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What is Referral Code?

By Meagan Kral

What is Referral Code?

A referral program is a system where loyal customers of a brand can tell their friends and family about the company. Then, if their friend or family purchase from the brand or sign up for a service, the customer will earn a reward. This works by the program providing an easy and safe method for the customer to share the brand, whether by a referral code or link, and rewarding the customer when their friend or family member purchases through their link or with their code. Referral marketing is often beneficial for marketing strategies because it leads to higher conversion rates. In many circumstances, referral marketing can have better results than traditional marketing. Are you considering a referral program for your company?

It can be extremely beneficial to your company and make a lasting impact on your marketing strategy. In this article, we’ll give you a complete guide to the difference between referral links and codes, examples of top referral codes, and top tools for setting up a referral program.

What is a Referral Code?

A referral code is a unique string of letters, numbers, or both, provided to customers to share with potential new customers. When new customers use this code to make a purchase or sign up for a service, the person who referred them will receive credit for the successful referral. This system incentivizes existing customers to promote a brand, leveraging personal networks to drive growth, while tracking the effectiveness of referral marketing campaigns.

Ibotta Referral code program

Are referral links and referral codes the same thing? The answer is no. While a referral code and referral link both contain a unique code, the main difference is that with a referral link, the code is hidden inside of the link, while with a referral code, it’s merely the code itself.

Referral links and referral codes are both effective tools for driving customer referrals, but they come with their own set of pros and cons.

Referral links, often in the form of unique URLs, make it incredibly convenient for leads to share their referral with a simple click. They offer a seamless user experience and are easily tracked, making it straightforward to credit leads for successful referrals. However, they can appear less personalized.

Dropbox referral link program

Referral codes can be a bit more flexible and provide a more personal touch as leads can verbally share a code with their friends. The main disadvantage of using a referral code is that it requires the the referee to manually input the code when signing up. They either forget to input the referral code when signing up, or think it’s too much work especially if the code is long and complex.

Referral code program

There’s no right or wrong answer when it comes to choosing a referral code or referral link for your referral program. The choice between the two really depends on your specific program goals and user experience preferences.

How do I Generate Referral Codes for my Customers?

You can generate referral codes and links in a few different ways, but the most common ways are using a third-party referral program platform or setting up a structured system within your business. Essentially, it’s creating a unique code and link, if necessary, for each participant, integrating a tracking mechanism, deciding on the reward for each purchase, and then providing participants with promotional material for their links or codes.

Top Examples of Referral Codes Today

Without an idea of what top referral codes look like, you can’t be expected to run your own and ensure it works. Fortunately, we have many good examples of top referral codes today.

YesStyle

YesStyle launched a dual sided refer a friend program for current users. Users shared their unique code with friends. The friend would receive 5% off their purchase and a discount on future purchases, while the referrer received in app currency equivilant to the amount their friend saved in their order for a future purchase.

YesStyle referral code program

Google Pixel

Google launched their Superfan referral program for their current users. Users shared their unique code with friends to purchase a Pixel 6a, Pixel 7 or Pixel 7 Pro from the Google Store. Both the referrer and referee received a $100 promo code to use at the Google Store.

Google Pixel referral code program

Temu

Temu referral code program

Temu’s referral program is designed to reward its users for inviting new customers to the platform. When a current user shares their unique referral code with a new user, and the new user completes a purchase through that code, the referrer earns up to 20% in comission.

Conclusion

A referral program can be game-changing for your company, leading to higher conversion rates and brand awareness. However, it’s important to understand that there’s a difference between referral codes and links, the main one being that codes are a unique combination of characters, and a link is a URL that contains that code. There are pros and cons of both. We shared top examples of referral codes today and the top tools for setting up a referral program. Run your next referral campaign with KickoffLabs and meet success!


Read more Referral Programs with the next chapter:

4. What is a Referral Link?

Learn what a referral code is, how it functions, and the process for generating them for your customers.

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