What is a Referral Code?

As the name implies, a referral code is a code, usually a combination of different letters and alphabets used as a tracker. Referral code plays a significant role in a referral program. A referral program is a very efficient way of online marketing in which different people refer your business to their friends and families. As a result, the business receives more visitors, and to keep track of who referred to those visitors, you can make use of a referral code.  

Referral marketing is quite beneficial for a business, but to run a successful referral program, you need to give gifts and rewards to the people who refer to your business. And this is why referral codes are essential. Every individual who refers to a business has a unique code. Through these referral codes, the progress of different individuals is tracked, which helps you to distribute the rewards to the right people.

1. What is the difference between a referral link and a referral code? 

If you are an online marketer, you would know that customers prefer less pre-purchase actions. And to keep things simple for them, most of the online businesses choose to use referral links instead of a referral code. 

A referral link is a kind of hypertext link which has been assigned its referral code. With a referral link, nobody has to type in the code manually; the referrer sends a link to the potential customer, the customer clicks the link and will be directed to your business website or app. Thus, a referral link makes things simple for everyone. 

Now, you might be thinking, if a referral link is so convenient, why would any business use referral codes? Well, the answer to this question is simple, imagine you are sitting next to your friend, and you want to make a referral. What would you prefer, dictating him a referral code or a link? You will choose the code as it is easier to remember a code than a complete hypertext link. Plus, referral codes can be used by both online businesses and regular businesses. 

2. How To Use a Referral Code 

Now that you know what a referral code is let’s get familiar with its working.  

2.1 Customer Is Assigned a Code 

First of all, a code is assigned to the person who will refer to your business in the future. Some companies assign the same code to every referrer, but the companies who want to reward the individuals need to keep track of referrals. This is why they assign a unique code to every individual. And if you’re going to give rewards on each referral, then you should also provide a unique code to your referrers. 

2.2 Get your Referral Codes Shared 

The second step is to urge your customers or partners to share their referral codes to potential customers. But you have to decide how you want them to share it. Nowadays, with access to the internet, communicating and sharing has become very easy. Your customers can share their codes via email, social media posts, etc. 

However, in case you want the influencers to make referrals, you would want to give them a code that has their name in it. This will help them to share their codes with their followers, and the followers will have a clear idea that they are going to use a product or service referred by their favorite influencer. 

2.3 Collect the Codes Back and Link Them 

Now once you have distributed the codes; you must be prepared to receive those codes back and link them to the right individual that shared them. If you have an online business, you can rely on links and cookies to track these codes. You can also create your page, which will only be used for tracking of these codes. However, these are tons of referral marketing services available online. You can buy one and integrate it with your online business. It will make the process of a referral smooth, manageable, and flawless. 

3. Is Referral Code Necessary to Run A Referral Program? 

A referral code is not necessary to run a referral program. However, it is necessary to run a successful referral program. Let’s say you have an online eCommerce store; will you be able to remember the names of every customer you have? No, it is not possible. 

A referral code will help you to keep track of your referrers, plus, it gives a very good impression to the customers as well. When the customers will get a referral code, they will know what to do next. And you can also give discounts and other rewards to the customers based on the referral codes in a quite manageable way. 

4. How to Create Referral Code 

Referral codes are generated by the businesses and then distributed among masses. So, if you are a business owner, it is totally up to you to choose how you can create the referral codes. As we have already mentioned, you can find many referral marketing softwares available online, and these softwares will take the burden of creating referral codes away from you.  

However, if you want to create the referral codes all by yourself, then you must be able to manage all these codes as well. For this, you can use a google spreadsheet or any accounting software you like. Following are some practices that you can follow to create referral codes for your business 

  • Make the code short, unique, and easy to remember. 
  • Avoid using O’s and zeros and I’s and lower-case L’s 
  • Make it case insensitive. 
  • To give your customers a sense of personalization, allow them to create their own customized and personalized referral codes. 

5. Wrap Up 

If you want to run a successful online business, then you have to have a referral program, and for a successful referral program, it is necessary to give out referral codes. Referral codes let you account for the progress of your referral program. Referral codes will ensure that you reward every deserving referrer without any mistake.

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