How to Set Up a Woocommerce Referral Program?

Most WooCommerce stores spend money on ads to get new customers. Some of those customers buy once and never come back.

There’s a cheaper way. Your existing customers already know people who’d like your products. A WooCommerce referral program gives them a reason to spread the word and rewards them when their friends actually buy.

Research from Annexcloud shows that referred customers are 18% more likely to stay loyal than customers acquired through other channels. And according to Review42, a referred customer has a 16% higher lifetime value than a non-referred one.

The problem? WooCommerce doesn’t include a referral feature by default. You need a plugin to set one up.

This guide walks through everything:

• what a referral program is,
• how it differs from an affiliate program,
• how to set one up step by step using WPLoyalty,
• reward ideas that actually motivate customers,
• promotion strategies and more

What Is a WooCommerce Referral Program?

A WooCommerce referral program is a word-of-mouth marketing system where you reward existing customers for bringing new buyers to your store. It’s one of the most effective customer acquisition strategies available for ecommerce.

The workflow is simple:

1. A customer gets a unique referral link from their My Account page
2. They share it with friends, family, or on social media
3. When someone clicks that link and makes a purchase, both the referrer and the new customer can receive a reward
4. The reward could be loyalty points, a discount coupon, a free product, or free shipping

Referral Program vs Affiliate Program

This is the most common confusion we see. They sound similar but work differently.

Most WooCommerce stores benefit from running both. A referral program turns happy customers into advocates. An affiliate program turns content creators and marketers into salespeople.

Related reading: We’ve also written a broader guide on how to create a referral program beyond just WooCommerce if you need the wider context.

Why Your WooCommerce Store Needs a Referral Program

WooCommerce out of the box lets you sell products, manage orders, and process payments. It does not let you create referral links, track who referred whom, or automatically reward customers for bringing in new buyers.

That gap matters because referral customers are fundamentally different from ad-acquired customers:

• They cost less to acquire. You’re paying a $10 discount instead of $30–50 in ad spend per customer.
• They trust your brand faster. A recommendation from a friend bypasses the skepticism that comes with clicking an ad.
• They have a higher lifetime value. Referred customers arrive with built-in trust and are more likely to become repeat buyers. . You can track this using the same retention metrics you’d use for any cohort analysis.
• They bring more referrals. Referred customers who have a good experience are more likely to refer others themselves, creating a compounding growth loop.
• They increase customer retention. Customers who participate in referral programs stay engaged because they have a reason to come back – rewards waiting to be used, and friends they’ve already told about your store.

Types of WooCommerce Referral Programs

Not all WooCommerce refer-a-friend programs work the same way. Choose the structure that fits your store’s goals.

One-sided referral programs

Only the referrer gets a reward. The new customer gets nothing extra. Simple to set up, but less motivating for the friend to actually complete a purchase.

Two-sided (give-and-get) referral programs

Both the referrer and the new customer receive a reward. This is the most effective structure because both parties have an incentive. “Give $10, Get $10” is the classic format.

Milestone-based referral programs

Rewards unlock at specific referral counts. “Refer 3 friends and get free shipping for life.” Creates a goal for customers to work toward.

Guest referral programs

New customers (not yet registered) receive an instant coupon reward when they arrive via a referral link and provide their email. The coupon is allowed to be used in their first purchase itself.

How to Set Up a WooCommerce Referral Program (Step by Step)

To set up a WooCommerce referral program you need a plugin like WPLoyalty because WooCommerce doesn’t have referral functionality built in.

Now, let’s create an example of a referral program for WooCommerce: $10 fixed discount for both referee and referrer.

Note: WPLoyalty offers five reward types: Loyalty Points, Fixed Discount, Percentage Discount, Free Product, and Free Shipping. You can use any of these as your referral reward.

Step 1: Install and activate the “WPLoyalty” plugin.

• Download WPLoyalty.
• Go to WordPress dashboard -> Plugins -> Add New -> Upload Plugin.
• Upload the WPLoyalty plugin zip file.
• Select “Install now.”

A step-by-step installation guide is available in the WPLoyalty documentation.

Step 2: Set Up Referral Rewards (Fixed Discount).

• Go to your WordPress dashboard -> WPLoyalty -> Rewards -> Create a new reward.
• Choose the “Fixed Discount” type.
• Enter Reward title and description.
• Choose “Reward as coupon immediately.”
• Set the fixed discount value as “10.”
• Save and close it.

Here is the screenshot of the example configuration:

The fixed discount of $10 is now set as the referral reward. Next, we’ll set up a referral campaign and apply this reward for both existing customers and new customers.

Step 3: Create a WooCommerce Referral Campaign

• Go to your WordPress dashboard -> WPLoyalty -> Campaigns -> Create New Campaign.
• Select “Referral Campaign.“
• Enter the referral campaign name and description.
• Select “Coupon reward” for both existing customer and new customer sections.
• In the coupon reward field, “$10 discount coupon” we created in the rewards section.
• Save and close the referral campaign.

