Referral Tracking – Why You Need It and How It Boosts Referral Marketing Performance

Referral marketing is the most effective marketing. But many providers still consider this type of marketing as a stroke of luck. Little did they know they could get the best affiliate training online to learn the secret to a successful referral marketing program.

In this article, we are going to show you why you need to track your referrals and other tips to improve your marketing performance of your referral. Referral system is the most successful form of advertising. In fact, recommendations are the most natural and successful advertising.

They do not generate pressure, but suction. Customers who come for recommendations have already been convinced. Service providers – especially banks and insurance companies – who consistently work with referral marketing are recording the highest sales growth in the industry.

However, everything doesn’t matter unless you track the referral properly. 

Why Should you Track Referrals?

Whether you are using new or old system to track who is referring you and your business, it is essential to track the referral source properly. Establishing referral tracking system can supply you with more information for better decision to increase your referral campaign growth. Here is why:

#1 Gauge customer satisfaction

Yes, if you track the referral properly, you can understand how satisfied your customer is. There are few metrics that is capable to describe this further, such as: Net Promoter Score, Customer Satisfaction Score, and Customer effort score. We will show you later how to calculate these metrics in this post. So, keep reading!

#2 Keep track of the referral share rate

You will understand who refers to you the most and from where your market domination is located. Furthermore, you will discover how effective your referral marketing is by discovering its share rate and referral rate. 

For example, someone share his referral code to people online 100 times. However, only 1 of them join as a referral. Therefore, the referral rate in this case is 1%.

#3 Track conversion rate

Conversion is pretty much the same as referral rate. However, in conversion rate, you also track which one only do FREE sign up to an offer, and which one is actually purchasing the product, and finally, how many of them becomes your repeat customer.

Conversion rate is something every business need to track. Even the offline business of a physical shops or restaurant are tracking it. BY tracking the conversion, you can then optimize and adjust your marketing strategy. 

#4 Track referrals to help create a referral program model

There must be some factors that you can use to push your referral marketing. One of them is discount code. I mean, who doesn’t love discount? However, this is just a tip of the iceberg. 

There are many ways you can boost your referrals who help you promote the business. And for that, you have to study the market yourself. Examine what people expect from your product/service and why people are interested to be the next referral.

How to Track Customer Satisfaction in Your Referral Business

As we’ve mentioned above, there are three metrics you can analyze to track your customer satisfaction to boost your referral marketing. There are Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer effort score (CES)

Let’s discuss each one of them!

Net Promoter Score (NPS)

It is a measure that provides clues to a company’s success and customer satisfaction. With a simple, standardized customer survey, a rating and feedback from customers or users is obtained, from which a cross-company comparable measured value should be calculated. The Net Promoter Score system was developed by Fred Reichheld, author and business strategist at Bain & Company, and Satmetrix Systems.

The NPS aims to provide companies with easy feedback and data on the satisfaction of their customers, and to derive further indicators of their work from this data. Since the survey and the answer options are standardized, the score enables comparability with other companies. The Net Promoter Score is mainly used as a method in online marketing.

To determine the Net Promoter Score, companies ask their customers about their willingness to recommend the provider. Respondents can express their satisfaction from 0 (very unlikely) to 10 (very likely). To answer the survey answers, a single question is asked which, if necessary, is supplemented by an open answer field in which customers can provide written feedback.

Based on the answers, a key figure – the so-called Net Promoter Score – is finally calculated, which should give the company an indication of customer loyalty and satisfaction.

How the Net Promoter Survey works

To determine the Net Promoter Score, a simple survey – for example by e-mail – is sent to (a representative group of) customers or users. The survey includes the question: “With what probability would you recommend this company to friends or colleagues?” As an answer, the respondent has values from 0 to 10 on a numerical scale. The higher the number a customer chooses, the greater the likelihood that he will recommend the company.

After the user has rated the company on the scale, he can provide additional feedback. The information and feedback from the customer are transmitted to the company, who can finally evaluate the survey results (using a tool) and calculate the Net Promoter Score. The participants are usually not anonymized, so they can be clearly assigned to their answers.

How to calculate the Net Promoter Score

 In order to calculate from the answers of the participants the score, which reaches the enterprise in the Net Promoter Score (NPS), the number scale is divided into three stages:

 Respondents who give 9 or 10 points are among the promoters who would find a company very positive and recommend it.

Respondents who score 7 or 8 points are considered neutral towards the company. They are regarded as so-called passive or indifferent, which would not recommend the provider, but also its reputation would not harm by negative reviews. Accordingly, they are neglected in the calculation of the Net Promoter Score.

