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Why Every Shopify Store Needs A Referral Program


I recently appeared on an episode of the eCommerce Fastlane podcast hosted by Steve Hutt. Steve is a major player in the Shopify ecosystem. He’s interviewed all of the top names from companies like Klaviyo, ReCharge, Postscript and more.

Steve and I talked about why referral programs are essential for Shopify stores, and how Friendbuy has built technology specifically for Shopify merchants to accelerate customer acquisition while lowering acquisition costs. Below is a recap of our conversation. I’m sure you’ll find it valuable, and I hope you check out the full interview at eCommerce Fastlane.

1. Why Shopify brands need a referral program

Once you’re generating online sales, if you don’t have a referral program then you’re leaving revenue and growth on the table.

If you can get people to buy from you, then you can get people to tell their friends to buy from you.

At Friendbuy, we power referral programs that generate between 5% to 20% of total orders (and even higher for many clients). Every customer you acquire through word-of-mouth referral is one less you have to acquire through a paid channel, which makes referral programs incredibly cost-efficient. Referral customers typically convert 5 times faster and have a 2-to-3 times higher customer lifetime value.

As an e-commerce operator, you probably already know that you’re getting your best customers through word of mouth. What you may not know is how to get more of it and then how to scale it.
Our goal at Friendbuy is to make it super simple for every Shopify merchant to deploy superior technology and the best practices needed to scale a referral program and grow faster.

2. What Friendbuy offers specifically for Shopify

Steve was very interested in how Friendbuy is building technology specifically for Shopify merchants. So we spent a good bit of time discussing features and integrations on this topic.

For example, Friendbuy’s one-click integration makes it really easy to get set up on Shopify. And the integration powers automated coupon code generation which eliminates the need to generate one-off coupons in bulk and manage code banks.

For Shopify Plus, we’ve recently launched stackable account credit (i.e. store credit) so that your high-volume advocates can accumulate referral rewards as store credit instead of being limited to non-stackable coupon codes. This has been a hugely successful feature that merchants love and during the interview we discuss the impact for our client Thinx (more below).



Furthering our commitment to Shopify, Friendbuy integrates with platforms like Klaviyo, Attentive, Okendo, Delighted, ReCharge, and more to come this year. These integrations allow merchants to grow their email & phone number subscriber lists and to display referral links at important touchpoints in the customer lifecycle to boost referral performance.

3. How Friendbuy is different from other providers in this space

The Shopify marketplace has many apps offering some kind of referral product, but very few of them are specialized for referral programs. The majority have added referral to a different core product (such as loyalty). As a result, they may offer a simple way to generate referral links for your customers, but they don’t give you the technologies you need to truly scale a referral program.

Before we dive into what makes Friendbuy different, try this simple thought exercise:

  • What good is a referral program if you constantly suspect that the referrals are fraudulent (e.g. people are referring themselves or cancelling the referral purchases to get the advocate reward)?
  • How would you accelerate growth through referrals if you can’t figure out whether your customers prefer sharing with a referral link or through or email or SMS? (hint: you can’t)
  • How long will you or your customer experience team tolerate inquiries about referral program confusion or lost rewards before you get tired and shut the program down.

Friendbuy specializes in powering referral programs for high-growth merchants. We know what’s required to launch a program that truly scales. This includes:

  • Sophisticated fraud controls & business rules with automation for dealing with returns & cancellations
  • Multi-device attribution (increasingly important as customers shop using many devices)
  • Detailed tracking of every share channel: personal referral links, emails, SMS and social
  • Complete control over your program from offer management to creative control
  • A user experience seamlessly integrates into your website and mobile app (i.e. we don’t send your customers to a 3rd party portal or microsite)
  • A/B testing that no other referral provider can compete with
  • The ability to run unlimited referral campaigns (e.g. a campaign for top advocates or a limited time referral contest)ab_testing

4. What it means to scale your referral program on Shopify

You’ll know your referral program is scaling when referrals are a significant portion of your total customer acquisition and you’re not doing things manually.

