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Referring Link Guide: How, Why & When to Use Them in 2024

By Liza Shuttleworth Last updated: 7 minute read Affiliate MarketingMarketing Guides

Referral or referring links are ingrained in the digital marketing techniques associated with any company’s current advertising strategy.

According to Forbes, 80% of online customers in the United States are influenced by social media feeds or friends and family when making purchase decisions.

Also, 78% of these people consider social media posts from brands helpful in their purchases.

This huge chunk of paying traffic is referral traffic, and it converts into money for both the business and the people sharing these references. This happens through referring links!

This article explores the meaning, functions, and types of referring links. It helps readers understand their uses and significance in the present marketing scenario.

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    What Are Referring Links?

    A referral or referring link is a URL that equips an organization to advance its products, services, or web content. These links incentivize customers and affiliate partners through commissions, rewards, discount coupons, and other innovative schemes.

    All customers enrolling in the referral program get reward links to share with friends, family, and acquaintances.

    On a professional level, affiliate marketers are the biggest users of reward links.

    Referring links are coded to be trackable. Therefore, courtesy of marketing automation, you automatically earn rewards when your link converts each time. 

    Once the link is clicked and converted into a sale, the referring ID tracks down the account that provided it and rewards it on agreed-upon terms.

    Referral Link Example

    How Is Referring Link Different from Referral Code?

    A referral code is a subset of a referring link.

    Referring links will be common for a particular campaign. However, the codes are unique identifiers that enable tracking of these links to each profile!

    Some companies use referring codes instead of referring links. Those codes are requested during the sign-up process.

    So, when users sign up, they are asked to enter their invite/discount code to receive a reward. In those cases, the new customer and the person referred to them receive a reward.

    Referral Code
    Referral Code
    Registration page - invitation code
    registration page

    Why Use Referring Links?.

    Each company needs to convert its online traffic into paying customers to prosper.

    Affiliate and referring programs like Amway

    Amyway report Sales
    Amyway start a business

    Therefore, it only begs to consider that such incentive-based schemes will also work online. And they do!

    Let’s check out how using referrals can be useful through some live examples:

    The website and its backend system generate a referring link containing a unique referral code whenever a customer is enrolled in the company’s affiliate program.

    The company can start tracking conversions and related metrics when the customer shares their specific link with friends, family, or acquaintances, thereby creating a new potential client.

    The same goes for affiliate partners but on a larger scale.

    Let us understand the function of a referring link by taking Chris’s example:

    Chris is a long-term customer of Hoops and, an online marketplace for fashion apparel. He appreciates the company’s services and products.

    He is also a member of the company’s referral program.

    Chris recommends the company’s offerings to his friend Karen by inviting her.

    He does this by sharing his unique link with her, including a unique referral code.

    Karen opens the message and clicks on this refer link.

    She lands on the company’s webpage, which shows a message that her friend Chris referred her to use the company’s services and products.

    Karen also sees, in the message, that she gets a 20% discount on her first purchase from the company’s website.

    This link incentivizes Chris to refer Karen, such as a cashback on his next spending.

    How Are Referring Links Related To Referral Traffic?

    A referring link makes it easier to track the performance of an affiliate customer.

    They provide real-time insights on the addition of new customers.

    These insights can be used to develop filtered sales funnels, marketing campaigns, and tailor-made products that suit various customer profiles.

    Therefore, these unique links save significant time. Most advertisers share a singular objective: expanding traffic to their site.

    Referral traffic is one fundamental marketing strategy that can significantly increase an online audience.

    Social media platforms, the largest drivers of online traffic, often contain such unique links in their posts, which, when clicked, take the visitor to a company website.

    Now that most of these platforms are monetizable, referral campaigns already see a lot of innovation in rich content that invites engagement.

    Referral traffic is also essential to social media advertisers as it redirects potential customers from other websites to the company website.

    This gives added visibility to the company’s products and services. This strategy allows the company website to transform guest visitors into customers.

    Referring links are successful when executed with careful planning.

    Abruptly putting up products for referrals without branding and adding value and information may yield bad results.

    Keep these Pointers in Mind to Make the Most of Your Referrals

    1. Adequate brand visibility

    Revisit your customer relationships and ensure your brand is known for the success of your referral program.

    You can promote your referral program on the brand’s websites, social media channels, shout-outs, magazines, and emails. First, build a base.

    2. Explain clearly how your referral program works

    If you will impress someone, do it at your expense, not theirs.

    Create explainer videos or graphics detailing how your referral unique link program works and how it will benefit users.

    Any company should ensure that each referral program is consistent and does not mislead partners.

    3. Do a market study

    Your company’s referral programs will not achieve their goals if the clients feel that your products or services provide too little value.

    Invest in a relevant market study before introducing referral programs. Make sure that what you offer generates interest, need, and demand.

    4. Make it super easy

    People’s tendency to do minimal work is inherent in their behavior. Therefore, incentivize your customers and clients with the same gravitas.

    More value and less effort (from customers) leads to more customers. Period!

    The marketing and technical teams have to work together to increase the engagement of any referral program.

    Starting from the UI/UX, tutorials and accounting, everything should delight your affiliates and referral partners.
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    According to Nielsen, 92% of online customers trust brand referrals.

    Therefore, the success of these links cannot be ignored without an efficient marketing campaign.

    Various organizations propose referral programs for their clients.

    It acquires better traffic to the business and is rewarding for its clients. Many firms are focusing on providing customized referral programs as a service.

    Plan a value-based referral proposition for your clients; your referral conversions will increase fruitfully.

    Frequently Asked Questions

    What is a referral link?

    A referral link is a unique URL that allows a business or company to market its products, services or web content through link sharing. The link provides an incentive for customers and affiliate partners to share the links with others for certain rewards, such as commissions, discount coupons and other innovative reward schemes. These links are traceable through automation codes, so points are generated every time a customer shares a link.

    How to create a referral link?

    Step 1: Identify the best referral method or software for your business- (e.g. Ambassador, Referral Rock, Extole, Genius Referrals, Viral Loops etc.). Some businesses can do referral programs without software, however it can be very challenging keeping track of unique referral codes for large companies.
    Step 2: Get customers to join the referral program- either through email or social media platforms. Once they sign up for the referral program, a unique referral link will be generated for them to be able to share.
    Step 3: Have the customer/s share their referral links- a unique code will be included in their referral link that will allow them to share and to generate points automatically.
    Step 4: Encourage leads to click a referral link- use an image or message or landing page with CTA to actually get leads to select the link.
    Step 5: Obtaining code redemption from their referral code- here you will need to keep track of the referral codes. If using referral software, this will be very easy. However if you are not using software, you can get customers to complete a form in store or at an e-commerce checkout. You can also train staff to take the code or have a dedicated referral page on your website.

    What is a referral code?

    A referral code is a subset of a referral link, which is a unique combination of numbers and letters to form a unique identifier. This code allows businesses to track the referral to who did the actual referral. So in the case of a referral program, this means that the rewards or cash will go to the correct person.