What Is a Referral Link? How Do Referral Links Work? [+ How to Create Them]

Referral links are the fuel of your rewards program. They allow businesses to track exactly which customers have sent referrals to your site, and which of those referrals end up as new sales.

When a customer joins a referral program, they are assigned their own unique referral link. This link is used to keep track of every referral that comes from a single customer.

A referral link also tracks each step of your referral campaign in real time, from customer sign-ups to new referrals to converted leads, and more. By showing a clear picture of your entire referral process, a referral link can help you improve and maximize your referral marketing efforts.

What is a referral link?

Referral links are links distributed via a referral program. Every customer who participates in the referral program receives a unique referral link with a unique tracking code, which traces that person’s referrals back to them.

Referred friends can use the referral link to visit your website, and hopefully purchase or sign up for your products or services. If a referred friend becomes a new customer (or meets any other program requirement), the link indicates a successful conversion, and a reward is issued to the referring customer.

The role of referral links within a referral program

On the surface, a referral link looks like any other URL link. But instead of just leading to a specific landing page or home page, it also contains a unique identification code that tracks who the referral came from, as well as the referred lead’s movement across the site.

When customers join a referral program, they are immediately assigned a personal referral link or invite link – their own unique URL, usually generated by referral program software. They can then share the referral link with their friends, family, or anyone else they know who might benefit from the brand’s products or services. The link will keep track of referrals, and activate rewards when those referrals are successful.

As you can see, referral links make the entire referral process easier. Referral links enable businesses to keep track of the referrals each person makes, know exactly where all their referrals are coming from, and ensure customers are rewarded for all their successful referrals.

Source

Is a referral link the same as a referral code?

Not quite. A referral code is part of a referral link. More specifically, the referral code is the unique identifier within each referral link.

A referral link contains the URL of the page a referral will be brought to (this can also be a shortened URL), plus a unique referral code that holds all the identifying information of the referring customer.

How does a referral link work?

Using a referral link is simple. All the customer has to do is save their referral link and send it to a friend, family member, or anyone they want to refer. In fact, most people don’t even realize the number of steps that actually go into the referral process.

Here’s how it works:

Step 1: Assign customers a referral link

Give customers their referral link as soon as they join a company’s referral program. In each link, there is a unique identifier that helps track any referrals or sales that come from that specific link.

Referral program software uses automation to assign links immediately and get your customers ready to refer a friend, right after they sign up.

Step 2: Encourage customers to share their link

Once your customer has their referral link, they can already start sharing with others. The most common ways to send a referral link are through email, text message, or social media platforms (e.g., LinkedIn, Instagram). Sharing within private social media groups and chats, like Whatsapp or Facebook groups, is also becoming more popular these days.

If you’re using referral software, the sharing process is even easier. All a customer has to do is select their preferred sharing option, and the referral link will be automatically added for them.

How to encourage referral link sharing? You’ll need to plan out how you’ll promote your referral program, and offer motivating referral rewards for sharing, so your customers will start using their links.

Step 3: Get referred leads to click the referral link

This final step is the biggest in the entire referral process: getting the referred individual to click the referral link. Ideally, the individual is already looking for or at least interested in the product or service. An attractive referral reward – like $25 cash back, or a coupon for 20% off their first purchase – could also entice them to click on the referral link.

Sometimes, the link is even disguised or embedded into an image. For example, if someone shares a referral link from their Facebook profile, the message might not show the actually link. Instead, the referral sees an associated image that directs them to the referral landing page.

Below is a referral link sent out for Groupon using Facebook Messenger. Whenever someone clicks on the message, they’re actually clicking on a referral link without even knowing it. If the person ends up making a purchase, the referral link ties that purchase back to the referring customer, applies any coupon you’ve offered during the checkout process, and credits them for their friend’s purchase.

Referral link FAQ

Still have questions about referral links? Or, still on the fence about whether you should use them? Our FAQ will help you out.

Do you have to use a referral link in your program?

Yes – if you want to make things easy for you and your customers, you’ll need to use referral links. A referral link is what customers share with their friends, and is directly connected to their referrals. Without this link, there’s no way to track all the activity in your referral program – unless you plan on doing all the legwork yourself.

Of course, you can run a referral program without any link at all. But you won’t know which customers are sending referrals, which new customers were referred, and which customer was responsible for sending the referral.

You also won’t be able to automatically see which customers have earned rewards, or send them their referral bonus when one of their referrals becomes a new customer.

Without a referral link to track data, you lose out on a lot of benefits of having a referral marketing strategy.

How do you create a referral link?

The easiest way to create referral links for your customers is with referral software, which usually comes with a referral link generator. Automating these steps from the get-go saves you considerable time and effort.

Imagine having to track links for every single customer… and then making sure every link that brings in a referral is immediately rewarded. That would be a headache.

To help you track referrals, we’ve also created a referral tracking spreadsheet that can be easily customized for any referral program.

What’s the difference between a referral link and an affiliate link?

An affiliate link is used by content creators in a different type of marketing campaign – an affiliate program. Creators will place an affiliate link on their own channels, which directs their audience to a brand website. Affiliates earn cash commissions whenever someone purchases products using the affiliate link.

Both referral links and affiliate links track purchases that result from word of mouth, and both are unique. But customers use referral links to share a brand with people they know. In contrast, most of the people who click on a creator’s affiliate link aren’t people the affiliate knows personally.

Referral link wrap up

Referral links are a small but essential part of any referral program. Without a link, your customer or partner won’t be able to quickly refer others to your business. In turn, your business will have a hard time rewarding these loyal customers and might even lose out on building strong relationships within the market.

Make the entire process easier by integrating referral links and automatically tracking every new lead and sale your business gets through its referral program.