Once you've decided to launch your first referral campaign, the next step that you need to do is to track your referrals.
By creating a referral tracking system early on, you ensure that you can get the results that you want.
In this post, we will be defining referral tracking, what makes it essential to referral program success, and how you can do it.
What is referral tracking?
Referral tracking monitors and gathers data throughout your referral program.
It allows you to track everything in your ecommerce site or web platform, from the moment a person signs up to your program to driving referral sales.
Luckily, there are several ways you can track referrals. You can choose to do it manually or use an automated referral program.
Why You Should Track Your Referrals
When it comes to referral marketing, the more referrals you have, the better.
You want to reach out to as many loyal customers as possible, who will then promote your brand to their friends and families. These referrals can add up quickly!
That's why you need to know the specific customers who are sending referral signups to your business. Not only does this let you know who to reward and how to reward them, but having a solid referral tracking system helps boost word-of-mouth marketing.
Other than that, we’ll cover 6 more reasons you should track your referrals:
Spot Referral Fraud
Even the best referral programs out there can still experience referral fraud.
Some people might duplicate referrals (referring to the same people) or refer to themselves using fake accounts just to get referral rewards.
If you fail to track your referrals, you won't know what will happen to your program.
Before scaling your referral program, make sure that you have a foolproof way to analyze information so that you can easily detect any suspicious referral activities. This can easily be accomplished with referral software and is a default of any GrowSurf campaign.
Monitor Sharing Rates
A referral sharing rate is the percentage of customers in your program sharing your brand with other people. Let's say 30 out of 80 customers in your referral program have shared your brand or business with others.
To get your referral sharing rate, you can follow this formula:
Referral Program Sharing Rate = Number of referring customers / Total number of customers in your referral program x 100
To boost this rate, you should also be aware of the specific channels that your customers prefer. Do they refer other people via email, social media, links, or any other online platform?
By narrowing it down, you can offer your customers a library of content sharing ideas that are made for these channels. This will, in turn, draw more people to your business.
Monitor User Participation
If you only have few affiliates, you may not see a big jump in the number of referrals.
A referral tracking system allows you to monitor if there are any dips in the customer participation rate.
Let's say that customer participation is low. Then, you might consider going over the details of your program.
Or let's say you're promoting your referral program in your monthly newsletter. If user participation is low, you might consider delving into other channels.
Measure Customer Satisfaction
Your referral program will also let you identify key analytics to see whether or not your customers are satisfied.
You'd experience an excellent referral flow if customers are satisfied with your brand as a whole. You can use Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS) as an indicator here.
Satisfied customers are more likely to refer your products and services to their friends and loved ones.
Optimize Conversion Rate
By tracking your referrals, you can monitor which referrals have resulted in a new customer. You can also track how long that specific referral takes to interact with your business. This includes signing up for a demo or clicking on a referral link.
Based on the information you've gathered, you'll know which referral strategy is meeting your goals. You can also identify if you need to tweak your system to boost referrals and customer engagement.
Put Your Referral Data to Use
Tracking your customer referrals helps you boost sales and enhance your business intelligence. By analyzing your referral data, you can have an insight into what products drive the most referrals and why.
How to Track Referrals
There are four common ways you can track your referrals:
Google Analytics is an excellent platform that allows you to monitor how your website is performing. This includes monitoring where your traffic and sales are coming from.
It's easy to set up, and you'll quickly know the specific actions taken on your site, as well as know which marketing channels work best. Oh, and did we mention that it's free?
UTM parameters are usually part of a URL utilized to identify a particular referral campaign that brings in traffic to your site.
To build a unique URL for every customer who refers, you need to use Google Analytics along with Campaign URL Builder. This includes parameters that you can use to track the source of the referral.
Your customer can then share this customized URL with his family, friends, and colleagues.
Alternatively, when using referral software like GrowSurf, share URLs are automatically generated for each participant in your referral program. No need for manual UTM code generation!
Referral or Coupon Codes
Referral codes are usually unique identifiers that will attribute a referral to a particular referrer.
Once the referred friend enters that code, the data is recorded and sent back to you, making it easier to track things.
One of the easiest ways to track referral data is by using referral tracking software. All you need is to enter a few details, and you can easily set up the platform.
You can use this to build a system, track referrals, and then automatically issue rewards.
To have an effective referral program, you need to have two things: A well-defined goal and tracking parameters.
That way, you can identify why you need a referral program and how you can monitor them.
Hopefully, this article made you realize the importance of referrals and how you can keep your referral program on track. Good luck!