Referral Program: How it Works

A referral program lets you turn customer advocacy into your most cost-efficient revenue driver. With a Yotpo Referral Program, you can encourage word-of-mouth referrals through multiple channels including intelligent popups, custom pages, and email campaigns.
This document is intended to provide a start-to-finish overview of the referral program workflow.

If you are looking for a practical guide to creating a referral program, see our step-by-step referral program setup guide.

What is a successful referral?

Though there may be many customers sharing their referral link with friends, a referral is only considered successful, or "completed" if it meets  these requirements:

1. The referred friend completes a purchase for the minimum spend amount (price after discount)
2. Must be the referred friend's first purchase
3. The user agent & IP address that clicks on the referral link must match the user agent & IP address that completes the purchase.

Things that may cause a referral to fail:

• If the customer clicked on the referral link but then made the purchase on a different IP address or user agent, the referring customer would not get the kickback.
• If the minimum spent amount was reached, but part of the sum was paid for using a coupon, this will not be counted as a completed referral. The minimum amount must be paid for with actual money and by using redemption options.
• The referral will only be completed if the minimum amount is spent on the first purchase made via the referral link. The amount cannot span across several purchases.
  
  See more about troubleshooting referrals
  How can I know if the referral failed due to a mismatch in the user agent & IP address?

  To be able to identify this mismatch, you will have to compare the user agent & IP address that clicked on the referral link vs the one that submitted the purchase.

  Check the IP address & user agent combination of the referral link click (under Referral Link Activity) and of the purchase (under Purchase History).

  See the guide on how to check for IP address/Device mismatch.

Customer Journey

Every step of this flow, including the location of particular experiences and default copy, has been tested and optimized across hundreds of our clients. There are 4 key parts to the referral program:

1. The referring customer sends their unique link to friends
2. The friend clicks on a referral link and makes a purchase
3. The referring customer checks their program status
4. The referring customer redeems existing credits

1. The referring customer sends their unique link to friends

Each customer has their own unique referral link, which you can disable/regenerate on your customer management page. We recommend that you tell the referring customer about your referral program in three key locations on your site:

• A dedicated landing page
• The account page
• Immediately post-purchase

Dedicated Landing Page

This page should briefly explain the program and then allow users to refer directly from the screen.

If the user is not logged in, we require them to log in/create an account (as we need their email address to attribute the referral to.)

If the user is already logged in, we would automatically skip straight to the next second screen.

Dedicated landing page best practices

This example reflects our current understanding of important best practices including the push to refer via email. We’ve found that sharing via email results in a substantially higher click and conversion rate compared to social shares.

After they log in, we lead them to a page that allows them to send their link to friends:

If the user shares via social mediaYotpo would trigger a prepopulated share message which would allow the referring customer to post/tweet with the message of your choosing (the user can also edit the message before posting).If the user shares via emailYotpo would send the Referral Share Email, which can be edited in the Triggered Emails section of your Loyalty admin. 

If you set up an integration with one of our email service providers (ESPs), we recommend triggering this as an event.

Whether via your ESP or Yotpo Loyalty & Referrals Triggered Emails, you can customize the text of the email. Learn more about Referral triggered emails

Account Page

In addition to other elements, we recommend adding the ability to refer friends on the account page as well:

Post-Checkout

Lastly, post-purchase is a great time to ask customers to refer their friends. You can do that by deploying a Refer Friends Module on your checkout/thank you page. Learn more about the ways to deploy post-purchase

2. The referred friend clicks on a referral link & makes a purchase

Once the friend clicks on the referral link, they will be redirected to the landing URL as defined in your referral program parameters. Once on the page, they will see a popup with a welcome message and a discount code. This welcome message can be updated for fonts and colors, but we recommend keeping the message straightforward from a stylistic perspective; data suggests that elaborate imagery and design can actually be distracting and harm conversion.

See how to customize the Referral Welcome popup.

What happens after a successful referral

When there's a successful referral, the referring customer will receive the reward based on what you’ve selected in the referral program parameters.

If that reward is store credit/points, that amount will instantly appear in the referring customer's account.

To bring things full circle, the referring customer must be notified they got points.
 
 That is typically done with an email called "Referrer Thank You", which can be edited in the Communications > Referrals Emails section of Yotpo Loyalty & Referrals. By default, a successful referral will trigger this email to be sent.

3. The referring customer checks their program status

The natural location for this is on the account or rewards page:

Build an interface using Yotpo's SDK, or simply use Yotpo's My Activity On-site module. The My Activity Module is a tool to show customers their activity in your loyalty program.

4. The referring customer uses their reward

There are several ways to let the referring customer redeem their reward towards a purchase. You can build your own user experience using Yotpo's SDK, or use our Interactive Redeem Points or Checkout on-site modules.

The modules are a highly-customizable way to let customers redeem their points for rewards. You can deploy a new module in minutes, with no development required.

Next steps

If you are ready to build your own referral program, see our step-by-step guide for a complete referral program setup