Glossary
Referral and affiliate marketing, defined
60 terms Shopify merchants run into when they launch a referral or affiliate program, each in a few plain sentences.
Referral basics
- Referee
- A referee is the friend a referrer invites: a new customer who uses a referral link or code to claim an offer on a first order. Their purchase is what triggers the referrer's reward.
- In BLOOP: Referrer and referee rewards →
- Referral campaign
- A campaign is the set of rules behind a program: who can join, what each side earns, how it looks, and which emails go out. Running more than one lets you test different offers or serve different customer groups.
- In BLOOP: A/B testing →
- Referral code
- A referral code is a short code a referrer can type or say out loud. It suits word of mouth, podcasts and offline sharing, where a long URL does not work. The friend enters it at checkout instead of clicking a link.
- In BLOOP: Referral links and codes → Read the guide →
- Referral link
- A referral link is a unique URL that carries a referrer's identity to your store. When a friend clicks it and buys, the order is credited to that referrer. Links work best where people can click, such as email, chat and social posts.
- In BLOOP: Referral links and codes → Read the guide →
- Referral page (referral hub)
- The referral page is where a signed-in customer finds their link and code, sees their referrals and checks the rewards they have earned. A clear page makes sharing a one-step action instead of a hunt through account settings.
- In BLOOP: Popup, referral page and hub →
- Referral program
- A referral program rewards existing customers for bringing in new ones. A customer shares a link or code, a friend buys, and the store pays a reward for that sale. It turns word of mouth into a trackable channel with a known cost per customer.
- Example: a customer shares a link, a friend buys a $60 order, and the store gives the customer a $10 coupon. The acquisition cost for that sale is the $10 reward.
- In BLOOP: Referral links and codes → Read the guide →
- Referrer
- A referrer is an existing customer who shares a referral link or code with friends. They earn a reward once a friend makes a qualifying purchase. In BLOOP, every referrer gets a unique share code.
- In BLOOP: Referral links and codes →
- Target audience (program eligibility)
- Target audience is the rule that decides who may join a referral campaign. In BLOOP the options are everyone, logged-in customers, or one or more Shopify customer segments. Limiting it to past buyers keeps the program tied to people who already trust you.
- In BLOOP: Referral links and codes →
- Word-of-mouth marketing
- Word-of-mouth marketing is growth that comes from people recommending a brand to others in their own circle. A referral program does not create the behavior, it gives it a link, a reward and a way to measure it.
- Read the guide →
Rewards
- A/B testing (reward variants)
- A/B testing compares two versions of an offer side by side to see which performs better. In BLOOP you can split two reward variants 50/50 within one campaign and compare conversion.
- Example: variant A (10% off) converts 40 of 500 referred visitors (8%) and variant B ($10 off) converts 55 of 500 (11%). B is ahead, but a sample this small needs more traffic before you trust it.
- In BLOOP: A/B testing →
- Cash reward
- A cash reward is paid to a referrer or affiliate in money rather than as a coupon or credit. In BLOOP it is paid manually outside Shopify, and BLOOP keeps track of how much you owe.
- In BLOOP: Affiliate payouts →
- Custom reward
- A custom reward is a referrer reward you fulfill yourself, such as early access or a gift, when the platform cannot issue it automatically. It is useful for non-monetary perks that fit your brand.
- In BLOOP: Referrer and referee rewards →
- Discount coupon
- A discount coupon is a Shopify discount code used as a reward or handed to an affiliate to share. Shopify's amount-off discounts can be a percentage or a fixed amount, so the same mechanism covers both styles of offer.
- Example: a 15% code on an $80 order takes $12 off, leaving $68.
- In BLOOP: Referrer and referee rewards →
- Double-sided reward
- A double-sided reward gives something to both people: the referee gets an offer and the referrer gets a reward. Both sides have a reason to act, which usually makes sharing feel more generous than asking a friend to buy for your benefit. BLOOP calls this a two-sided reward, and every BLOOP referral works this way.
- Example: the friend gets 10% off a first order and the referrer gets a $10 coupon after that order is placed.
