Referral Link: The Simple Guide (How,Why And When to Use One in 2020)

Referral links are ingrained in the digital marketing techniques associated with the current advertisement strategies of any company selling products or services.

According to Market Force, 81% of online customers in the United States get influenced by social media feeds on friends and family to make purchase decisions.

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

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

This article deep dives into the meaning, functions, and types of referral links. You can understand their uses and significance in the present marketing scenario.

What are Referral Links?

A referral link is a URL equipping an organization to advance its products, services or web content. They provide an incentive to customers and affiliate partners in the form of commissions, rewards, discount coupons, and other innovative schemes.

All customers who enrol for the referral program get referral links, which they can share with their friends, family, and acquaintances.

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

Referral 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 converts into a sale, the referral ID tracks down the account that provided the link and rewards the same on agreed terms.

Referral Link Example

How Is Referral Link Different from Referral Code?

A referral code is a subset of a referral link.

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

Some companies use referral code instead of referral link. Those codes are are asked during the sign up process.

So when users signs up, they are asked to enter their referral/discount code in order to receive a reward. In those cases, both the new customer and the person who referred her, receive a reward.

Referral Code
Referral Code
Registration page - invitation code
registration page

Why Use Referral Links?

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

In the brick and mortar world, affiliate and referral programs have yielded many successes 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 referral link containing a unique referral code whenever the customer is enrolled in the company’s affiliate program.

The company can start tracking conversions and related metrics as soon as the customer shares his/her referral link with their friends, family, or acquaintance, thereby creating a potential client.

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

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

Chris is a long-term customer of hoops and bangles.com, 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 sending her an invitation message.

He does this by sharing his unique referral link with her, which consists of a unique referral code.

Karen opens the message and clicks on this referral link.

She lands on the company’s webpage showing 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.

Through the referral link, Chris gets an incentive for referring Karen, such as a cashback on his next spend.

How are Referral Links Related To Referral Traffic?

A referral 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, referral links save significant time. Most advertisers share a singular objective: expanding traffic to their site.

Referral traffic is one of the fundamental marketing strategies that can have a significant effect on garnering more online audience.

Social media platforms, being the largest drivers of online traffic, often contain such referral links in their posts and, when clicked, takes the visitors to company websites.

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

Also, referral traffic is essential to social media advertisers since it redirects potential customers to the company website from other websites.

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

Referral links are successful when executed with careful planning.

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

Keep in mind these pointers to avoid making such mistakes

1. The brand should have adequate visibility

A company has to revisit its customer relationship and make sure people know them for the success of their referral program.

It can then promote their referral program on their websites, social media shout-outs, magazines, and emails. Build a base first.

2. Explain clearly how your referral program works

If you are going to impress someone, do it at your expense, not theirs.

You must have explainer videos or graphics entailing how your referral link program works and can benefit users.

Any company should make sure that each of their referral programs is consistent and does not mislead partners.

3. Do a market study

Your company’s referral programs are not going to achieve their goals if the clients feel that your products or services prove little in value.

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

4. Make it super easy

The tendency to do minimal work is inherent in people’s behavior. Incentivize your customers and clients with the same gravitas.

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

The marketing and technical team 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.

Credit to neilpatel.com

Conclusion

According to Nielsen, 92% of customers who buy online trust brand referrals.

Therefore, the success of referral links cannot be ignored un any efficient marketing campaign.

Various organizations propose referral programs for their clients.

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

Plan a value-based referral proposition for your clients, and you will see your referral conversions increase fruitfully.

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