How to Set Up a Referral Program on Shopify? (With Excel Checklist)

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Looking to harness the power of word-of-mouth marketing for your Shopify store? Setting up a referral program is one of the most effective ways to turn your satisfied customers into brand advocates who bring in new buyers. In fact, referred customers have a 37% higher retention rate and generate 25% more profit than non-referred customers, according to Wharton School research.

Learning how to set up a referral program on Shopify might seem complex, but with the right approach and tools, you can launch a successful program that drives sustainable growth. This comprehensive guide will walk you through everything you need to know, complete with an Excel checklist to keep your implementation on track.

Whether you’re a new Shopify store owner or looking to optimize your existing marketing efforts, this guide provides the blueprint for creating a referral program that converts browsers into buyers and customers into advocates.

Table of Contents

What Is a Shopify Referral Program and Why Should You Use One?

A Shopify referral program is a structured marketing strategy that incentivizes your existing customers to recommend your products to their friends, family, and social networks in exchange for rewards. It’s a systematic approach to word-of-mouth marketing that leverages customer satisfaction to drive new acquisitions.

The concept is simple yet powerful: happy customers share your brand with people they trust, creating a cycle of organic growth that’s both cost-effective and highly converting.

How Referral Programs Work on Shopify?

The referral process on Shopify follows a straightforward workflow:

Customer enrollment: Existing customers sign up for your referral program through your store or a dedicated app
Unique link/code generation: Each participant receives a personalized referral code or trackable link
Sharing: Customers share their referral links via email, social media, or direct messaging
Tracking: The referral app monitors clicks, conversions, and purchases from shared links
Reward distribution: Both referrer and referee receive predetermined rewards when conditions are met
Analytics: Store owners track program performance through dashboards and reports

Benefits of Referral Marketing Over Traditional Marketing

Referral programs consistently outperform traditional marketing channels across key metrics:

Metric	Referral Programs	Traditional Advertising
Conversion Rate	3–5x higher	Baseline
Customer Acquisition Cost	50–75% lower	Higher upfront costs
Customer Lifetime Value	25% higher	Standard LTV
Trust Factor	92% trust recommendations	47% trust ads

Key Advantages:

Higher conversion rates: Referred customers convert 2–3x more than other channels
Lower acquisition costs: Word-of-mouth costs significantly less than paid advertising
Increased customer loyalty: Both referrers and referees show higher retention rates
Enhanced brand credibility: Personal recommendations carry more weight than traditional ads
Scalable growth: Programs compound as your customer base expands

Prerequisites Before You Start

Before diving into how to set up a referral program, ensure your Shopify store meets these essential requirements for program success:

Foundation requirements:

Established customer base with positive feedback
Stable product-market fit with satisfied buyers
Clear brand positioning and value proposition
Basic email marketing infrastructure in place
Customer service processes that handle inquiries efficiently

Identify Your Ideal Referral Customer

Your most successful referrers share specific characteristics that you can identify through data analysis:

High-value referrer profiles typically include:

Net Promoter Score (NPS) of 9-10: These customers actively promote your brand
Multiple purchases: Repeat buyers demonstrate product satisfaction and brand loyalty
High Customer Lifetime Value (CLV): Customers who spend more tend to refer higher-value prospects
Active social media presence: Users who regularly share content are natural advocates
Recent positive reviews: Customers who’ve left 4-5 star reviews show satisfaction

How to find these customers using Shopify Analytics:

Navigate to Analytics > Reports > Customer reports
Filter for repeat customers with orders 30+ days apart
Identify top 20% of customers by total spending
Cross-reference with customer service interactions (positive feedback)
Review email engagement rates from marketing campaigns

Analyze Existing Referral and Traffic Sources

Understanding your current referral patterns helps optimize your formal program:

Using Shopify Analytics

Go to Analytics > Reports > Acquisition reports
Review “Traffic by social referrer” to identify organic sharing
Check “Referral traffic” for external sites driving visitors
Analyze “Customer acquisition” reports for growth patterns

Using Google Analytics

Set up “Acquisition > All Traffic > Referrals” tracking
Monitor social media traffic sources
Track direct traffic spikes (often indicating word-of-mouth)

Customer surveys provide additional insights

Add “How did you hear about us?” to post-purchase emails
Include referral questions in customer satisfaction surveys
Use exit-intent popups to gather acquisition data

Planning Your Referral Program (with Excel Checklist)

Strategic planning ensures your referral program aligns with business objectives and customer expectations. Use this comprehensive checklist to organize your implementation process. You can copy the table below directly into Excel or Google Sheets to track your progress:

1. Set Goals and KPIs

Successful referral programs require clear, measurable objectives. Define SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound) that align with your overall business strategy.

