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The Ultimate Guide to Retention for Shopify Stores

Referrals

Activate your advocates with referral rewards

Your loyal customers are the ones who will talk about your brand, promote your products, and refer you to others. Plus, customers acquired via a referral have a 37% higher retention rate and a 16% higher customer lifetime value. Implement a referral strategy as part of your loyalty program, and you will soon see your revenue go up and your acquisition costs go down. 

Your referrals checklist

  • Reward both parties - both the customer referring and their friend. Give-and-get referral programs are more successful.
  • Make sure the minimum spend for a successful referral is set slightly lower than your average order value - first-time customers spend on average 20 to 40% less on their first purchase than on subsequent visits.
  • The benchmark referral revenue for a loyalty program that has been live for 12 months is 0.20% - keep an eye on this metric.

Best Practice

Follow the best practices below to ramp up referrals from your existing loyal customers

Embed referrals everywhere

Your members are more likely to make referrals if they are regularly reminded that they can earn points for doing so. Ensure that referrals are embedded into your rewards page and that it’s clear what benefit—points or vouchers—a referrer will get in exchange for introducing friends and family. 

We also recommend setting up post-purchase notifications on order summary pages. Buyers are typically feeling positive about your brand at this stage of their purchase journey so it’s a good time to remind them that they could benefit from making an introduction. 

Finally, ensure that you’re regularly promoting your referral rewards across your social channels. 

Shopify Guide Images Referrals Page V2 Embed Referrals

Promote referrals off-site too

The chances are you’re regularly contacting your customers via newsletters, welcome emails, promotional emails, and SMS messages - not to mention your loyalty program emails. 

We recommend embedding a referral block into as many of these regular communications as possible. This can be done using a simple property if you’re using Klaviyo and LoyaltyLion together. However, it could also easily be built into email templates for other platforms. 

Don’t shy away from including a referral block on post-purchase emails too. After all, 83% of customers are willing to make a referral after a positive experience.

Shopify Guide Images Referrals Page V2 Highlight The Perks

Run referral promotions

Like the rest of your loyalty program, we advise that you don’t take a ‘set and forget’ approach to referrals. Regularly monitor the volume of referrals coming through alongside your referral revenue and adjust your referral rewards as required. 

We also recommend running monthly or bi-monthly referral promotions where the available reward is doubled. Tie these promotions to seasonal occasions relevant to your brand—for example, a sustainable brand might run a referral promotion to coincide with World Earth Day. 

Shopify Guide Images Referrals Page V2 Double Points

Top tip

Turn reviewers into referrers

Customers who leave you a positive review are feeling great about your brand. This is the right time to reach out and encourage them to refer a friend or family member too. Using loyalty points to incentivize shoppers to leave reviews will help you increase the number of reviewers you turn into referrers along the way.

Inspiration

Explore the most effective referral programs

We wanted to incentivize our current customers to refer friends and family to buy our products. This is adding to our bottom line by increasing new customers and improving conversion rates. At the same time, current customers are being rewarded for engaging with our brand.

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