How do consumers research potential purchases in your industry? Most people search the web for reviews, recommendations, and price comparisons before they buy. Those searches will bring them to blogs and video clips that are supported by affiliate income. If you want your brand mentioned in the content they encounter, you’ll need to learn how to run a successful referral program.
Affiliate marketing is on the rise. By 2022, affiliate sales will have tripled in five years. Google searches for “affiliate marketing” are also up 200% since 2015. And on top of using a referral program with affiliates, referral link tracking can also be used to encourage your customers to recommend your brand to their friends and family.
How does referral tracking work? Your customers or affiliates register to become referrers for your brand, and you give them a unique link or code to share. When someone uses that link or code to make a purchase on your site, those actions are tracked, and the referrers are rewarded for the sales.
Besides bringing relevant traffic to your website, learning how to run a successful referral program can help your business grow in several ways. It can:
- Amp up customer loyalty
- Collect data about your buyer’s journey so you can optimize your sales process
- Encourage your customers to recommend you to their networks
- Increase brand awareness
- Invite influencers in your industry to recommend your brand
- Prompt industry-related websites to review or compare your offerings
Below, you’ll learn all the steps to effectively harness the power of word-of-mouth advertising for your business — even if you’ve never worked with referral tracking before.
How to Run a Successful Referral Program
Setting up a referral program is less complicated than you might imagine. Follow these ten steps to success.
1. Sketch an Overview
Before you begin to develop a referral program, make sure you have a clear picture of what you hope to accomplish. You and your team members must all be on the same page.
Here are some questions to ask before you begin:
- Who will oversee this program and take responsibility for it?
- How much time can that person invest in managing the program once it’s up and running?
- Do you have the talent you need in-house to create affiliate marketing messages, tools, and landing pages?
- Are you hoping to attract influencers as affiliates, focusing on incentivizing your customer base to make referrals or both?
- Which products, services, or actions on your website have enough value for you to pay incentives for referrals — and how much can you offer as an incentive to referrers?
- Do you have reliable systems in place to welcome new customers and build relationships with them?
2. Define Goals
Well-defined goals will help you measure your referral program’s performance and progress against the right benchmarks.
You’re probably already familiar with the idea of SMART goals, but here’s a quick review. Clear and achievable goals should be:
If your referral program has a goal to drive sales, you can evaluate your progress quickly. But if its execution is designed to achieve less tangible goals, like customer loyalty or brand awareness, it’s important to quantify how you will measure growth in that area. Your benchmarks might include:
- Dollar volume of sales generated monthly
- Improvements in your site’s Google rankings
- New brand mentions across the internet
- Percentage of your customer base participating in the program
- Total number of affiliate sign-ups
- Web traffic metrics, such as visits to landing pages
3. Choose Software
The right software can help you figure out how to run a successful referral program quickly and efficiently.
Look for a program that’s tailored specifically toward helping businesses like yours generate new sales. Your software should make it easy to automate your processes and track performance, and it should offer a simple interface so your team can get things done without a lot of special training.
LeadDyno software integrates with shopping carts, CRMs, and email marketing platforms to make affiliate tracking effortless. The online solution automatically tracks referral links and helps you to easily manage affiliates and payouts. Tools that increase affiliate engagement are built right into the system, too.
With LeadDyno, it’s easy to communicate and send payments right from the app. LeadDyno also helps you identify which marketing channels bring you the most business, so optimizing online marketing spending becomes easier.
4. Establish Incentives
How will you reward your affiliates for their referrals?
If your main goal is to entice existing customers to refer to their networks, you might have success in offering discounts, upgrades, account credits, free samples, and other incentives. Non-monetary incentives like free access to paid software features can be very enticing to your customers and very cost-effective for you.
However, if you want to attract influencers, bloggers, review sites, and other general affiliates outside your customer base, cash is the most effective incentive. A standardized reward structure, like a flat payment for each referral or a percentage of the total sale, is the simplest to track and implement. It’s easy for your affiliates to understand, as well.
Some affiliate programs use a tiered structure that either increases or decreases at a certain level. The referrer might get $5 per sale for the first five sales and then increase to $10 per sale — or decrease to $1 per purchase — after that point. A system like this can serve a purpose, but it’s more complex to implement. There’s also a risk that your affiliates will misunderstand and rebel against payouts they consider unfair.
Make sure you choose an incentive that you can afford to continue offering. If you have to lower your payout after you’ve already attracted affiliates, you’ll lose their trust. It’s better to start low and increase your incentive later on.
5. Develop Tools
The marketing tools you develop for your affiliates can help make their success your success, in many cases. The best affiliate programs offer a variety of tools that affiliates can choose from to market your brand.
A text link to your landing page with the referral tracking code is vital. You might offer a primary text link plus links to a few alternative landing pages that suit different situations.