- In BLOOP: Referrer and referee rewards → Read the guide →
- Free product reward
- A free product reward gives a chosen product at no cost, redeemed at checkout. It works well when the product is cheap to you but valuable to the customer, and it doubles as sampling for something you want them to try.
- Example: a $25 retail item with a $7 landed cost costs you $7 to give away.
- In BLOOP: Referrer and referee rewards →
- Minimum purchase requirement
- A minimum purchase requirement means a referral only qualifies when the order reaches a set amount or item count. It protects margin, since a heavily discounted tiny order can cost more than it earns.
- Example: with a $10 reward and a $50 minimum order, the reward is at most 20% of the smallest qualifying order.
- In BLOOP: Referrer and referee rewards →
- Minimum referees
- Minimum referees is a condition that releases the referrer reward only after a set number of successful referees. It makes a reward harder to earn, which lowers cost per reward and favors sustained sharing over a single lucky share.
- In BLOOP: FlexiTiers →
- Referee reward
- A referee reward is the incentive a new customer gets for using a referral, typically a discount on the first purchase. It lowers the barrier to a first order, which is the hardest sale to win.
- In BLOOP: Referrer and referee rewards →
- Referrer reward
- A referrer reward is what the existing customer earns after a referee's qualifying purchase. BLOOP supports a discount coupon, store credit, a free product, cash or a custom reward. Pick one that your margin can carry and that customers actually want to use.
- In BLOOP: Referrer and referee rewards → Read the guide →
- Revoke
- To revoke is to take back a reward or commission already issued because the order behind it was cancelled or fully refunded. Revoking keeps you from paying for sales that did not stay sold.
- In BLOOP: Fraud Center →
- Reward expiry
- Expiry is an optional limit that makes a reward code unusable a set number of days after it is created. A deadline nudges people to act and caps how long an unused reward stays outstanding.
- In BLOOP: Referrer and referee rewards →
- Reward review period
- A review period is a delay, in hours, before a referrer reward is approved. It gives you time for returns and cancellations to show up before you pay out, which cuts the chance of rewarding an order that never sticks.
- Example: a 48-hour review period means a reward for an order placed on Monday at noon is approved no sooner than Wednesday at noon.
- In BLOOP: Fraud Center →
- Store credit
- Store credit is a balance a customer can spend in your store later. As a referral reward in BLOOP it is applied straight to the customer's Shopify account. Because it can only be spent with you, it tends to pull referrers back for another order.
- Example: a $10 store credit applied to a $60 order leaves $50 to pay.
- In BLOOP: Referrer and referee rewards →
- Tiered referral rewards (FlexiTiers)
- Tiered rewards grow as a referrer reaches new milestones, so a customer with more successful referrals earns a better reward. BLOOP's version, FlexiTiers, lets each tier carry its own reward type, value and conditions.
- Example: the first referral earns a $5 coupon, and the third earns a free product.
- In BLOOP: FlexiTiers → Read the guide →
Referral metrics
- Average order value (AOV)
- Average order value is the average amount spent per order. Compare the AOV of referred orders with your store-wide figure: if referred orders are larger, you can afford a richer reward. If they are smaller, set a minimum purchase.
- Example: $9,000 in sales across 150 orders is an AOV of $9,000 / 150 = $60.
- Customer acquisition cost (CAC)
- Customer acquisition cost is what you spend to win one new customer. For a referral program, add the reward cost and any program costs and divide by new customers referred. Compare it with your paid-channel CAC to judge the channel.
- Example: $400 in rewards and $100 in other program costs across 25 referred new customers is $500 / 25 = $20 CAC.
- Customer lifetime value (CLV)
- Customer lifetime value is the total revenue or profit a customer brings over the time they buy from you. It sets the ceiling on what you can pay to acquire someone. Referred customers are often compared against it to see whether they stay.
- Example: a $50 average order, 3 orders a year, over 2 years is $50 x 3 x 2 = $300 in revenue.
- K-factor
- K-factor is another name for the viral coefficient. It is written K = i x c, where i is invites per customer and c is the conversion rate of those invites. A K below 1 still lowers what you pay for each new customer.