Common referral program goals:

Customer acquisition: Increase new customers by 25% in Q1
Revenue growth: Generate $50,000 in referred revenue within 6 months
Cost efficiency: Reduce customer acquisition cost by 40%
Brand awareness: Expand reach to 10,000 new potential customers
Customer loyalty: Increase repeat purchase rate among participants by 15%

Essential KPIs to track:

Referral rate (% of customers who make referrals)
Conversion rate of referred traffic
Average order value of referred customers
Customer acquisition cost through referrals
Program ROI and payback period

Here’s a polished, reformatted version of your Program Structure Decisions section that keeps the content intact but adds flow and readability:

2. Program Structure Decisions

Designing the right structure is critical to balancing costs with customer motivation. You’ll need to decide whether a one-sided or two-sided reward system fits your goals best:

Structure Type	Best For	Pros	Cons
One-sided	High-margin products	Lower costs, simpler tracking	May reduce sharing motivation
Two-sided	Customer acquisition focus	Higher participation, faster growth	Higher costs, more complex tracking

Reward Options to Consider:

Percentage discounts: 10–20% off the next purchase
Fixed dollar amounts: $10–25 store credits
Free shipping: Especially effective for lower AOV stores
Tiered rewards: Unlock bigger rewards for multiple referrals
Product gifts: Free items for high-value referrals

3. Map Your Customer Communication Channels

Identify all touchpoints where you can promote your referral program:

Primary channels:

Post-purchase email sequences
Order confirmation pages
Customer account dashboards
Website footer and navigation

Secondary channels:

Social media profiles and posts
Newsletter mentions
Customer service interactions
Package inserts and thank-you notes

4. Choose Your Rewards

Research indicates optimal reward values vary by industry and average order value:

General guidelines:

Reward value should be 10-25% of average order value
Two-sided programs typically offer equal rewards to both parties
Consider your profit margins when setting reward amounts
Test different reward types to find what motivates your customers

Excel Referral Program Planning Checklist

Copy this table into Excel or Google Sheets to stay organized while setting up and running your referral program system:

Step	Owner	Notes
Define ideal referrer persona	Marketing	Use NPS, LTV data, and prior referral patterns
Set clear program goals/KPIs	Marketing	Track revenue, CAC, conversion rate
Decide on reward mechanics	Marketing	Choose one/two-sided, set value, add tiers
Draft referral program FAQ	Marketing	Cover eligibility, payout process, T&Cs
Prepare customer comms channels	Marketing	Email flows, on-site messages, post-purchase prompts
Outline fraud prevention steps	Tech	Block self-referrals, bots, duplicate accounts
Set tracking/analytics plan	Tech	UTM codes, dashboard setup, Excel/Sheet logs
Assign program ownership	Ops	Define who manages and tracks referrals
Prepare compliance/disclaimers	Legal	GDPR requirements, local laws, T&Cs
Install Shopify referral app	Tech	Examples: Bloop, Yotpo, ReferralCandy
Test referral funnel end-to-end	QA	Walk through both referrer and referee journeys
Schedule launch and first promo	Marketing	Plan email/send timing, site pop-ups
Ongoing review and iteration	Marketing	Weekly/monthly analytics check-ins

Instructions: Copy this table into Excel and customize the “Notes” column for your specific needs. Update the “Complete” column as you finish each step.

Step-by-Step: How to create a referral program for Shopify stores

Now that you’ve planned your program, let’s walk through the technical implementation process for how to set up a referral program on Shopify.