Your affiliates should have access to your logo, product photos, screenshots, and other images to aid in promoting your brand. Providing affiliates with infographics and brief promotional videos to share or embed may boost sales. Keep an up-to-date library for affiliates — and offer seasonal and topical graphics, as well.
One of the most crucial lessons in running a successful referral program is prioritizing messaging. Make it easy for your affiliates to talk about your brand by giving them the language they can use to promote your brand, even if they’re not intimately familiar with everything you offer. Give them some phrases, sentences, or bullet points that highlight your main selling features. Lists of product features, benefits, and pricing information can be helpful, as well.
Some brands offer pre-written blog and social media posts that affiliates can use. Freshen these up regularly, so you’re not seeding the web with too many duplicates. Offer seasonal messaging as well as evergreen content.
Widgets and Forms
Interactive features work well for some industries. For instance, World Nomads travel insurance lets affiliates embed a widget that invites the customer to enter some basic information about their trip and receive a bid. Submitting the form on the affiliate’s site takes the customer to the World Nomads site to make the purchase. Another example is Amazon’s way of offering its affiliates interactive elements like search boxes and affiliate-built recommendation boxes.
Quick-loading banners that focus on a single product benefit and feature a strong call-to-action are an effective tool. You can create them using Canva and make them available in different standard sizes.
6. Create a Landing Page
Craft a page on your website where potential affiliates can get all the information they need about your program. This is essentially a sales page that will be accessible to the public, so don’t put your affiliate marketing tools and link information there. You should share those privately with your affiliates by email and in a password-protected area of your site.
Keep the landing page brief and breezy. Include enough information to entice a viewer to either sign up for your program or request more information. You can follow up with them by email and make your call-to-action visible and strong.
Optimize the page for SEO and add it to your main navigation menu, so it’s easy to find.
7. Set up Analytics
If you’re using a referral software system like LeadDyno, you already have a full set of analytic features at your fingertips. These features can help you test, track, and optimize your program — and they can assist in managing your payouts, too.
LeadDyno will help you see which type of messaging and which graphics are working well. It can help you stay engaged with your affiliates, too. You can keep affiliates informed as you learn about best practices and make necessary adjustments to your program and marketing tools.
Without a dedicated system, you’ll need to create your own method to generate unique links for affiliates. You’ll also need to set up Google Analytics so you can track each affiliate’s referrals and test different marketing tools.
8. Recruit Affiliates
You can’t learn how to build a successful referral program without handling affiliates.
Are your goals, systems, and incentives in place? If so, you’re ready to recruit some affiliates. Apart from making sure your affiliate program is visible all over your site — not just on one landing page — here are other ways of reaching out to potential referrers:
- Advertisements. Paid ads can reach people who are looking for programs like yours.
- Affiliate groups on Facebook or LinkedIn. Don’t spam, but mention your program when it’s appropriate.
- Individual outreach. Send personal invites to bloggers and influencers in your industry.
- Industry groups. Let other members of any groups you’re in know about your program.
- Strategic partnerships: Your vendors, contractors, and other non-competitors might make good affiliates.
- Your email list. Start by inviting subscribers who are already interested in your brand.
9. Nurture Relationships
As you build an affiliate network, make sure you have a system that builds strong relationships with them. Send regular emails, survey them about their needs and desires, and keep providing them with fresh creative content for marketing to be successful.
The 80/20 rule applies to referral programs, too. About 80% of your sales will come from 20% of your affiliates. Be sure to give those affiliates an extra dose of recognition and attention.
Apart from recognizing hard work, keep your referral network happy by giving advance notice of new promotions, so they have time to plan and implement their approach. Treat your affiliates as valued business partners by responding quickly to their questions and making sure their payments are always accurate and on time.
Keep communication flowing with your affiliates, and continue to refine your recruitment efforts as you go forward.
10. Review and Enhance
As your program matures, it will need continued attention to thrive. Internet marketing is a dynamic space, and things change quickly. You’ll soon fall behind if you’re not continually updating your landing page, communication practices, and creative content for marketing.
Making a specific person on your team responsible for tracking and optimizing your program — and regularly reviewing performance and metrics with them — is the best way to ensure that your referral program will continue to grow.
How to Take Control Through Referral Link Tracking
Marketers have known for decades that word of mouth is a powerful marketing tool. Referral link tracking lets you take control of that power — by rewarding content creators, influencers, and customers who send business to your brand.
Creating a referral link tracking program is a straightforward process. Once you’ve set goals and parameters for your program, you only need to develop incentives and creatives for your affiliates, build a landing page, and build relationships with influencers.
Implementing a system for tracking referrals and paying your affiliates is the most challenging piece of the process, but the right software makes it easy. A 30-day free trial with LeadDyno will show you how effortlessly you can track and manage your referrals, build relationships with affiliates, and continually optimize your referral network.