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9 Reasons Your Referral Programs Fail & How to Fix It

Referral programs can be super useful for bringing in new customers. But sometimes, setting them up and keeping them going can be a real headache. In this article, we’ll talk about the nine main issues businesses ...

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Referral Programs Fail

Referral programs can be super useful for bringing in new customers. But sometimes, setting them up and keeping them going can be a real headache.

In this article, we’ll talk about the nine main issues businesses face with referral referral marketing programs and share some simple tips to fix them.

Let’s dive in!

9 Common Reasons Make Your Referral Programs Fail

When done right, a well-developed program can bring in more of the right kind of leads fast. But it’s easy for things to go wrong.

9 reasons why referral programs sometimes flop are:

  • Setting unrealistic goals
  • Falling short of customer expectations
  • Unclear target audience
  • Unexciting incentives
  • Complicated referral process
  • Insufficient promotion
  • Excessive promotion of the referral program
  • Expecting instant success
  • Not using dedicated referral program software

Let’s break down each issue. We’ll also offer simple solutions for a single issue.

Your goals are unrealistic

Sometimes, businesses think starting a referral program will instantly get lots of people and new customers. But referral programs aren’t magic. They might be doing okay or just starting out, and owners might expect too much, thinking the program is failing when it’s not.


To fix this, businesses need to understand that referral programs don’t work overnight. They should set realistic goals and realize that success takes time. It’s crucial to keep an eye on how the program is doing regularly and not just expect instant results.

Owners and stakeholders should be educated about the process and be patient. By continuously improving the strategy based on feedback and data, businesses can increase the program’s effectiveness over time.

It’s also essential to celebrate any progress, no matter how small, to keep everyone motivated.

You don’t meet customers’ expectation

Sometimes, the problem is that you focus on your own goals or assumptions instead of listening to and understanding your customers. This can lead to a mismatch between what the brand offers and what current customers expect.


To meet customers’ expectations, brands should prioritize understanding their needs and preferences. This can be achieved through:

  • Conducting regular customer feedback surveys to gather insights.
  • Actively listening to customer complaints and suggestions.
  • Tailoring products or services to address specific customer pain points.
  • Providing clear and transparent communication about offerings and policies.
  • Continuously improving based on customer feedback and evolving market trends.

Don’t know who to target 

Brands sometimes struggle to figure out who to target in referral programs because you haven’t identified their best customers yet.

You might not know who’s most likely to refer others or a loyal customer to your brand. Without knowing this, it’s hard to decide who to reach out to for referrals.


First, figure out who your best customers are – the ones who really like what you offer. Then, split them into different groups based on things like age or what they like.

Also, give each group rewards that they’ll like, such as discounts or special deals. Tell them why they should refer their friends, and keep track of which groups bring in the most referrals.

That way, you can focus on the ones that work best. By targeting the right people with the right rewards, your referral program will be more successful.

Incentives are unimpressive

Many companies provide an ordinary referral incentive for referrals, which might not be enough for a happy customer to participate.

If the reward isn’t appealing or highly desirable, existing customers won’t feel motivated to recommend your business. They have other priorities besides promoting your brand! Small rewards often don’t grab people’s attention sufficiently to spur them into action.


When incentives aren’t exciting, businesses can make them more appealing by offering rewards that customers really want.

For instance, instead of just giving small discounts, they could offer something special like a free product or a VIP larger customer referral experience. This could be something like offering a free month of premium service, a gift card to a popular store, or a chance to win a vacation.

By providing incentives that customers find irresistible, businesses can motivate them to participate more eagerly in the referral program.

The referral process is too complicated

Often, businesses make referral plan processes easy for themselves, not for customers. But people are busy. If they can’t quickly understand how to refer someone to you, they’ll just give up and move on.

That’s why you need to prioritize simplicity and user experience friendliness in the referral signup process to ensure that customers can easily refer others without encountering unnecessary obstacles.

If your referral program feels like it’ll take too much time or effort, people won’t bother participating. Even if they like you or the reward, if it feels like work, they’ll skip it.

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For example:

Complicated referral links: Having too many steps can turn people off. While it’s good to have sharing links available, most won’t bother using them.

Social Sharing Buttons: People prefer one-click connections to their social media.

Messaging: Many back out because they don’t want to write a message about the program. So, offer pre-written messages they’d use. But if they want, let them write their own.

Unclear Branding: Too much or too little information can confuse or overwhelm customers, making them give up.


To make it super easy for customers, be ready to go the extra mile even if it means more work for you.

You can offer different referral methods so customers can pick what suits them best, such as:

  • Simplify information: Use bullet points and concise wording.
  • Consider a terms and conditions page for detailed info.
  • Enable opt-in for official referral program rules.
  • Ensure program branding matches your business for trust.

Lack of promotional campaign

If you only talk about your referral program once when you first start it, chances are people will forget about it. Even your own team might forget if you don’t remind them regularly.

Don’t be surprised if you’re not getting many referrals if you only mention it once and then never again.


To ensure your referral program stays top of mind and successful, you’ve got to talk about it—a lot!

Some effective ways to keep it fresh in people’s memories:

Keep Talking: Mention your referral program often in emails, on social media, and when chatting with customers.

Share Success Stories: Tell stories and a positive review about successful referrals to inspire others to join in.

Social Media Updates: Post your referral program regularly on social media. Use cool pictures to grab attention.

Talk in Person: Bring up the referral program during meetings or when talking to customers. Keep it fun and interesting.

Offer Rewards: Give bonuses to people who help promote the referral program. It encourages more participation.

Overuse referral program promotion

You might overuse referral program promotion because you think constantly reminding customers will get you more referrals. However, too much promotion can overwhelm them and make the program less special.


To avoid overdoing referral program promotion, you should:

  • Stick to a schedule for reminders.
  • Make each promotion memorable.
  • Use different ways to promote.
  • Share success stories but not too often.

For instance, if you send emails every month, include a short blurb about your referral program in each one. This keeps it fresh without being too pushy.

Expect a quick success

Many merchants might expect quick success with your referral program because you want to see immediate results, like a sudden surge in new customers. You may think that launching the program will instantly bring in a lot of referrals.

However, referral programs often take time to gain traction and for customers to start referring others. It’s important for you to understand that building a successful referral program requires patience and consistent effort over time.


To fix the idea that your referral program should bring quick results, set realistic goals and understand that it takes time.

Don’t expect instant success. Instead, keep promoting the program consistently and encourage referrals with rewards. Be patient and stay committed for the long haul. Good results come with time and effort.

Don’t use a referral program software

These days, using referral software is recommended because it eliminates the hassle of manually entering leads into a spreadsheet.

With referral software, everything is automated, from capturing leads to tracking their performance. You can see all this information neatly organized in a dashboard.


If you haven’t tried referral program software yet, give UpPromote a shot. It automatically captures leads using its Customer referral feature and tracks performance with an analytics dashboard, eliminating the need for manual data entry.

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With UpPromote, managing your referral program is hassle-free, giving you more time to focus on growing your business.

Last words 

Is your business making any of these 9 referral program mistakes? Try these solutions and watch your referral success soar. Remember, referrals are often the easiest leads to close and are crucial for business growth. Don’t overlook the importance of creating a top-notch referral program.

Ellie Tran, a seasoned SEO content writer with three years of experience in the eCommerce world. Being a part of the UpPromote team, Ellie wants to assist Shopify merchants in achieving success through useful content & actionable insights. Ellie's commitment to learning never stops; she's always eager to gain more knowledge about SEO and content marketing to create valuable content for users. When she's not working on content, Ellie enjoys baking and exploring new places.