A Guide to Referral Marketing Automation

Leaving your campaign solely under human supervision can be time-consuming, expensive, and inconsistent. Any discrepancy, even by the slightest margin, can affect your brand image and credibility.

Abdul Wahab

Abdul Wahab

· 8 min read
A Guide to Referral Marketing Automation

On the outlook, referral marketing appears to rely on a plain old formula of word of mouth - happy customers sharing their experiences with friends, essentially leading them to your brand. But companies that have executed a referral marketing campaign know there’s a lot more at stake.

Promoting a referral program on platforms your audience prefers, finding customers who’re capable of advocating for your brand, tracking or attributing referrals to each advocate, and sending out incentives - the mechanics are overwhelming.

Leaving your campaign solely under human supervision can be time-consuming, expensive, and inconsistent. Any discrepancy, even by the slightest margin, can affect your brand image and credibility. Instead of stressing your marketing staff with extra workload, it’s best to employ a referral program automation software.

Program it to your campaign’s terms and conditions, and the software will seamlessly tackle everything around it, from outlining prospects to awarding them with incentives. Let's explore ways to automate your referral program to boost referral output and scale up your business.

Referral Marketing Automation: What Does it Mean?

From conducting pre-launch research to tracking and fulfilling referrals and optimizing campaign structure for better reach, running a customer referral program requires attention to detail beyond human capability.

Referral marketing automation takes the guesswork out of manually launching and running a referral campaign. Instead, the strategy employs specialized referral software to streamline key tasks including audience segmentation, targeting emails, integrating CRM, sending reward payouts, and more.

All you need is to systemize the software to your preferred referral setup and let automation tools handle the rest. Even though most of the automation happens behind the scenes, the software keeps your customers in the loop. Program members can review their referral score (successful leads that convert into customers) and the pending rewards against it.

Why Referral Program Automation is Necessary?

Every manual referral program is at risk of human error. Managing a program with a few hundred participants might be manageable, but as your business grows and your customer channels flood, depending solely on manual labor can be time-consuming and vulnerable to fraud.

Tracking each referral, verifying its eligibility, and attributing rewards under manual supervision can be prone to mistakes, causing customers to scrutinize your credibility. Here are a few reasons why you should use referral marketing automation.

Boost Referral Conversion Rate

Marketers, while preparing for a post-launch campaign, are often tasked to scale the referral program to meet the increasing sign-ups and make amendments to attract new prospects.

Even though 83% of customers are willing to refer a brand following a positive experience, only 29% manage to do so, due to lengthy and inefficient referral procedures.

With referral program automation, you can create an intuitive and seamless enrollment and sharing experience for prospects wishing to participate and refer it to others. Some high-end referral automation tools, like Prefinery, enable custom share links, access gating, and optimize refer-a-friend workflow for explosively massive campaigns.

Eliminate Manual Labor

Managing a referral program manually might seem plausible when your launch campaign is kicking in the initial leads, but only if your marketing and sales team has the productive capacity. Instead of exhausting your capital resource on a marketing campaign - writing individual emails to issue rewards afterward - shift to automation.

Whether it’s promoting your campaign, setting up leaderboards, or fulfilling rewards, referral management software can handle every step with consistency and accuracy. The right tool will even adapt and restructure itself to meet your changing business requirements.

Minimize Launch Costs

In an age where AI and automation tools are handling most of our business dealings, manual attendance is barely required. With automation tools like Prefinery and MailChimp tackling your referral operations, you won't need more than a pair of human eyes to supervise the program.

Automated systems can send referral invitations, reminders, and reward notifications to participants without human intervention, directing the rest of your sales team on more critical tasks.

Measure and Optimize Referral Program

The era of Excel files and color-coded spreadsheets is over. Marketers can now track program performance via live referral dashboards outlining the leads brought over by each advocate, the percentage of leads that convert into referrals, and in turn, new advocates.

As your business evolves and your referral conversion rate improves, your program may need adjustments or changes to align with your goals. Based on the campaign output and your long-standing business objectives, automation ensures easier program adaptation without incurring extensive operational costs.

Streamline Referral Reward Attribution

Perhaps the biggest challenge marketers face while formulating a referral marketing strategy, is curating the right incentives that propel referrals. Finding answers to; how much to reward? Who to reward? When to reward? is a constant struggle since there is no one-size-fits-all referral incentive.

While a lucrative cashback reward strategy has worked for most businesses, you need to devise one that is economical on your budget and equally attractive on the prospect’s part. This is where referral automation tools can do all the heavy lifting. Regardless of the incentive structure you choose, the software makes sure the rewards reach its intended audience on time.

7 Steps to Automate Your Referral Marketing Campaign

Even though word-of-mouth draws organically on customer satisfaction and genuine human connections, setting up a system around it demands considerable effort and resources. The good news is that there are plenty of referral automation software available to streamline your project from start to finish.

But before reviewing the best options for your business, let’s list down the steps or actions needed to automate a referral marketing program.

Registering New Leads to the Program

Visitors who tune in to your website, either by a referral link or search engine, and sign up or make a purchase can be tapped in as leads with referral software. It registers new visitor’s emails and adds them to the program’s participant list. If someone channels in via a referral link, the system associates them with their referrer.

