What is Referral Code?

A referral code is a unique ID assigned to every person willing to participate in your refer-a-friend program. These codes can be customers’ names, alphanumeric characters, or even complete words that vary according to the referral software you are using. They are primarily used to recognize, follow, and calculate the impact your brand advocates create to offer them the rewards that they’ve received based on that data. These unique combinations of letters and/or numbers are used to recognize the participants in a customer referral program.

When customers join the program, the referral codes are immediately assigned to them. These unique codes are used for tracking and connecting each step of the process. Beginning from the time a customer sends a referral to the time they are used for making a purchase. They allocate the program rewards to the customer and referral automatically.


Referral codes make the complete process more efficient and easier for everyone involved. They automate everything and also track all the steps of your referral program. You don’t have to log every reward and participant manually. They assist referrals and existing customers to get their rewards easily. The reward is automatically sent to the customer by using the code when they buy anything for the first time. They give brand advocates and loyal customers an excellent experience so that they can continuously generate and spread word of mouth for your business.

Consider the following when creating referral codes:

  • You must keep the codes unique but short.
  • Most of the time, the O’s and Zeros confuse people a lot. Hence, it’s ok to avoid them.
  • The lowercase L’s (l) and upper case I’s confuse people too; avoid using them.
  • You should also let people create personalized and customized codes; it’s an excellent way to inculcate a sense of personalization.


You can create several referral codes by using an interactive referral program. However, it better to learn about creating referral programs that work. Imagine you have a mobile food delivery business. Let’s say many customers have started using your app because their friends and acquaintances have promoted it and told them how convenient and reasonable it is. You introduce a referral program and decide that you want to get more out of this. You promise one free meal to anyone who promises to bring you a new customer. You also give a free meal to referred customers with their first order. 

Free Food

Now, Mark is your customer, and she always orders food using your app. He mentioned your business to his colleagues, and now they are ready to try it. Mark goes to his account, copies his referral code, and sends a message to his colleague, Stan, telling him to use this referral code for the free meal. Stan downloads the app, orders himself a pizza, and uses Mark’s referral code at checkout. The software that handles your referral marketing program identifies Mark’s referral ID and adds free meals to both Stan’s first order and Mark’s next one. This is how it works and benefits your existing and new consumers.

How to use a Referral Code?

Since you are now familiar with how it works, let’s understand it in detail:

1. First, your customer is assigned a code 


First of all, the person who refers to your business in the future is assigned a code. Several brands give the same code to each and every referrer, but the organizations that want to reward individuals should keep track of referrals. Hence, they assign a unique code to a single individual. However, you should also provide a unique code to your referrers if you’re keen to give rewards on each referral. 

2. You must get those codes shared 

The second step is compelling your partners or customers to share their referral codes with prospective customers. However, you must decide on how you to share it with them. With the advent of cheap internet, sharing and communicating have become very easy. Your customers will be able to share their codes via social media posts, email, or texts, etc. However, if there are influencers involved in making referrals, you should have a code with their name in it. This will help them share their codes with their followers, and the followers will use the services or the products referred to them by their favorite influencer. 

3. You should gather the codes back and link them 

post referral code

Since you have circulated the codes nicely, you must now be prepared to get those codes back and link them to the individual that shared them in the first place. You can depend on cookies and links to track these codes if you have an online business. You can also make your own page, which can be used particularly for tracking these codes. However, there are thousands of referral marketing services offered online. You can purchase one and integrate it with your business. It will make the process of a referral manageable, smooth, and absolutely flawless.

Wrap Up 

You must have a referral program that offers valuable referral codes if you want to run a business successfully. Referral codes let you increase your consumer base and helps in the subtle marketing of your business to prospective customers. They make sure that you reward every hard-working and commendable referrer without any inaccuracy, thus increasing brand loyalty as well.