Referral Marketing Glossary

  • A/B Testing: A method of comparing two versions of a marketing asset (e.g., referral email, landing page) to determine which performs better.

  • Advocates: Customers who are strong supporters of your brand and actively recommend it to others.

  • Affiliate app: A software application that allows businesses to manage and track affiliate marketing programs.

  • Attribution: The process of assigning credit to the marketing channel or touchpoint that led to a conversion (e.g., a referral leading to a purchase).

  • Click-Through Rate (CTR): The percentage of people who click on a referral link or call-to-action. (Clicks / Impressions) x 100.

  • Conversion Rate: The percentage of referred visitors who complete a desired action, such as making a purchase. (Conversions / Referred Visitors) x 100.

  • Customer Acquisition & Retention: Strategies focused on attracting new customers and keeping existing ones engaged and loyal.

  • Customer Advocacy: The act of customers publicly supporting and recommending a brand.

  • Customer Acquisition Cost (CAC): The total cost of acquiring a new customer through referral marketing. (Total Referral Marketing Spend / Number of New Customers Acquired).

  • Customer referral channel: The specific methods or platforms used to facilitate customer referrals.

  • Customer Lifetime Value (CLTV or LTV): The total revenue a customer is expected to generate throughout their relationship with your brand.

  • Customer-to-customer referral program: A referral program that encourages existing customers to refer new customers.

  • DTC Ecommerce: Direct-to-consumer e-commerce, where brands sell directly to customers without intermediaries.

  • Double-Sided Referral: A referral program that rewards both the referrer and the referred customer.

  • Gamification: Incorporating game-like elements (e.g., points, badges, leaderboards) into a referral program to increase engagement.

  • Incentives: Rewards or benefits offered to encourage specific actions, such as referrals or purchases.

  • Landing Page: A dedicated web page where referred visitors arrive after clicking a referral link.

  • Milestone reward system: A program that offers increasing rewards as customers reach specific milestones, such as a certain number of referrals or purchases.

  • Net Promoter Score (NPS): A metric that measures customer loyalty and advocacy by asking customers how likely they are to recommend your brand.

  • Opt-in rates: The percentage of people who choose to participate in a referral program or marketing campaign.

  • Peer-to-peer marketing: Marketing that relies on recommendations and word-of-mouth from individuals.

  • Personalised messaging: Tailoring marketing messages to individual customers based on their preferences and behavior.

  • Pop Up: An interface that is shown as an overlay on top of the website

  • Referral Link: A unique URL that identifies the referrer and tracks referrals.

  • Referral Program: A marketing strategy that encourages existing customers to refer new customers to your brand.

  • Referral Rate: The percentage of customers who participate in a referral program. (Number of Referrals / Total Customers) x 100.

  • Referral Reward: The specific benefit offered to a customer who successfully refers a new customer.

  • Repeat purchases: Customers making multiple purchases from a brand over time.

  • Repeat referrals: Customers making multiple referrals to a brand over time.

  • Retail Ecommerce: E-commerce businesses that sell goods to individual consumers.

  • Return on Investment (ROI): The profitability of a referral marketing program. (Net Profit / Total Referral Marketing Spend) x 100.

  • Return on Ad Spend (ROAS): A marketing metric that measures the amount of revenue earned for every dollar spent on advertising. 1 (Revenue from Advertising / Advertising Spend)

  • Revenue driven with customer referral automation: Using technology to automate and optimize referral programs to maximize revenue.

  • Reward distribution: The process of delivering rewards to customers who have successfully made referrals.

  • Shareable Content: Content that is easily shared by customers, such as referral links, social media posts, or email templates.

  • Shopify: A popular e-commerce platform.

  • Shopify Plus: An enterprise-level e-commerce platform offered by Shopify.

  • Single-Sided Referral: A referral program that only rewards the referrer.

  • Tiered Rewards: A referral program that offers different levels of rewards based on the number of successful referrals.

  • Tracking Pixel: A small piece of code placed on a website to track user behavior and conversions.

  • Viral Coefficient: The average number of new customers generated by each existing customer through referrals. A coefficient greater than 1 indicates viral growth.

  • Word-of-Mouth Marketing (WOMM): The organic spread of information about a brand through customer conversations and recommendations.

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