1. Install and Configure a Shopify Referral App

Shopify’s App Store offers several high-quality referral solutions. Here are the top options:

Leading Shopify referral apps:

Bloop: The easiest and most affordable referral and affiliate platform with advanced referral widgets
ReferralCandy: User-friendly interface with strong analytics
Friendbuy: Advanced fraud prevention and customization options

Installation process:

Sign up for Shopify with the Shopify $1 trial deal
Visit your Shopify Admin > Apps section
Browse the App Store or search “referral program”
Read reviews and compare features
Click “Add app” for your chosen solution
Follow the installation prompts and grant necessary permissions
Complete initial setup wizard

Pro tip: Most apps offer free trials. Test 2-3 options to find the best fit for your needs and budget.

2. Customize Branding and Rewards

Ensure your referral program feels like a natural extension of your brand:

Branding elements to customize:

Upload your logo and brand colors
Write compelling call-to-action copy
Design email templates for referral invitations
Create landing pages that match your store’s aesthetic
Set up social sharing messages with your brand voice

Reward configuration:

Input your chosen reward values and types
Set minimum order requirements if applicable
Configure reward expiration dates
Test reward delivery mechanisms
Create terms and conditions for program participation

3. Define and Set Program Rules

Establish clear guidelines to prevent fraud and ensure smooth operations:

Eligibility requirements:

Minimum purchase amount for referrers
Geographic restrictions if applicable
Customer account age requirements
Product category inclusions/exclusions

Fraud prevention measures:

IP address tracking to prevent self-referrals
Email verification for new customers
Manual review for high-value rewards
Limits on referrals per customer per time period

Integration setup:

Connect with your email marketing platform (Klaviyo, Mailchimp)
Set up webhook notifications for new referrals
Configure customer service tools for support inquiries

4. Launch and Promote Your Program

Multi-channel promotion maximizes program awareness and participation:

Launch sequence:

Send announcement email to existing customers
Add program promotion to your website header
Create dedicated landing page with program details
Update social media bios and create announcement posts

Ongoing promotion strategies:

Include referral CTAs in order confirmation emails
Add program widgets to customer account pages
Mention referrals in customer service interactions
Create social proof content featuring successful referrers

Example email copy:

“Love [Brand Name]? Share the love and earn rewards! For every friend who makes a purchase using your unique link, you’ll both receive [reward amount]. It’s our way of saying thanks for spreading the word about products you already enjoy.”

5. Track Performance and Iterate

Regular monitoring and optimization ensure long-term program success:

Key metrics to monitor:

Referral participation rate: % of customers who make referrals
Conversion rate: % of referred visitors who purchase
Average order value: Spending patterns of referred customers
Program ROI: Revenue generated vs. rewards paid out
Customer satisfaction: Feedback on program experience

Optimization opportunities:

A/B test different reward amounts
Experiment with reward types (discounts vs. store credit)
Optimize referral email templates for higher open rates
Adjust program messaging and positioning
Streamline the referral sharing process

Advanced Tactics to Maximize Referral Performance

Once your basic referral program is running, implement these advanced strategies to boost participation and results.

Automate Referral Nudges and Follow-Up

Strategic automation increases program engagement without manual effort:

Post-purchase automation:

Send referral invitations 7-14 days after delivery
Include referral links in review request emails
Add program reminders to reorder campaigns
Segment high-satisfaction customers for targeted outreach

Follow-up sequences:

Remind customers about unused referral rewards
Celebrate referral milestones with bonus rewards
Re-engage dormant participants with special offers
Thank successful referrers with exclusive content

Use Milestone, Gamified, and Leaderboard Campaigns

Adding a sense of competition and achievement can make referral programs more engaging and fun for customers.

Campaign Type	How It Works	Best For
Milestone	Rewards grow as customers hit referral milestones (e.g., 1, 3, 5 referrals)	Motivating multiple referrals
Leaderboard	Ranks top referrers publicly to spark competition	Driving high-volume referrals
Gamified	Uses points, badges, or levels for achievements	Appealing to younger or tech-savvy audiences

Implementation tips:

Announce new campaigns through email and social channels to maximize visibility
Share real-time progress updates to keep participants motivated
Offer exclusive prizes or bonuses for top performers
Run seasonal challenges tied to holidays, sales events, or product launches

Encourage Social and UGC Shares

Amplify your program through social media and user-generated content:

