Referral marketing is nothing more than word of mouth advertising. It refers to people who have acquired a product based exclusively on this decision on the opinion or influence of another person. Therefore, it is essential for you to properly track who is referring you.
When you are looking for the best referral tracking software for your store, it is important to understand what sort of tools you need help run and grow your business. Referral tracking software can help companies gather a wealth of information about users, whether it’s the sites where users typically spend time or products that have shown user interest.
What is referral Tracking System?
Referral marketing program is made since people generally rely on the opinions of others in their environment or those they respect, which includes family, friends, influencers and celebrities. This makes sense, since it is very common for people to seek advice about movies, restaurants or books in their friends and family, relying on their opinion. It’s about sharing experiences, and consumers are always interested in sharing theirs regarding the brands or products they choose.
Now, imagine your online store is referred by not one, but a lot of people. Then, you will have a homework to track which sales is referred by whom. Referral tracking system works like that. It gives your referrals a certain code or link that if buyers apply the code when checking out, you will know which referral is referring that sales.
When do you need a referral Tracking System?
Basically, if you want to track your referral sales correctly, you will always need to have referral tracking system an affiliate program software will help. Tracking is an indispensable tool in eCommerce and helps you to optimize your shop and increase sales, if you make the data evaluation correctly. Therefore, when you have:
- Online store that has referral program;
- Online store that wants to boost free traffic through referral marketing;
- Desire to be successful in your referral marketing effort;
You will need reliable referral tracking system.
Best Referral Tracking for Shopify
Shopify is the best e-commerce software on the market that allows users to create their own online stores at affordable prices. Shopify guarantees a low level of risk for entrepreneurs who want to open an online store. This is achieved due to the fact that you can create a Shopify account for free. This will allow for two weeks to personally verify that the platform is suitable for your business.
You can get free access to all necessary functions. Use the trial period to decide which tools you need to continue. If you decide that, for whatever reason, this platform does not suit you, you can simply delete your account.
Omni Startell, on the other hand, is the best referral tracking software for shopify in terms of price, features, and customer support. In short, the software allows you to:
- Auto-signup your customer to be referral
- Enable smart Rewards
- Deliver beautiful pop up form
- Do referral partnership automation
- Provide discount codes, banners, and unique coupons to your referral
Why is Referral Marketing Important?
Referral marketing has established itself as one of the best ways to increase sales and generate conversions. One of its main components, references, is commonly used to promote a product or service, in a given environment, at an almost imperceptible cost.
The opinion of your customers, if the shopping experience was pleasant and successful, can be a clear incentive to buy your products or services. To do this, it is important to create a referral marketing strategy that makes it easier for your customers to recommend you.
What is the difference between referral marketing and affiliate marketing?
Word of mouth is the mechanism for the distribution of advertising messages in today’s fashionable “viral” commercials.
Referral marketing has a similar effect, but is managed and initiated directly by the company. Typically, the client is given some reward for attracting other people. For example, for each attracted client, you can reward the account with cashbacks, coupons, or cash (let’s say $10 per referred person). It is important that the attracted client also receives something, otherwise the mechanics will not work well, for example, the same $10 into their account.
So, what is the difference between referral marketing and affiliate marketing? The key difference is that, partners and webmasters participating in affiliate programs do this to generate income, not bonuses from the company. In many cases, they are not even clients of a company whose products or services are being promoted. Therefore, affiliate marketing involves the participation of professional marketers, and not ordinary customers of the company who are looking for an opportunity to save or receive a pleasant promotion from the brand.
Both affiliate and referral marketing are result oriented. However, these are two completely different approaches to attracting clients. At last, both are effective strategy.
What is a good referral rate?
The ideal referral rate depends on many factors such as the type of product you have, what kind of reward you will give as well as the simplicity to deliver the rewards. Roughly, for e-commerce business, we often see that they will give 3-10% commission from referral purchase. Some other store even applies a flat value reward for every single buyer the referral refers. For example, a referral gets $10 Amazon gift card for every purchased customer they refer.
In case of store with digital product, the ideal referral rate can be higher. The average range is between 20% to 50%.
How to Generate Referrals From Existing Customers?
There are two ways you can do this. The first one is by automating the signup process as a referral once you acquire a new customer. This way, everyone who has purchased anything from your store is eligible to be your store referral. He gains instant access to referral code, banners, and more.
The second way to do it is by using manual sign up platform. In this case, you will provide a special sign up form to be referral then you approve it either manually or automatically. This is useful in case you need to understand who is interested to promote your store or business.
8 Best Ways to Track Your Referrals
There are various ways through which you can track your referrals. The following are the top 8 ways to track your referrals, and we have tried to explain each of them.
Referral Tracking Spreadsheets
The key to the success of a referral program is the effective management of your referral database. If through any means you achieve it, you are on the right path. There are many paid software that helps you keep track of your referrals, but if you want to handle the process yourself, creating spreadsheets manually can be quite useful. In fact, if you are a small business, maintaining spreadsheets manually for your referrals can save money. Obviously, manually handling the data can be tricky, especially for larger companies where there are thousands of referrals each month. But, if you are a small business, it is quite manageable; the only thing that you need to take care of is generating a unique referral ID for each of your promoters. You can use Google Sheet or Excel to create spreadsheets.
Another great option for tracking your referrals is by using Google Analytics. Google Analytics is a brilliant platform that gets all the details and insights into customer trends and helps you track conversions. Not only will it help you keep track of your referrals, but it will also enable you to identify the areas of your websites where there is a need for improvement. It will tell you which part of your website is doing good and which isn’t. The best part about this software is the fact that it is totally free. All these great features without paying a penny is a perfect bargain.
