Drive LTV and new customer acquisition all whilst driving down the cost of bringing on new customers.
By getting the mechanism for customer referrals right you create a light-touch evergreen flywheel that effortlessly generates customers, both new and returning.
A good customer referral strategy is a great way to leverage your customer evangelists as micro-influencers. By correctly utilising customer referral apps, you can amplify the power of loyal customers to boost your business.
There are many ways to incentivise this behaviour but essentially when a customer recommends your store to a friend, they both get something of value (usually a discount on their next purchase), while you gain an additional customer at a very profitable CAC (make sure the discount makes sense to your margins). In creating this flywheel of low-cost, highly targeted word-of-mouth advertising it will continue to scale as your brand generates more customers.
TIP: set up a campaign on Facebook that retargets everybody who has bought from your brand over X months, and serve them ads to refer-a-friend. Send them straight to a purpose-built landing page on your site and opt for the app that provides the best customer experience for your customers and viola; you have a post-purchase strategy which delivers a positive viral coefficient for acquisition.
Today, we’re sharing five of the best Shopify referral apps in 2022.
Do D2C brands need word-of-mouth marketing?
D2C brands can’t rely on other retailers to build customer trust in their brand, which makes word-of-mouth marketing all the more critical.
88% of people show the highest level of trust in a brand when a friend or family member recommends it. These leads are likely to be a good fit for your business, too. The average value of a referred customer is at least 16% higher than that of a non-referred customer.
What’s more, word-of-mouth marketing is a budget-friendly option; it can cost five times less to acquire users through referrals than through ads.
Measuring success with Shopify referral apps
When it comes to eCommerce referral programmes, remember to keep a close eye on actionable metrics and not just vanity metrics. Here are the pros and cons of a few metrics you might consider monitoring when you install a Shopify referral app:
- Participation rate
Participation rate won’t give you a clear idea of how successful the programme is overall, but it will help you compare how many customers convert with how many enter the programme.
- Click through rate
When a customer or potential customer sees your referral widget, how many of them click? If the answer is ‘not many’, it’s time to consider A/B testing.
Monitoring impressions can help you work out whether your campaign is being seen, but it doesn’t always give you actionable goals.
- Referral Conversion Rate
One of the most important metrics is actual sales. When a customer’s friend visits your store, do they buy? Does your initial customer buy, too?
- Percentage of total sales
Percentage of total sales refers to how referrals contribute to your overall sales. You can also use this alongside metrics like Customer Acquisition Costs (CAC) and Average Order Value (AOV) to see how referral marketing works for you compared with other marketing strategies.
To find out more about choosing metrics, read our recent article on how to measure success.
With all this in mind, let’s explore our recommendations for the best Shopify referral apps:
Managing referral codes manually can be time-consuming. ReferralCandy does the work for you with the option to automate your entire referral programme through post-purchase popups and emails.
What we love about Referral Candy:
- Pay based on the value the app brings – store owners pay a base fee plus commission on their referred sales.
- Choose between store discounts or cash rewards for customers.
- Integrates with your existing marketing tools.
- Optional affiliate programme means you can do more without switching apps.
- Stay on top of fraud with alerts about suspicious activity, including self-referrals, high volumes, and code leaks.
- Free trial – 30 days
- Premium Plan – $49 per month + commission (0.25% to 5%)
- Enterprise Plan – $3,999 per month
You can learn more about ReferralCandy here.
This app is a free, ready-to-use version of the full Talkable platform. It’s best for small and medium-size stores; there’s quick set-up, but you still decide which rewards are given out.
What we love about Talkable Referrals:
- The Shopify referral app is based on the full platform, so you know you’re following a trusted model.
- Customers can choose how they share their referral link: by email or on social media.
- Start with a professionally designed page and email template, then quickly customise to suit your brand.
- Screen preview shows what your customers will see on desktop and mobile.
- Stop fraudulent self-referrals, so your programme targets the right people.
- Free (lite version) – paid plans will be added in the future.
You can learn more about Talkable here.
Referral Factory helps you build, brand, and monitor your programme. You can see at a glance who’s joined and how they’ve converted, so you can make data-driven decisions to increase online sales.
What we love about Referral Factory:
- 1000 programme templates to get you up and running quickly.
- Drag and drop page builder means you can brand elements as your own without coding.
- Advanced referral tracking that helps detect and prevent fraud, including duplicate and self-referrals.
- Over 20 translation options so you can incentivise customers in different regions.
- Control what qualifies as a successful referral based on order value and status.
- Opt-in buttons to help with user privacy and GDPR regulations.
- Free trial – 15 days
- Starter plan (no Shopify integration) – $95 per month
- Basic plan – $200 per month
- Pro plan – $300 per month
- Enterprise plan – $1,400 per month
You can learn more about Referral Factory here.
Friendbuy is a comprehensive platform that lets you offer rewards for valuable customer actions such as referrals, app downloads, and email subscriptions. The company boasts up to 25x return on spend.
What we love about Friendbuy:
- Build referral and loyalty programmes easily from the same app.
- Automate your programme so you can focus on other areas of your store.
- Shopify plus merchants can offer store credit rewards, so your customers can save for something they really want.
- A/B test any step in your funnel and monitor its success; learn what’s working and why.
- Referral dashboard means you can track invitations and send reminder emails about the reward.
- Fraud prevention with custom controls to help you deliver a successful programme.
- Free trial – 30 days
- Starter – $249 per month
- Deluxe – $749 per month
- Enterprise – POA
You can learn more about Friendbuy here.
UpPromote isn’t a typical Shopify referral app. It’s largely an automated affiliate marketing platform. However, a recent update brings new referral features that can be activated or deactivated in a click.
What we love about UpPromote’s referral programme:
- Having both affiliate and referral options gives store owners scope to scale up marketing strategies as they need.
- Flat-rate and percentage-based rewards available, and free shipping for friends.
- In-depth reports let you see how your campaigns are doing in terms of clicks, sales, referrals, and commissions.
- Choose where and how you want to display the widget on your website.
- Free plan
- Growth – $21.99 per month
- Professional – $69.99 per month
- Enterprise – $139.99 per month
You can learn more about UpPromote’s referral features here.
There are plenty of brilliant Shopify referral apps to help spread the word about your store. Each one incentivises your customers to tell their friends. But while they seem similar, it’s important to work out which features will make your eCommerce referral program easy to set up and simple to run. That way, you know you’re using the best tools for your store.