Social integration strategies:

Offer bonus rewards for social media shares
Create Instagram-worthy unboxing experiences with referral cards
Encourage video testimonials with additional incentives
Enable easy sharing to multiple social platforms

UGC amplification:

Reward customers who tag friends in social posts
Create hashtag campaigns that include referral messaging
Feature customer photos and stories on your social accounts
Partner with micro-influencers who are existing customers

Build a Referral FAQ and Troubleshooting Resource

Address common questions to reduce friction and support inquiries:

Essential FAQ topics:

How referral tracking works
When rewards are delivered
Troubleshooting missing rewards
Program terms and conditions
Contact information for support

Automated support templates:

“Your referral reward is processing” messages
“Friend hasn’t received their discount” explanations
“How to share your referral link” tutorials
“Reward expiration reminder” notifications

Bloop also has an extremely detailed article on how to effectively promote a referral program for Shopify store, refer to it now for more ideas for your referral campaign!

Shopify Referral Program Case Studies

Rothy’s

At Rothy’s, every successful referral earns $20 for both the referrer and the friend (with a $50 minimum purchase). This accessible incentive encourages broad participation and has played a key role in revenue growth. Referrals are said to contribute up to 18%. What makes it even more powerful is Rothy’s cult-like following; for many fans, sharing their favorite shoes isn’t just about saving money, it’s about being part of something bigger.

MeUndies

MeUndies cleverly paired its referral program with a membership model, offering $20 in store credit to referrers and 20% off the first order for referees. By nurturing a strong sense of community, the brand makes sharing feel like a natural extension of being part of MeUndies. With referral software simplifying the process, they’ve shown how community power can be the real engine behind brand growth.

LIVELY

LIVELY weaves referrals right into its rewards program, where customers earn one point for every dollar spent. On top of that, both referrers and their friends get 15% off when a referral turns into a purchase. The results were immediate: within just 48 hours of launching, the brand collected 133,000 emails and drew 300,000 online sessions. By blending loyalty perks with referrals, LIVELY created a program that not only encouraged sharing but also generated massive early momentum.

FAQs about Shopify Referral Programs

How long does it take to set up a referral program on Shopify?

Most basic referral programs can be set up in 2-4 hours using apps like Bloop or ReferralCandy. However, allow 1-2 weeks for complete planning, testing, and optimization.

What’s the average cost of running a referral program?

App costs typically range from $20-200+ per month depending on features and transaction volume. Factor in reward costs (usually 5-15% of referred revenue) and setup time.

How do I prevent referral fraud?

Implement IP tracking, email verification, manual review for high-value rewards, and set reasonable limits on referrals per customer. Quality referral apps include built-in fraud prevention.

Can referral programs work with other Shopify apps?

Yes, most referral apps integrate with popular email marketing, loyalty, and analytics tools. Check compatibility before choosing your app.

What’s a good referral conversion rate?

Industry averages range from 2-5% for referral program participation and 15-30% conversion rates for referred traffic. These vary significantly by industry and implementation quality.

How do I handle GDPR compliance for referral programs?

Ensure your app provider is GDPR compliant, include clear opt-in language, allow easy unsubscribing, and maintain transparent data usage policies.

>> Ready to get started? Copy the Excel checklist provided in this guide to track your implementation progress. You can also adapt it for Google Sheets or other project management tools.

Conclusion

Buiding a referral program on Shopify is one of the most cost-effective ways to drive sustainable growth for your e-commerce business. By following this comprehensive guide on how to set up a referral rewards program and using the provided Excel checklist, you’ll have a clear roadmap from initial planning through advanced optimization.

Remember, successful referral programs combine the right technology with genuine customer satisfaction. Focus on delivering exceptional products and experiences, and your customers will naturally want to share your brand with others.

The key to learning how to set up a referral program effectively lies in careful planning, consistent execution, and ongoing optimization. Start with the basics, measure your results, and continuously refine your approach based on customer feedback and performance data.

Ready to launch your Shopify referral program? Try Bloop’s referral and loyalty platform free for 14 days and see how easy it can be to turn your customers into your best marketers. With advanced automation, fraud prevention, and seamless Shopify integration, Bloop makes referral marketing simple and profitable.