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How to manage mass refunds and gift cards in the time of pandemic

How to Create a Customer Referral Program That Works - step-by-step infographic

November 22, 2018

How to create a referral program that works - how to achieve a high conversion rate and good customer experience through personalization and gamification.

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Transcript of the infographic:

How to Create a Referral Program That Works

The success of referral programs comes from our natural tendency to trust word-of-mouth much more than any other form of ad. Referrals are low-hanging juicy fruit for your business.

Referral Marketing generates 3-5x higher conversion rates than any other channel.

1. Good customer experience isn't enough

If you stop at that, not even 30% of satisfied customers will share the experience with their friends and family. It would be a colossal waste, right? So, let the referral incentives walk on their own stage.

Incentives such as

- coupons,

- gift cards,

- loyalty program membership, or

- free items which motivate to spread by word-of-mouth.

More than 50% of people are likely to refer a company if offered an incentive in exchange.

39% of consumers claim that incentives such as discount coupons, free items or gift cards significantly increase their chances of referring a brand.

2. Bottom line = Conversion

Referral programs aren't about recommendations; they're about conversion. The bottom line in every program is to convert new customers. How best to meet a referred customer at the checkout or storefront?

I have many recommendations, where's my conversion?

If more than 90% of people trust in the opinion of their friends more than in any other form of advertisement,

and only 74% decide to purchase for the same reason (recommendation),

what happens with the other 20%?

These are only examples of stats which present a gap between the number of recommended customers and the final amount of referral acquisitions. In the real life of a traditional referral program, this gap can be much bigger.

This next section shows three techniques for upgrading your referral marketing and turning more recommendations into conversion growth.

3. Reach for Double-Sided Benefits

During a double-sided referral campaign, the incentive is divided into the referrer and their friend. For example, your customer gets 15% off the next purchase and a gift card for a friend with $10 to spend in your store.

I. Your customers are motivated to share by word-of-mouth.

II. It’s a chance to endow friends or family with real value carried by a gift card or coupon code.

III. With an incentive in hand, referred customers are more likely to follow the word-of-mouth.

4. Create a Gamified Journey


Run a program which is fun for customers. Gamification is no longer a marketing embellishment, it's a proven technique for keeping customers involved along the way.

Multi-level programs reward customers according to the number of referred customers. Thanks to this, clients won't stop at just a single recommendation. Rewards are like levels in the game. With every new acquisition, a customer gets a new, better reward.

- Make rewards a surprise.

- Inform customer at the very beginning about the program rules and reward schema.

- Put a time limit on every incentive.


Create segments within your referral groups. Different promotions with attractive incentives may activate dormant users and show you clues for improving reward schema.

- Run rapid flash-sales for referrers. For example, if you introduce your friend tomorrow, you'll get 50% off your order.

- Launch campaigns of gift cards with a predefined balance to spend for friends and family of your customers. By adding a short time frame, you can count on a fast conversion spike.

- Create social contests for customers and their friends, reward both sides for social shares or other activity within your profile.

- Offer product-specific deals based on order history or cross-selling. Such personalised campaigns help you to exceed customer expectations and build loyalty.

Customer loyalty and referral acquisitions are worth all your resources. The stats are pretty clear here.




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