How to run a successful referral program for your eCommerce business

(Last Updated On: September 20, 2022)

Have you been thinking of starting a refer and earn program for your business but aren’t sure about where to get started? We have you covered! Here is a beginners’ guide to a refer and earn scheme that will work for your business.

What is a Referral program?

A referral program is a marketing tool where you reward your customer to refer your business to a friend/colleague. A refer-and-earn program can help you multiply your business, raise brand awareness and increase your marketing ROI.

Why choose a referral program?

You are probably reading this because you’re unsure about your referral program. Does your business really need a referral program? Let us help you with that. Here are a few reasons why you should choose a referral program.

As per research:

  • 1 in 3 people adopt a business due to referrals.
  • Using a referral business improves customer retention rate by 37%
  • Referral Programs help improve sales revenue significantly.
  • A referral program influences 20 to 50% of buying decisions of a customer.
  • Referral leads are 10 times more valuable.
  • A good referral program builds a great deal of trust among customers.

These stats have been taken from a study done by Annex Cloud. You can find them here.

How to find the right referral program for your business

If you’re sold on the idea of getting a referral program for your business, here is the next step – finding the right referral program.

To understand what referral program would suit your business the best, ask yourself these questions:

  • Who is my customer? What kind of incentive/gift would they enjoy?
  • What will this referral program do for me?
  • Will this program only help you get new customers or will it benefit existing customers too.

Types of referral programs

Once you have your priorities straight about what your referral program will do for you, choose from the below programs:

1. Implied referrals

An implied referral is a non-tangible referral program, where you aren’t directly giving the customers an incentive but are requesting them to endorse your business.

For example, you request a client to keep a brochure or catalog in their office or home so that other people visiting your client can look at it and try it out.

This works for a nice service-related business like an interior decorator or a jewelry designer etc.

2. Tangible referrals

A tangible referral is a referral scheme where you offer a tangible incentive to your customer, which is not in the form of cash. For example –  a buy one, get one offer; Bring a friend to an event or send a gift to your customer and ask them to share it with their friends.

Ideally, the product that you are promoting has your brand on it. This helps you improve brand awareness.

3. Community referrals

Community referral programs build emotion for your brand. In such a program, you partner with a non-profit organization and donate a certain part of the proceeds or donate every time a customer purchases something from your business.

4. Direct referrals

A direct referral rewards program is where an existing customer helps sign up another new customer and both get a reward. This is by far, the most popular form of the referral program.

Here are examples of a direct referral program:


refer and ear instamojo


freshmoney refer and earn

Have you checked out Instamojo’s Refer and Earn program? You can earn a monthly salary, just by sitting at home and referring customers to Instamojo.

Ready to start making money from the referral program? Get started!

Refer your peers today

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