Remember to save and activate the campaign. Now, both referrers and referees will receive a $10 fixed discount for successful referrals.

Step 4: Promote the WooCommerce Referral Program to Your Customers.

WPLoyalty provides three options for your existing customers to discover your referral program.

1. In My Account -> Points & Rewards
2. A chat-like Launcher widget
3. A loyalty rewards page

The unique referral link, earning opportunities and reward opportunities can all be discovered from these three options.

1. In My Account -> Points & Rewards

Your existing customers can log in to their account page (My Account) and go to the “Points and Rewards.”

2. Launcher Widget

Launcher Widget allows your customers to quickly discover the rewards they have earned and various ways to redeem their rewards.

Your customers can click on the ‘My Rewards’ button at the bottom right corner of the page and can discover your referral program.

3. Loyalty Reward Page

You can create a separate loyalty reward page which displays your referral program.

5 WooCommerce Referral Reward Ideas That Actually Work

The reward determines whether customers actually bother sharing their link. Make it too small and nobody cares. Make it too big and you eat into margins.

1. Fixed discount coupon (“Give $10, Get $10”). The most popular format. Clear value, easy to understand. Works best when the discount is 10–15% of your average order value.

2. Percentage discount (“Give 15%, Get 15%”). Better for stores with a wide price range. A 15% discount feels meaningful on a $200 product but also on a $30 product. Use a discount plugin for WooCommerce alongside the advanced coupon rules.

3. Loyalty points. “Refer a friend, earn 500 points.” Points accumulate across multiple referrals, creating a reason to keep referring.

4. Free shipping on next order. Low cost to you, high perceived value to the customer. Especially effective if your standard shipping costs are $8+.

5. Double reward events. “This weekend only: referral rewards are doubled.” Creates a spike of referral activity around a specific period. This is a gamification technique that drives short-term urgency.

How to Promote Your WooCommerce Referral Program

Setting up the program is step one. Getting customers to actually use it is step two – and where most stores drop the ball.

Post-purchase email. Send a customized email after every completed order: “Love your purchase? Share $10 with a friend and earn $10 for yourself.” This automated follow-up is the highest-converting moment because the customer just had a positive experience.

Thank-you page. Add your referral program CTA to the WooCommerce order confirmation page. The customer just bought something – they’re in a sharing mood. Consider optimizing the checkout to make the entire post-purchase flow seamless.

Social media. Announce the program on Instagram, Facebook, and Twitter.Pin the “Give X, Get X” offer to your profiles. You can even reward customers with points for sharing on social to double the incentive.

Website widget. Use a banner on your homepage or a triggered popup for logged-in customers. Adding up a Launcher Widget keeps the referral program visible on every page without being intrusive.

Reviews. Ask customers for reviews and reward them after they’ve received their order, and mention the referral program in the same email. You can even reward points for writing reviews to stack incentives

Brands That Grew Through Referral Programs

You don’t have to take our word for it. Some of the biggest names built their growth on referral programs.

Dropbox offered 500MB of free storage for every successful referral – for both the referrer and the friend. The result? 3,900% growth in 15 months. Signups jumped from 100,000 to 4 million users.

Airbnb gave both the referrer and referee travel credits. Their referral program generated millions in bookings and became a core part of their acquisition strategy.

Harry’s (razor brand) used a tiered referral system before their launch: refer 5 friends for free shaving cream, 10 for a free razor, 25 for a free premium set, 50 for a year of free blades. They collected 100,000 email signups in one week.

Different approaches, same principle: make it easy to share, make the reward worth it, reward both sides.

More examples in our referral program examples and ideas.

Common WooCommerce Referral Program Mistakes

Mistake 1: Setting rewards too low. A $2 discount on a $50 AOV store isn’t worth anyone’s effort. The reward should be 10–15% of your average order value.

Mistake 2: Only rewarding the referrer. One-sided programs consistently underperform two-sided ones. If the friend gets nothing, they have no extra incentive to actually buy. This is a pain point that directly kills conversion.

Mistake 3: Making the sharing process complicated. If customers need to navigate 4 pages to find their referral link, they won’t share it.

Mistake 6: Never updating the rewards. The same $10 discount for two years gets stale. Good program management means rotating rewards seasonally, running “double reward” events, and introducing tiered milestones to keep things fresh.

Final Words

In conclusion, setting up a WooCommerce referral program with the aid of the right software can streamline the valuable word-of-mouth endorsements.

As simple as it is effective, this approach underpins a sustainable cycle of customer engagement and acquisition that can be a turning point for any business.

Further Reading

• How to Measure Referral Program Success
• 7 Best WooCommerce Referral Plugins
• 5 Best WordPress Referral Plugins
• How to Create a WordPress Referral Program
• Loyalty vs Referral Programs — What’s the Difference

Frequently Asked Questions