Respondents who award 0 to 6 points are so-called detractors. They are critical of the company and express this criticism. For example, they may warn other users or potential customers not to use a company’s service or products or publish bad reviews. 


A survey shows that 65 percent of the participants are promoters, so awarded 9 or 10 points. 20 percent award 7 or 8 points and are therefore not considered as passive in the calculation. 15 percent of the respondents are classified as not satisfied (detractors) with 0 to 6 points.

Now, you must reduce the percentage number of satisfied customers with those who are not satisfied

65-15 = 50

So, the net promoter score for this company is therefore 50.

Purpose and Benefits of the Net Promoter Score 

Determining a measure such as the Net Promoter Score may be useful to get a first impression of customer satisfaction. Such a survey easily focuses on the customer’s perspective and thus provides important feedback. A company is so encouraged to consider other points of view, encounters unknown problems and can better assess their own strengths and weaknesses.

The number of participants is comparatively high in such a simple and fast to implement procedure as the Net Promoter Score. Many positive and negative opinions can be perceived quickly and easily, and positive and negative customers can be identified. Once recognized, critics may be retuned and promoters positively exploited.

Especially with important influencers it can be worthwhile to get in contact with them and to enter into a dialogue. In addition, the Net Promoter Score aims to make companies comparable by means of the standardized question and answer scheme. Companies can draw important conclusions about where they stand in the marketplace.

Also, studies are trying in this way to map the competition between enterprises in individual sectors.

Customer Satisfaction Score (CSAT)

The CSAT is measured from a survey that usually consists of a single question or (less frequently) by several. The question may be:

“How do you rate the shopping experience?”

The customer can answer it by providing a value within a scale. It can range between 1 and 3, 1 and 5, and even in some cases from 1 to 10, although it is true that opting for the scales with the highest number of values is not Always the most recommended.

After that, you divide the customer who is satisfied to all customers you have. If we use previous example. That means

65/100 x 100% = 65%

Therefore, the score of CSAT is 65% satisfied.

The Customer Effort Score (CES)

It is a type of customer satisfaction survey that measures how easy or helpful of an experience with a brand. It can be a simple survey that asks the client how difficult it was to achieve what they wanted during their most recent interaction. This does not necessarily have to be a purchase.

It may be to find the product or service on your website, contact information, or shipping and return policy. Whether it’s an interaction with a customer service representative or a chatbot, it’s important to evaluate the ease with which customers can complete tasks, ask for help or give their opinion about your website. A Voice of Customer solution allows you to build surveys to ask the right questions at the right time and act to maximize the ease of completing tasks for your users.

CES using simpler formula than other metrics. In CES, you only need to know how is your customer react to your referral marketing effort

The CSAT serves to determine customer satisfaction, the NPS is for loyalty, the CES is to measure the effort in the interaction with the company. This set of KPIs complement each other: less effort increases the degree of satisfaction and in turn greater satisfaction implies more loyalty. Thus, it can also be concluded that the CSAT alone is not enough to obtain relevant information about how customers evaluate the performance of the company.

For this, it is recommended to combine the different indexes. In this way, it is possible to adapt the customer journey, the purchasing process or the offer itself in the most efficient way possible to the consumers and get new customers to become regular customers.

How These Tracking Help You Boost the Referral Marketing Performance

The company’s success depends on the recommendations of the customers. The fact that consumers are more willing to test other products of a company, if they were very satisfied with one, have been confirmed by studies. Customer-oriented companies have been able to obtain a sales price up to 10 percent higher, according to various studies.

If you want to be recommended, you should increase your customer satisfaction. The word referral marketing is relatively new, but in early times, the term word of mouth was used instead. Although the basic idea is certainly as old as us humans.

After all, it is basically something that is especially good for someone, so it is advisable to actively recommend it to others. This urge to pass on something positive to its close environment is being actively used and further developed today as an instrument for acquiring new customers from more and more companies. 

The prerequisite for functioning recommendation marketing, however, is that the customer is at least satisfied with the services of the provider. So far, successful referral marketing will not work without appropriate long-term customer care. Referral marketing has been one of the most effective marketing strategies for nearly a century.

With the growth of the social networks, the strategy, which is one of the oldest forms of marketing in the world, is again becoming more important. This strategy, which is considered to be one of the most upright and serious forms of advertising, has a very positive reputation. As we have said above, recommendations are the most natural and successful advertising.

They do not generate pressure, but suction. Customers who come for recommendations have already been convinced. 

Do you know other methods to track how people refer to your business? Let us know in the comment below!

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