Most referral programmes are launched in an afternoon and quietly abandoned in a month. The block goes on the site, the reward is set to something round, nobody shares anything, and the conclusion is that referrals do not work for this store. They usually do - the launch was just missing three quarters of the work. This is the sequence that produces actual referred buyers, in the order it needs to happen.
Step One: Decide What You Are Paying For
Before you touch any settings, settle one question: are you rewarding a signup, or a purchase? They are different products. Rewarding the signup fills your member list quickly and cheaply, which is useful if your programme is new and thin. Rewarding the first purchase costs more per event but every event is revenue, and it never pays out to a friend who joined for the coupon and vanished. MYLO lets you switch on either event or both, with its own reward on each side of the pair, so the honest answer for most stores is: both, with the signup reward small and the purchase reward the one worth chasing.
Then set the two rewards asymmetrically, because the two sides are doing different jobs. The friend's reward has to overcome the awkwardness of buying from a store they have never used - so make it immediate and unconditional, a welcome-level coupon or a points balance waiting on arrival. The referrer's reward has to be worth the small social risk of putting their name on a recommendation. Points are usually the better instrument there, because they only convert into cost when the referrer comes back to spend them, and a referrer who returns to redeem is the outcome you wanted anyway.
A referral programme is not a discount you hand to strangers. It is a commission you pay a customer for doing the one thing no ad can do.
Step Two: Put the Link Where the Goodwill Is
Goodwill has a short half-life, and it peaks at two moments: right after someone joins the club, and right after an order arrives. A referral page buried in a menu catches neither. Put the personal link in the loyalty popup where the member already checks their balance, and in their Shopify account alongside their orders, with WhatsApp, SMS, email, QR and social share buttons attached so sharing is one tap rather than a copy-paste job. The block has its own design settings so it can look like it belongs to your store. What you are removing is not doubt about the reward - it is the twenty seconds of effort that kills most good intentions.
Revenue contribution by loyalty mechanic, compounding over 12 months.
Step Three: The Settings That Decide Whether It Works
- The attribution window - how many days after clicking the link a signup or purchase still counts, thirty by default. Too short and you lose the friend who clicked on a Tuesday and bought at the weekend; too long and you start paying for orders the referral had nothing to do with.
- The minimum order value - set on the purchase event, this stops a referral reward from being triggered by a deliberately tiny first order, which is the single most common way a referral programme gets gamed.
- The referrer notification - an email when the friend joins and another when the friend first buys. It sounds like a courtesy and it is actually the engine: a referrer who sees that their link worked refers again, and one who hears nothing assumes it did not.
Two mechanics run underneath that you do not have to configure but should know about. Attribution is stamped onto the order itself, so a purchase still attributes even when the friend used an express checkout button that skips the cart entirely - a common silent failure in referral tracking. And a referral is only ever credited to someone who is a member, with a guest's earlier orders handled by retroactive points instead, so the same order never pays out twice under two different programmes.
Step Four: Read the Funnel, Not the Total
A month in, the number to look at is not how many referrals happened. Open the referral analytics and read the funnel: links shared, clicks, signups, purchases. Each drop-off has a different fix. Few shares means the link is not where the goodwill is, or the referrer reward is not worth the ask. Clicks but no signups means the landing experience is asking too much, or the friend's reward is invisible until after they commit. Signups but no purchases means you rewarded the wrong event and should put the weight on the purchase side. The top referrers list is worth reading by name, too - a handful of members usually generate most of the volume, and they are the people to talk to directly.
The referrals page shows every referral and its status as it moves from pending to active to expired, which makes the whole thing auditable when a member asks where their reward went. Give the programme a full quarter before you judge it. Referrals are the slowest lever to start and the only one that gets cheaper as it grows, because each referred customer is themselves a potential referrer. That is the compounding you are actually buying - not this month's signups, but a channel that widens on its own while your ad costs do not.