To scale your referral program means you’ve got automation and the integrations necessary to make referrals a seamless part of your brand experience. Only then can word of mouth referrals represent a true growth engine for your business

When you’re just starting out, maybe you’re ok with manually approving referral purchases to check for fraud or returns & cancellations. But when you’re scaling, you need automation. You want a system that validates referrals automatically, that integrates into your tech stack to grow your email and phone numbers subscriber lists, and that integrates with product reviews & Net Promoter Score surveys so you can prompt customers to refer after they give you positive reviews.

In addition to these capabilities, Friendbuy has developed various triggered emails that boost referrals from advocates and boost conversion rates of referred friends. We also provide customer friendly features like the advocate referral dashboard so your customers can track their own referral history and rewards instead of bombarding your team with customer service inquiries.

Our experience working with startups as well as global e-commerce enterprises means you can launch with Friendbuy at any point in your company's journey and rest assured that your referral program will scale as your business scales.

5. FIGS: a Shopify merchant doing referral really well

If you love being inspired by amazing brands on Shopify, be sure to check out FIGS, an apparel brand serving healthcare professionals. FIGS makes it very easy to refer friends throughout the customer journey, with a strong primary call-to-action and other strategic placements.

They even incorporate referrals into their Net Promoter Score surveys and product reviews. For any customer who gives them an NPS score of 9 or 10, FIGS automatically shows the customer their referral link on the survey thank you page. This functionality is made possible through Friendbuy’s integration with Delighted (an NPS survey platform). Similarly, after a positive product review, Friendbuy’s integration with Klaviyo triggers an email from Klaviyo with a thank you note to the customer that also contains the customer’s referral link. These techniques place the referral program in front of the best customers who FIGS wants to spread the word about their amazing products.

For FIGS, integrations plus automation come together to drive up referral program performance.

FIGS achieves very strong referral metrics with higher average order values (AOV), exceptionally higher customer lifetime values (LTV) and much lower cost per acquisition (CPA) compared to other acquisition channels. Check out the interview to hear more about what FIGS is doing with A/B testing and converting customers at the top of their funnel using the referral program as an enticement.


6. Thinx: another Shopify merchant doing referral really well

Steve and I also talked about Thinx, another e-commerce company on Shopify that is direct-to-consumer and super high-growth. Thinx is using Friendbuy’s new account credit feature for Shopify Plus, which has allowed them to switch from single-use coupon codes to stackable store credit as their advocate reward. Thinx has always been very successful with referral, but coupon codes in Shopify are non-stackable, so advocates who referred a lot could become frustrated by having to use coupons on separate orders. With Friendbuy’s account credit feature, these high-performing advocates can stack their earnings to spend on larger orders. This feature has been so popular with Thinx’s customers that it helped Thinx to double their referral program performance.

During the interview we also covered how Thinx uses Friendbuy to run limited-time referral contests to boost referral engagement. Listen to the interview to learn what contest they ran that significantly raised referral performance even after the contest was over.


Thinx-referral 1-1-1

7. The future of referral programs on Shopify

Steve was curious about where referral marketing is going and how this will impact Shopify merchants. I explained that from our experience, we see optimization playing a huge role in how referral programs are evolving. As I mentioned above, no other referral solution can compete with Friendbuy’s A/B testing capabilities, and A/B testing has been huge for our clients to optimize every part of the referral funnel and maximize performance.

We’re also seeing audience segmentation emerge as a technique to further personalize referral offers and boost engagement. So for example, maybe a VIP customer should get a better offer for referring friends because their friends are more likely to become VIPs.


In addition, we see referrals expanding from brand-level programs to campaigns designed to promote different business objectives.  For example, our clients are already using referrals to drive awareness for a new product launch or to get people to download their mobile app. Friendbuy is leading this evolution by developing workflows and integrations to make these techniques standard in the marketer’s playbook.

8. Takeaways

Steve and I concluded the interview at the same place we started it…

If you can get people to buy from you, then you can get people to tell their friends to buy from you.

Word of mouth referrals can and should really be your best channel for customer acquisition. But to really succeed at referral marketing, you need great technology that integrates with your tech stack and automates the best practices that are proven to work. If you do that, referrals can be a big driver of customer acquisition for you.

Friendbuy is committed to making this a reality for Shopify merchants. Check out our best practices and our integrations in the Shopify ecosystem to grow your business through word of mouth referrals.

This originally appeared on Friendbuy and is made available here to cast a wider net of discovery.
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