Tips to Apply Your Referral Marketing Program through Social Commerce


Aug 2, 2021 • 7 min read

Tips Terapkan Referral Marketing Program dalam Social Commerce

In an all-new era where conventional business channels are getting more packed with competitors, businesses need new ways to increase revenue. One of the well-rounded strategies is using a referral program, which relies on customers, employees, or anyone related to the business to do promotions. To encourage the referral process, businesses can utilize social commerce, which gives incentives and rewards for customers who make sales from their referral activity. Let us learn how to apply referral marketing programs in your social commerce and make it more profitable!

Referral programs

Are you familiar with referral programs? A referral program empowers anyone to refer or recommend your business to other people. With referral programs, you don’t require much cost to acquire new customers because you can do so with the help of people who already master and adore your products and services—your most loyal customers. Moreover, this marketing strategy is highly effective. As discovered by Nielsen, people are 4 times more likely to make a purchase when they get a recommendation from a friend.

With referral programs, customers sign up and get a unique link that they can share to refer your business to anyone they know. If your referral program is combined with your social commerce, the link will lead to the product catalogue of your customer. Potential customers can make a purchase directly, and the referrer will get referral incentives or referral rewards for the successful promotion and sales they do.

People are 4 times more likely to make a purchase when they get a recommendation from a friend.


Referral marketing ideas for your referral program

To incentivize customers to do referral activity, you need to have an attractive program that encourages them to participate. Here are some referral marketing ideas for you!

  1. Referral contests

    Make your referral program more engaging with contests! Establish a target for the week or month that customers need to reach in order to claim certain rewards. You can implement this for customers who promote your business or sell your products (if you are having a social commerce program). Give awards and prizes to your top referrers to instill a competitive spirit in your customers.
  2. Do customer retargeting

    Retargeting is monitoring and tracking potential customers who visit your social media accounts or website. When they just browse your page without making a purchase, they might be interested, but still need that extra push. Referral rewards can be the push needed to convert them! Give a pop-up notification about your ongoing referral program and entice them with the benefits they might get for making a purchase and signing up.
  3. Have a mystery gift

    At the beginning of your program, surely you have to make your referral incentives clear to your customers. But once the program is running, you can have occasional mystery gift campaigns to spice things up. For a certain period of time, give referral incentives that are completely a secret until customers earn them, such as a mystery amount of cash or an all-new product. Mystery gifts stir up customers’ curiosity and make them more engaged in your referral program.

Types of referral incentives

Customers sign up on your referral program not just because they enjoy your products, but also want to enjoy the rewards you offer for their referral activity. Here are some referral incentives you can use to increase referral activity.

  1. Cash

    The most practical and universal form of referral incentives is cash. It is also a scalable incentive which can be fairly given for the least to the most sales. There are many ways to calculate the cash referral incentive for your customers, such as:
    1) Percentage-based incentives
    The easiest way to calculate cash referral incentive is through percentages. Set a constant percentage for each customer that works for any type of product sold, such as 10% from the product price.
    2) Fixed incentives
    If your products are similar in price, you can use the fixed incentive system, so customers get the same amount of incentive no matter which product they sell.
    3) Product-based incentives
    Unlike fixed incentives, this referral incentive varies based on your product value. You can give higher incentives for your more expensive products and vice versa.
    Aside from cash incentives, there are also other referral incentives you can offer in your referral program.
  2. Coupons

    With coupons, you can increase customer loyalty and encourage repeat purchase at the same time. There are many types of coupons you can choose. For example, give them a 10% off coupon after selling a certain number of products in your social commerce program. Alternatively, you can give store credit coupons with a certain amount which customers can use to shop from you without paying money.
  3. Physical items or merchandise

    Physical items are also an attractive form of referral incentives. You can give it to customers after they have brought a certain number of new customers or sell a certain number of products. The physical items can be the favorite items from your store or exclusive merchandise such as tote bags and other items.
  4. Access to special features

    Referral incentives can also take the form of exclusive experiences for customers. Make them feel more valued for the referral marketing activity they do. Give incentives such as upgrades for the products they buy, invitation to special events, or even exclusive access to new products before their official launch

Ways to distribute referral rewards

After determining the type of referral incentive or referral rewards you deem most suitable for your referral program, it’s time to choose the best way of distributing them. There are many ways to do this based on the type and urgency of your referral rewards.

  1. Email

    For referral rewards with a long redemption period or a more detailed term of use, you can go for emails. This works best for coupon or voucher incentives. Emails allow you more space to explain the terms of use of your referral rewards.
  2. SMS

    For referral rewards that are more concise and urgent, you can use the SMS channel. You can include a link that customers can click to be directed to the referral rewards redemption page after they successfully obtain them.
  3. Push notifications

    Engage customers at any time and anywhere with push notifications! With TADA’s social commerce program, customers will have their own app to carry their referral marketing activity. They will get push notifications for every referral reward that they get. Customers will feel a greater sense of urgency to use their rewards.

Key Takeaways

A referral marketing program is a well-rounded strategy to boost revenue through an entirely new sales channel. It is also efficient as it relies on anyone who is already loyal to your business. Referral marketing allows you to get more customers and increase the loyalty of those you already have. Keeping your program engaging is a sure way to attract and retain customers into signing up. By choosing the right type of referral rewards such as cash, coupons, and physical gifts, and distributing them through multiple channels, you can carry on with your program without taking up too much cost, keeping it profitable. TADA is happy to provide referral program and social commerce solutions that work best for your business. Start implementing referral marketing programs in your social commerce with us

Request a Demo


Nida Amalia

SEO and Content Marketing Specialist who loves art, music, and movie.