- Example: i = 3 invites and c = 0.2 gives K = 3 x 0.2 = 0.6.
- Referral conversion rate
- Referral conversion rate is the share of people who click a referral link and then buy. Compare it with your overall store conversion rate rather than a generic benchmark, since your own traffic is the fair baseline.
- Example: 400 referral link clicks that produce 28 orders is 28 / 400 = 7%.
- In BLOOP: Referral links and codes → Read the guide →
- Referral program ROI
- Referral program ROI compares the profit from referred sales with what the program cost. Use gross profit, not revenue, and count both the referrer and referee rewards.
- Example: 20 referred first orders of $60 at a 40% gross margin give $480 gross profit. Rewards cost $16 per order ($10 + $6), so $320 total. ROI is ($480 - $320) / $320 = 50%.
Affiliate basics
- Affiliate
- An affiliate is an outside partner, such as a creator, blogger or publisher, who promotes your store with a unique link and earns a commission on orders they drive. Unlike a referrer, an affiliate usually is not a customer.
- In BLOOP: Affiliate portal and registration → Read the guide →
- Affiliate code
- An affiliate code is a discount code assigned to one affiliate so their audience gets a deal and the store can see which partner a sale came from. Codes complement the affiliate's tracking link where links are hard to share, such as podcasts, video and offline mentions. In BLOOP, each approved affiliate has a unique referral link and can be given a personal discount coupon.
- Example: an affiliate reads the code MAYA15 on a podcast, and a listener types it at checkout to get 15% off.
- In BLOOP: Commissions and tracking →
- Affiliate network
- An affiliate network is a third-party marketplace that connects merchants with publishers and handles tracking and payments for a fee. A self-run program on your own store avoids network fees but means you recruit partners yourself.
- Affiliate portal
- The affiliate portal is the partner-facing area where an affiliate logs in to find their link and coupon, track sales and view payouts. A clear portal saves you from answering the same status questions by email.
- In BLOOP: Affiliate portal and registration →
- Affiliate program
- An affiliate program pays outside partners a commission when their audience buys from you. You supply the links, terms and tracking, and the partner supplies reach. You pay only when a sale happens.
- In BLOOP: Affiliate portal and registration →
- Affiliate terms and conditions
- Affiliate terms are the written rules partners agree to: commission rates, cookie length, payout timing, banned tactics and disclosure duties. Clear terms prevent disputes about what counts as a valid sale.
- Brand ambassador
- A brand ambassador is someone who represents your brand over time, often a loyal customer or creator, rather than for a single campaign. Programs usually mix perks, early access and a commission or referral reward.
- Influencer vs affiliate
- An influencer is paid for reach, often a flat fee per post, whatever sales result. An affiliate is paid on results, through a commission on tracked orders. Many creators do both, so the contract and the tracking link decide which one applies.
- Example: a $500 flat post fee that drives 10 orders costs $50 per order. A 15% commission on ten $60 orders costs $90 in total, or $9 per order.
- Pending affiliate (self-registration)
- A pending affiliate has signed up on their own but has not been approved yet. Reviewing applications before they go live lets you screen partners for fit and quality.
- In BLOOP: Affiliate portal and registration →
- Referral program vs affiliate program
- A referral program targets your own customers and usually pays store rewards, while an affiliate program targets outside partners and pays commission. The mechanics overlap, so many Shopify stores run both side by side.
- Read the guide →
Tracking and attribution
- Attribution
- Attribution is deciding which referrer or affiliate gets credit for an order. Done well, the right person is rewarded and your numbers match reality. In BLOOP it works through share codes and affiliate links.
- In BLOOP: Commissions and tracking →
- Attribution window
- The attribution window is how long after a click or share a purchase can still be credited to the source. A longer window credits more sales but also pays for people who would have bought anyway.
- Example: with a 30-day window, a click on October 1 can earn credit for an order placed through October 31.
- In BLOOP: Commissions and tracking →
- Auto-apply discount
- An auto-apply discount applies an affiliate's discount automatically to customers who arrive through their link, with no code to enter. It removes a checkout step, and it stops shoppers from leaving to search for a code.
