Referral link: What? Why? How?

Danny Rodriguez

8 min read Last Updated Aug 31, 2023

Happy customer enjoying the benefits of a referral link.

You probably remember receiving an email from a friend saying, “Use my link for a discount!” And they shared a link with you from a shop or brand they want you to try. That link is what’s called a referral link. It’s a special URL created exclusively for that one person to share with their friends via email, social media, text, and other channels.

Referral marketing links are one of the most powerful ways to boost brand awareness and attract new customers. But to know what it is and how your business can use it requires a little more guidance. In this blog post, you’ll learn all about the what, the why, and the how of creating and sharing referral links to take your business to new heights.

referral marketing program guide

First, let’s go over what a referral link actually is. Businesses can create unique URLs to give to brand ambassadors, who are often already dedicated customers. These links typically offer a discount to whoever clicks on them. With this link, businesses can track where their new customers come from and gather insights.

Sharing these links is part of a bigger referral marketing strategy where a business gets its customers to talk to friends and family about their products or services. This is also known as word-of-mouth marketing. So many businesses create referral programs specifically to get their most loyal customers to spread the word about their brand. And they then reward them for it.

Benefits of a referral program

List of the benefits of a referral program for a business.

Considering that people are four times more likely to buy something when it’s referred by a friend, referral marketing can often be a lucrative marketing method for businesses. By setting up a referral program, you incentivize people to promote your brand by offering a reward in return. This sets up a mutually beneficial relationship.

There are four main benefits that you’ll see right away when you start sending out your links: brand awareness, higher conversion rates, increased sales, and return on investment (ROI) measurement.

Build brand awareness

Referral links work as advertising promoted by customers you know love your product. If one of your brand ambassadors posts your link on their social media, your brand, products, and services can enjoy increased reach and awareness to a broader audience.

And even if the brand ambassador’s followers don’t immediately purchase from that link, you’re still getting in front of people who may not be within your reach. The same applies when a brand ambassador shares your link via email or text. Their network may be new to your business, but now someone they follow and trust is vouching on your behalf.

Easy tracking of conversions

Because each brand ambassador receives a unique referral link, tracking conversions from specific sources is easy. Whether you do that through referral marketing software or simply by monitoring and updating a spreadsheet, you now have data on where your customers are coming from and how often your product is shared.

Increased sales

You’re not just getting brand recognition when you send out links. You should also expect to see an increase in leads and sales from customers who clicked on that special link.

It stands to reason that if a friend recommends a product, many people in their network will also likely make a purchase. And when the customer is rewarded for their referral, they are likely to share again and again. This increases the reach of your product exponentially.

Measure ROI

You can also measure your ROI in a similar way. Suppose you offer an incentive to a customer for sharing your link. In that case, you can calculate the advertising cost versus the revenue generated by the new customer you acquired. Now, you can figure out your ROI and whether or not more resources should be allocated to this strategy or not.

How do you create a referral link?

The easiest way to create a referral link is through referral marketing software. Often these programs come with a link generator, which saves you and your marketing teams the trouble of having to come up with a unique link every time. This will also help you monitor and measure the success of your referral program. Furthermore, if you are using a referral program with rewards for customers or influencers, these tools can manage that process as well.

List of ways people share referral links.

Below are some of the most common channels used for sharing these links. Be sure to share these strategies with your brand ambassadors to help them drive more referral sales.

Social media

Social media example of a referral link.

Social media is where referral links will most likely reach the most potential customers. If someone posts the link on TikTok or Instagram, encouraging people to click on it, they’ll reach a much larger audience than they could reach with word of mouth.

By encouraging your brand ambassadors to share your link on social media, you will raise brand awareness sooner rather than later. It’s a great way to get started in making your brand recognizable to people outside of your established audience.

Birdeye Social is a powerful tool that can help you publish in bulk, monitor your brand mentions, and report – all from a single, easy-to-use dashboard.

Email

Email example of a referral link.
Source: Daily Carnage

Sharing referral links via email is also an excellent way to gain higher visibility. While it may not have the reach that social media does, emails are typically sent between people who know each other very well, including friends, family, and colleagues. If someone you know takes the time to send a link via email, you’re more likely to trust the recipient and the link itself.

Text

Texting links, much like email, is a more trusted channel. And because so many consumers and colleagues rely on text as a primary method of communication, it’s a great venue for referral links. Text links make it easy for people to click and browse using their mobile devices, which is a familiar way to consume content and explore deals.

Struggling to manage your business communication? With Birdeye Messaging, you can reach all your customers across text, social, and webchat – all from a single inbox.

Websites

Website example of a referral link.
Source: Rover.com

If your brand ambassadors have a well-trafficked website, then placing a referral link there can be a great way to increase your exposure and reward them for their efforts. Once a link is added to a website, it can remain there for an extended period of time, which increases the chances of someone coming across the link and using it to make a purchase or sign up for a service.

Blogs, forums, and discussion boards

Consider exploring Reddit discussions, industry forums, or blogs as additional channels for sharing your referral links. Be mindful of any community rules that apply before sharing. These communities can be a great method for reaching new prospects.

How do you get a referral link?

To get a referral link, try signing up for a brand’s newsletters, regularly leaving reviews, and engaging with your favorite brands on social media. These simple tasks can often result in a brand offering you a unique referral link.

Can I make money from referral links?

Some brands offer small payouts for promoting their links. More often, you’ll receive discounts or other special offers once you share the link. Some withhold rewards until the link has been used.

Which sites pay for referrals?

There are a few different sites that will pay you for your referrals, including big names like Amazon and Verizon. However, you’ll need to look at the terms and conditions of each individual offer to get a full list of services that will pay for referrals.

Are referral links and referral codes the same?

A referral link is a hyperlink that contains a unique identifier and is automatically linked to a specific brand ambassador. A referral code is a unique combination of numbers and/or letters that a customer must manually type in at checkout in order for the brand ambassador to earn a reward or benefit.

As we’ve seen, referral links can lead to a big payoff in your advertising for very little investment. It’s an excellent way to reward your most loyal customers and a reliable, measurable way to bring in new ones. If you think your business can benefit from a referral program, then it’s certainly worth adding to your marketing strategies.

Watch demo

Originally published