The Referral Reward is the reward you give to your Advocates for successfully referring their Friends to the store.
Before you decide on a Referral Reward, it’s important for you to know this: there’s no “perfect” reward structure. As you learn more about your Advocates, you can then fine-tune your reward structure to make them more appealing.
Here’s a quick decision-making process to help you choose a Referral Reward:
1. If your Advocates are likely to make repeat purchases, give discounts.
The reasoning is simple: Given that your Advocates will likely make a repeat purchase sometime in the future, a discount on that purchase as a reward will be perceived as being valuable to them. And they will be motivated to refer their friends so that they can get the discount.
2. Choosing between a % discount versus a $ discount? -- Consider the Rule of 100.
If your product costs more than $100, using a cash discount sounds more impressive. If your product costs less than $100, then a percentage discount sounds more impressive. Read more about Rule Of 100.
3. If your Advocates are unlikely to make repeat purchases, give cash.
4. How much of a discount or cash should I give?
5. Can I give out custom rewards instead?