- In BLOOP: Commissions and tracking →
- First-click attribution
- First-click attribution gives all credit to the first link a customer clicked. It rewards discovery, which suits creators who introduce shoppers to your brand, but it ignores whatever convinced them to finish buying.
- In BLOOP: Commissions and tracking →
- Last-click attribution
- Last-click attribution gives all credit to the final link a customer clicked before buying. It is simple and easy to audit, but it can undercredit earlier touchpoints and let a late coupon-site click collect a commission it did not earn.
- Example: a shopper clicks a creator's link on Monday, then a coupon-site link on Friday and buys. Under last-click, the coupon site gets the commission.
- In BLOOP: Commissions and tracking →
Commissions and payouts
- Affiliate commission
- A commission is what an affiliate earns on a qualifying order. In BLOOP it is calculated as a percentage, a flat amount per order or a flat amount per item. Pick the structure that fits your margin and basket size.
- Example: 15% of an $80 order is $12. A flat $3 per item on a 4-item order is also $12.
- In BLOOP: Commissions and tracking →
- Commission approval delay
- A commission approval delay holds a commission for a period before it becomes payable, so refunds and returns can land first. Longer delays protect you more but make affiliates wait.
- Example: a 30-day delay on a $12 commission for an October 1 order makes it payable on October 31 if the order is not refunded.
- In BLOOP: Commissions and tracking →
- Earnings per click (EPC)
- Earnings per click is total commission divided by clicks, the average amount an affiliate earns for each click they send. It lets partners compare programs and lets you spot which affiliates send traffic that converts.
- Example: $150 in commission from 600 clicks is $150 / 600 = $0.25 per click.
- In BLOOP: Commissions and tracking →
- Payout
- A payout is the recorded payment of an affiliate's approved, unpaid commission. In BLOOP the payout is logged so both sides can see what has been settled and what is still owed.
- In BLOOP: Affiliate payouts →
- Payout method
- The payout method is how you pay affiliates or cash rewards, for example bank transfer or PayPal. Name your methods in the program terms so partners know how and when they get paid.
- In BLOOP: Affiliate payouts →
- Payout threshold
- A payout threshold is the minimum balance an affiliate must reach before you pay them. It avoids a stream of tiny transfers and the fees that come with them.
- Example: with a $50 threshold, an affiliate holding $35 waits. After $20 more in approved commission they hold $55 and become eligible.
- In BLOOP: Affiliate payouts →
Fraud and compliance
- Coupon leakage
- Coupon leakage is when a discount code meant for a small group spreads to people who were never meant to have it, often through coupon sites. You give away margin on sales that would have happened anyway.
- Example: a code leaked to a coupon site is used on 500 orders averaging $60 at 15% off. That is 500 x $9 = $4,500 in discounts.
- In BLOOP: Fraud Center → Read the guide →
- Fraud Center
- Fraud Center is the area of BLOOP that flags suspicious referral activity, such as self-referrals, shared IPs and unusual volume, and holds the reward for 14 days. A hold gives you time to review before anything is paid.
- In BLOOP: Fraud Center →
- FTC disclosure
- An FTC disclosure is a clear statement that an endorser has a material connection to a brand, such as earning commission or getting free product. The FTC says affiliate links need disclosure, and each post with a relationship should carry its own. Put it where people will notice it, not buried at the end or in comments.
- Example: a post that says "I get commissions for purchases made through links in this post" next to the link, the wording the FTC gives as an example.
- In BLOOP: Affiliate portal and registration →
- Referral fraud
- Referral fraud is any attempt to earn rewards without genuine referrals: fake accounts, repeated self-referrals, or orders placed and cancelled to cash in the reward. Review periods and fraud checks are the usual defenses.
- In BLOOP: Fraud Center → Read the guide →
- Self-referral
- A self-referral happens when someone refers themselves, usually with a second email or account, to collect both rewards. It is a common way referral programs leak money.
- Example: someone uses a new email to buy with their own link, claims a $10 discount and earns a $10 coupon, a $20 swing on one purchase.
- In BLOOP: Fraud Center → Read the guide →
Want the long version with examples? Read the referral program glossary on the blog.
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