial to achieving more conversions. MUD/WTR illustrates how that’s done with their “Give $10/Get $10” referral incentive. Advocates can easily text their friends their PURL, and both parties will receive $10 after the Friend makes their first purchase.
- Advocate Reward: Account credit
- Friend Incentive: Discount
- Trigger: Friend makes a purchase
Sunbit
To get more partners onboard, Sunbit uses a referral program that rewards the Advocate with a $100 Amazon gift card. The Advocate can come across the referral widget on their mobile or desktop device, and from there they can either share their PURL through social channels, email, or copy-pasting it anywhere else. In this scenario, there isn’t an incentive for the friend — but after they start the application process and are verified, the Advocate will receive their reward.
- Advocate Reward: Gift card
- Friend Incentive: N/A
- Trigger: Friend signs up
Casper
Casper has a referral program that’s flexible to their product offerings, including an incentive for mattress purchases, and pillow purchases. Anyone can become an Advocate by entering their email address, which will then generate a PURL. That link can be shared easily through email, messenger, or Facebook — or by copy-pasting it anywhere else. The Advocate will receive a gift card after the Friend makes a purchase, and the Friend will receive a discount on their order. The reward and incentive vary depending on the referral program.
- Advocate Reward: Gift card
- Friend Incentive: Discount
- Trigger: Friend makes a purchase
Olaplex
Olaplex allows Advocates to share their referral link anywhere, after entering in their email address. Any Friend who uses their link will receive free shipping. After their order goes through, the Advocate is gifted a free product from Olaplex, and will continue to receive a free product for every new customer that makes a purchase from the Advocate’s link.
- Advocate Reward: Free product
- Friend Incentive: Free shipping
- Trigger: Friend makes a purchase
Homer
Individuals who purchased Homer in an app store have the opportunity to become Advocates. For every Friend that signs up for a free trial through the Advocate’s unique referral link, the Advocate receives a $10 gift card. The PURL will redirect the Friend to the app store where they will get a free trial after downloading the Homer app.
- Advocate Reward: Gift card
- Friend Incentive: Free trial
- Trigger: Friend signs up
How to Start Using Referral Codes
Building a referral campaign doesn’t have to be a difficult task — but there are a few things you need to know before getting started. Make sure you have a solid grasp on how referral codes work, and then you can get to the fun stuff — like making them and tracking them.
How Referral Codes Work
The referral code is an identifier unique to the Advocate. Advocates receive rewards by sharing their referral code, which is good for them and good for your brand.
Even if it's not a sale that you're after, you can implement custom referral event tracking and decide what a “conversion” means for your business. No matter what you decide, the general process is the same.
- Step 1: Make Referral Codes. Customize the referral code by defining the Seed and deciding whether or not you want to include a Prefix.
- Step 2: Create PURL For Advocate. Advocates who join the referral program will receive their auto-generated PURL that will include either a randomized alphanumeric string, their name, or their email.
- Step 3: Advocate Shares PURL With Friend. Through a custom-generated email, social channels, or instant messaging, Advocates will promote their PURL to Friends.
- Step 4: Friend Clicks PURL And Arrives To Referral Widget. After clicking on the PURL, Friends will be redirected to a landing page or widget that shows them their promised incentive
- Step 5: Friend Converts. The Friend will decide to convert and either complete a transaction, enter their information, become a member, or any other custom task.
- Step 6: Advocate Receives Reward, Friend Receives Incentive. Once the conversion is successful, the Friend receives their incentive, which triggers the Advocate’s reward.
How To Make A Referral Code
Creating referral codes with Friendbuy is easy. Each Advocate receives their own PURL after they decide to join the referral program. Their unique referral code will be appended to the PURL. Advocates can then share this PURL through social channels, instant messaging, email, or wherever they please.
The unique referral code will be automatically generated and contain a seed and an optional prefix. The Seed is set as a randomized alphanumeric string, but can be customized to include the Advocate’s name or email address. The Prefix is also set as an alphanumeric string for each campaign. The two work together to keep track of all of your referral campaigns and subsequent conversions.
How To Track Your Referral Codes
To ensure that your referral marketing program is a good investment, you’ll want to track how your various campaigns and referral codes are performing. The Friendbuy dashboard has an analytics page that lets you view everything from how many codes you’ve distributed, to who your top-performing Advocates are.
There are several referral program metrics to be aware of in order to optimize your campaign. Pay attention to both the Advocate and the Friend metrics to get a clear picture of how things are performing.
The backend is easy to navigate and you can see your number of campaign impressions, the share rate, and the top-performing Advocates. On the Friend side, watch out for the click rate and the conversion rate.
Further reading: Follow our guide for tracking referrals seamlessly.
Quick Tips for Managing Referral Codes
A referral program should be a painless process that helps your business’s growth — not hinders it. To ensure that the whole process goes smoothly, we’ll cover all the steps you need nailed down before launching your referral program and distributing those codes.
Helping Your Customers With Their Referral Codes
In an ideal world, the referral program should be straightforward so that Advocates aren’t overwhelming your customer support team with any questions.
Consider having an FAQ document that you can send over if any Advocates run into issues. This will save you valuable time and reassure customers that you know what you’re doing.
This may be the first time your Advocates have been a part of a referral program, and they might not have a solid understanding of how it works. Anticipate these questions and make the following information clear from the get-go so there isn’t any confusion:
- How do I get my referral code?
- How does the referral code work?
- Can I promote my referral code anywhere?
- When will I receive my award?
- What is the campaign?
- How many awards am I allowed to receive?
- What is the incentive for people to use my code?
- Will I receive a notification if someone uses my code?
Advocates may come across your referral program in a variety of ways, depending how you set it up. Make sure that along with doing the work to promote your referral program, you’re taking the steps to make it a clear process as well.
How To Block A Referral Code
If you need to remove one of your Advocates from your referral program for whatever reason, it’s an easy process.
In Friendbuy, navigate to the “blocked list” after clicking on settings. You can add referral codes that you want blocked to the list manually, bulk upload a list via CSV, or block all referral codes associated with a certain email address.
Now, if any Friends click on the referral code that you’ve just blocked, you can choose whether to send them to a Friendbuy-hosted landing page that says "Offer Not Valid," or a specified URL of your choosing.
How To Limit Number Of Rewards An Advocate Receives
It’s crucial to ensure there isn’t any fraudulent activity going on in your referral program, and one way to counteract that is to limit the number of rewards an Advocate receives. This measure allows you to rest assured that your referral codes aren’t being taken advantage of by fraudulent activity.
You can configure the amount of rewards an Advocate is allowed to receive across all of your campaigns combined. This can be set on a monthly, yearly, lifetime, or custom basis. There’s also always the option to exclude certain campaigns entirely.
Final Thoughts
A referral code connects purchases to an Advocate and can be used in many different ways. Whether you want to allow vanity codes for Advocates or you want a custom code for a holiday campaign, the Friendbuy platform has the flexibility a growing business needs to connect Advocates to customers. Have questions about how to build your referral program? Contact us and we'll guide you through the steps to launch a successful referral program today.