Part of the campaign’s success depends on the referral process. Referral program automation instates a quick and easy sign-up process that encourages participation from a widespread audience, contributing to a higher referral rate. But you can register leads as referrals based on the following scenarios:

  • After a Signup: Program your automation software to count customers as program participants after they register their email for your newsletter or sign up for an early tria.
  • After a Purchase: Whether you’re an eCommerce brand or SaaS startup dealing in products and services, direct the software tool to add customers after referrals make their first purchase.
  • After Filling a Survey Form: If your customers are interested enough to sign up for your webinars or product launch events, you can set up an automation to include them in your referral program as soon as they hit the submit button on the survey form.

Emailing New Program Participants

Even if customers sign up for your referral program intentionally, it isn’t always on top of their minds. In fact, recommending you to others would be their least priority, unless you send them follow-up emails reminding them of the campaign.

In case you haven’t heard back from customers for some time it’s best to send them a reminder email or notification. Instead of maintaining a manual schedule, you can time-specific email messages to be sent out to all dormant participants every month or quarter, when certain referral events happen within your campaign.

Most marketers institute email automation software like MailChimp to send fully customized referral emails to referred customers at designated intervals. Even if you have a marketing strategy in effect, sending friendly reminders keeps prospects hooked on your campaign.

Promoting the Referral Program

Most marketers are focused on a single factor “existing customers make the best referrers” thus losing their shot at going viral. For a referral program to capture maximum participation, it must target prospects beyond their immediate customer base. With a referral automation tool, the tactic becomes a lot more seamless than it sounds.

Instead of targeting every prospect individually, schedule emails, social media posts, and newsletters bi-weekly, weekly, and bi-monthly by integrating specific automated tools. Some email software like GetResponse, come equipped with templates you can customize to fit your brand values.

A subtle way to promote your program in selected audience circles is to embed the referral program link to your email signature. Even a simple “Thank You” email will compel and channel customers to your landing page.

Managing Referral Rewards

A marketer's biggest predicament while curating a referral program is not the incentive they offer, but the way they offer it. A common mistake most startups make is that they curate lucrative incentives that lure audiences initially but fail to engage them long-term, causing significant financial losses.

When choosing the type of reward, determine a suitable reward structure - one-sided, two-sided, or tiered reward. You can set up a reward for both the referrer and their referred friends for signing up on your platform.

For a business enterprise, that implies something more than adding data to your spreadsheets. Counting every successful lead and allotting rewards to participants needs a more efficient mechanism. Here are some ways a referral program software can automate your reward fulfillment process:

  • Deliver rewards in real time once the required criteria are met.
  • Track any time a referral link is used to sign up on a website or a coupon code is inserted during an online purchase.
  • For cash rewards or monetary incentives, the software integrates payment gateways for hassle-free money transfers.
  • Streamlines the verification process to ensure that referrals and actions meet the eligibility criteria before rewards are distributed.
  • Sets a schedule for sending rewards to customers along with a fulfillment notification letting customers know they’ve earned it.

Maintaining Transparency Across Platforms

Transparency is the backbone of a healthy business-customer relationship. Knowing every new lead or referral they generate will be tracked and accounted for, keeps customers motivated to spread your your brand message across. But relying on a strategy that’s largely susceptible to error, puts your business in a bad light.

Referral program automation can tally and sync all new data (shares, leads, signups, etc.,) without requiring any human intervention. Since it integrates your existing CRM or email service provider (ESP), you can set up a live dashboard showcasing your program performance and consumer response.

Setting up right will not only reduce the chances of error but will also protect your program against referral fraud. Most tracking systems are equipped with anti-fraud systems that can detect any fishy behavior from existing or incoming customers.

Measuring Program Performance

Top-notch referral platforms like Prefinery display a live dashboard of the program mechanics including referral signups, unique referral code generation, preferred mode of sharing, and incoming leads that tune in through those leads. This constant supervision of your program will allow you to identify top brand ambassadors, churning customers, and potential reasons compelling them to drift away.

Tips for Choosing the Best Referral Marketing Automation Tool

As affiliate marketing went mainstream, many automated referral program solutions rose to dominance with it. With plenty of options available in the market, consider the following things before finalizing your pick:

  • User-Friendly Interface: Look for a tool with an intuitive and user-friendly interface. It should be easy for both you and your customers to navigate.
  • Integration Capabilities: Ensure that the tool can integrate with your current website, CRM, email marketing platform, and e-commerce software.
  • Customization Options: Choose a tool that supports customization of referral program templates, emails, and messaging to maintain brand consistency.
  • Referral Tracking and Attribution: The tool should offer robust tracking capabilities to accurately attribute referrals to the right sources. Real-time tracking helps ensure transparency and prevents fraud.
  • Scalability: Consider the scalability of the tool. Can it handle an increasing volume of referrals as your program grows? Ensure that it can accommodate your business's long-term needs.

Closing Note

Happy customers are your biggest asset, and referral programs can leverage that connection to scale your business. If leveraged right, a referral marketing program can boost your lead generation, build a positive brand image, and expand your presence.

But to ensure everything goes according to plan, you must implement a referral automation tool to streamline mechanics and keep the workload off your sales team. Professional referral marketing software like Prefinery will seamlessly adapt to your existing workflow and systemize routine tasks with no risk of failure.


What is automated referral management?

The use of software and tools to streamline and optimize the process of tracking, rewarding, and managing referrals in a referral marketing program lies under automated referral management. It automates tasks such as tracking referrals, calculating rewards, delivering incentives, and monitoring program performance, making it more efficient and scalable for businesses.

What are the benefits of referral marketing automation?

A successful automated referral marketing program typically helps in:

  • Automated tracking of referrals and their sources.
  • Instant reward calculations and delivery.
  • Integration with existing systems (e.g., CRM, email marketing).
  • Comprehensive analytics and reporting.

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