Referral Tracking: What It Is & Why It’s Crucial

May 9, 2022 | Referral Marketing

So, you’ve started a referral program for your business—great! 92% of consumers trust suggestions from friends and family more than advertising, so referrals are a great source of marketing for your business. Customer referrals can encourage new visitors to your company and even boost your revenue even in not-so-busy seasons. Once you start your referral program machine rolling, your next best step is to begin tracking referrals. Referral tracking is the process of collecting data across the referral process. Tracking referrals is vital for business growth, as it can help you maximize your business’s impact and even increase your ROI. Let’s explore the benefits of referral tracking and how it can grow your business.

What is Referral Tracking & Why Does it Matter?

Referral tracking is collecting data about your customers throughout the referral process. From the time a customer joins your referral program to the time they use a discount, you can watch these data points to learn more about your customers. Activities you can track could include a customer registering as a referrer, sharing a referral link with a friend, or redeeming a discount gathered through a referral.

In the end, these points of data show you your customers’ behaviors and how they respond to your referral marketing efforts. With enough data, you can map out a customer’s entire referral journey and optimize it for the best results. A solid referral program not only gives the customer value but it places your brand in a good light and increases the number of referrals you generate.

Benefits of Referral Tracking

  • Measuring Customer Satisfaction – If a customer is satisfied with your services, they will want to spread the good news about your business. That’s the power of word of mouth! Referral tracking helps you see if customers readily spread the word about your business or if you may need to build up a base of loyal customers to promote your business.
  • Monitoring Conversion Rates – Conversion rates help you determine if your referral campaign is working or not. Comparing referral campaigns’ conversion rates can help you assess which campaigns are effective or may need adjusting to boost conversions.
  • Optimizing Customer Journey – Referral tracking lets you see a customer’s journey from start to finish throughout the referral process. Suppose a customer fails to redeem a discount or clicks the link to book a table but does not complete the reservation. In that case, you can reengage those customers with friendly text reminders or optimize that part of the referral journey to encourage conversions.
  • Reengaging Referrers – Tracking referrals can help you see your top referrers and monitor the revenue they bring your business. Reengaging your top promoters can increase customer retention and draw new customers to your business.
  • Preventing Referral Fraud – Referral fraud is when a customer may try to abuse the referral process to get the most out of the incentives you are offering. Examples of referral fraud include self-referrals, account cycling, and duplicated referrals. By tracking your referrals, you can prevent fraudulent activities and remove customers from your referral program.
  • Assessing Your Revenue – Referrals are meant to draw more revenue to your business. But how can you know if your referrals are generating revenue if you can’t see the results of your campaigns? Tracking your referrals can help you know the ROI generated by each customer.
  • Tracking Referral Sources – Are your referrals coming from a loyal customer or a new customer with many connections? Referral tracking lets you see where your customers are coming from, whether they are new or returning customers, and how active they are in redeeming discounts.

How Can I Track Referrals?

One of the best and easiest ways to start tracking referrals is using referral tracking software. Referral tracking/referral marketing software helps you automate your referral process by condensing tracking, campaign creation, and customer onboarding into a single platform. Referral tracking software shows you the impact of your referral efforts by showing you a wide variety of customer data points. This can include conversion rates, open rates, revenue generated, and the number of discounts redeemed by a customer. Most referral tracking software, like Check This Out, can be customized to fit your business’s needs. The best referral software has additional functions to make your referral efforts even more impactful, like discount redemption, text message campaigns, and mobile-friendly features so you can track referrals on the go.

Start Tracking Referrals Now!

Get the most out of your referral program and start tracking referrals with Check This Out. Check This Out’s referral tracking software lets you see the full scope of your referral program and create new campaigns with ease. With Check This Out, you can create and track campaigns from the comfort of your phone and send text message campaigns customized with photos, videos, and discounts. Our team customizes the software to meet the needs of your business so you can focus on doing what your business does best: providing customers with top-notch services. Get your demo today, or drop us a line to learn more about our referral tracking software.

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