UTM parameters, also known as UTM tags, are texts that can be customized to your liking and are used by Google Analytics software to track campaign traffic. As this process requires the usage of Google Analytics, it is free, but it requires a lot more work than a paid tracking software. These UTM parameters differentiate between traffic coming from different sources to your website.
To track your referrals, you need to assign unique UTM parameters to your customers/promoters, which they will share with their friends and family. Once you have assigned these URL parameters, you need to set up a Campaign URL builder in Google Analytics to track these URLs back. Using UTM parameters is a brilliant way to track referrals; however, the work involved can be overwhelming if you have a very large business.
Like UTM parameters, you can also allot customized Coupon Codes to your customers to track their referrals. Every customer will have a unique coupon code, and when he will share it with his friends and family, you can easily track it. But for this, you will need to manage data for all the coupon codes that you have distributed among your customers. Otherwise, tracking will become a nightmare.
Redirected Referral Pages
If you have not shared URLs among your customers for referrals, then the new potential customers will more likely visit your website directly. However, if you have given referral URLs to your customers, you can redirect a referral page and extract the customers’ necessary information based on his browsing history. So, redirecting a referral page will help you control what to show to your new customer, which is very useful for eCommerce businesses.
Referring Form Fields
If you use the internet, then at some point in your life, you must have had filled a form in which specific information was asked. This is because companies use forms to learn about their customers, which helps them analyze customer trends. So, it can be very valuable to add a referring form on your website.
Redirect Individuals After Completing Forms
In some scenarios, placing additional scripts to your referral capture pages is not an option, and this is when redirecting comes into the game. Once your customer fills out a form, you get the information from the source URL and apply it to the confirmation page. Based on the extracted information, you can redirect your customers to the relevant landing page. For example, if a customer is interested in buying sports goods, you redirect them to the sports section. Similarly, if a customer is interested in buying beauty products, you send them to the beauty section. This technique is beneficial for such businesses that involve customers to be directed back to their site form other third-party sites.
Referral Tracking Software
By now, you have seen different ways to track referral traffic, but in every way, you had to do some manual work. However, if you want to automate the process of referral tracking, getting access to a paid referral tracking software is the answer. A good referral tracking software is easy to set up and gets started in a few minutes. A Referral tracking software generates referral codes, tracks those codes, and automatically rewards them without any mistake, which takes all burden off your shoulders.
Why Should You Track Referrals?
The primary purpose of a referral program is to get more customers. You ask your current customers to refer your business to their friends and family, and as a result, you get more new customers. But when your customers are increasing every day, the number of referrals can go sky-high. No matter how you track your referral; whether you do it manually or using specialized software, you must always know which of your customers is bringing in new customers.
By tracking referrals, not only will you be able to reward the deserving customers, but also be able to generate an adequate amount of word-of-mouth marketing. The following are some of the top reasons to track referrals.
Gauge Customer Satisfaction
Tracking a referral program is the best way to get customers insight and know whether your customers are satisfied with your services or not. If your customers are satisfied, they are more likely to refer your business to the people they know, no matter if you have good rewards for referrals or not. However, if you provide quality services and have an excellent referral program in place, you will achieve a steady and healthy referral flow. There are different software that can be used to calculate customers’ satisfaction and gratifications; some of them include Net Promoter Score (NPS) and Customer Effort Score (CES).
Understand Any Changes in Sales
Have you been experiencing a boom in your business? Are you generating a lot more sales? Is your profit skyrocketing? Then you have every reason to be excited and happy, but not knowing the reason for such a spike can be bothersome. Is that the new sale that you have put up on your store, or is it the new advertisement that you aired? To know exactly what is causing the changes in sales, you can make use of the referral program to track the referrals, and ultimately double your effort in a specific direction.
View Customer Participation Rate
After you have launched your referral program, you need customer participation to make it a success. If you have a smaller number of customers signing up for your referral program, you will not get many referrals. So, tracking your referrals will help you notice the customer participation rate, thus, enabling you to decide whether you need to improve the incentives or not. If you have lower participation, try increasing the incentives for each referral. More significant rewards will attract your customers to make referrals.
Track the Conversion Rate
Tracking referrals also help you to track the conversion rate. In a referral program, a customer might share the referral link multiple times but only manage to get a couple of referrals. So, if you are tracking the conversion rates, you will know how much time it takes for a referral to interact with your business. Knowing the conversion rate will enable you to find out the flaws in your referral campaign, and you will be able to make the necessary changes to achieve your desired goals and better engagement.
Referral Tracking FAQs
What else can be done by a referral program?
A referral program helps you to reward your customers based on their referrals. So, if a customer has successfully brought a new customer or a new sale is conducted by referral, you can give rewards both manually and automatically.
What is the Conversion Tracking Script?
A conversion tracking script is a piece of code placed on a page that triggers and tells whether a conversion has happened or not. A conversion can be of different sorts; it can be the successful completion of an online form, quote request, or an online purchase. The conversion tracking script triggers every time the page on which the code is written is visited. This code is responsible for passing the name of the referrer and his other information in case of a conversion. How does it do this? Well, it looks out for the existence of a cookie or a URL parameter.
This piece of code can be placed at any of the webpages you desire, most popular pages are:
- A thank you page that appears after a form is successfully submitted.
- A confirmation page that appears once something is successfully purchased online.
- A welcome page that appears after a user successfully signs-up.