How to Set Up Referral Tracking [+ Free Spreadsheet]

You’ve decided to launch a referral marketing program. Great!

The next step is to figure out how to keep track of the referrals your program brings in. Without any way to know where new customers are coming from — and which existing customers are referring your business — you won’t be able to properly issue rewards or know if your program is working. Setting up a referral tracking system from the get-go helps you run your program smoothly and determine if you’re getting the results you want.

In this article, we go over the referral tracking process and review the best methods to keep track of your program participants. Or, you can jump straight to downloading a free referral tracking spreadsheet that’s customizable for your own referral program. We also have a free referral link generator and if you just want to generate referral codes, look no further than our free referral code generator.

For a quick overview, check out our video:

What is referral tracking?

Referral tracking is the process of monitoring and collecting data on the referrals made through your referral program.

Tracking associates each program member (referrer) with the referrals they send, and tells you who to reward for each new, successful referral. It follows the progression of a new referral from awareness to purchase, and all activities in between.

You’ll need to track who signs up to your program, who they share with, and when each of their friends (referrals) becomes a qualified lead or new customer. 

The most important part of the tracking journey is the conversion, because it tells you when a referral becomes a lead or customer. It uniquely identifies who the referral is and who referred them.

What are referral trackers?

Referral trackers are unique identifiers that monitor a customer’s movements throughout the referral process, from the minute they sign up to when one of their referrals results in a sale (conversion).

Referral trackers are assigned as soon as a loyal customer, ambassador, influencer, or partner joins your referral program, whether you use a referral code or referral link.

What are the two types of referral tracking?

Tracking referrals can be done in two ways:

• Manually (through spreadsheets)
• Digitally (automated with referral tracking software)

The automated approach is more scalable and easy to keep track of as your referral program grows. It also gives you a better picture of your referral program’s ROI.

But when you’re starting out or testing out a referral campaign, you might want to try manual tracking first.

3 reasons to track referrals

When it comes to a referral program, the goal is to get as much of your existing customer base as possible involved in sharing, to cast a wide net. In turn, a portion of these customers will promote your brand to family and friends, and the number of referrals your business receives goes up.

After you launch a program, it’s important to keep track of which customers are sending referrals to your business. A reliable referral tracking system also gives you important referral metrics, including how many members have joined your program, how often they’re sharing, and how many referrals are converting into customers.

Here are the top reasons to track referrals:

1. To reward the people sending you referrals

The best referral programs offer incentives to encourage more sharing and get people to participate. If you want to know who exactly sent a new customer to your business — and promptly issue rewards to that referrer — you need accurate referral tracking in place.

By issuing referral rewards only for successful outcomes (i.e. true purchases and leads), automated referral tracking also helps prevent referral fraud. This way, you aren’t wasting money on rewarding self-referrals or people who aren’t sending you real referrals. 

2. To understand your program’s ROI

Without a referral tracking system in place, you won’t know how many new referral customers and brand awareness your program is driving. Tracking referrals allows you to quickly determine your program’s ROI, which lets you:

• See how many referrals, and how much revenue, your program brings in
• See how your program compares to other marketing channels
• Justify your marketing spend (program and reward costs, time and resources, etc.)

You’ll know how many referral shares actually result in new customers, and how long it takes each referral to interact with your business (i.e., click the referral link, sign up for a demo).

Based on your program performance data, you can determine if a referral marketing strategy is meeting your intended goals, or if you need to make some changes to increase customer engagement (e.g. try a double-sided reward structure, switch your referral rewards to cash or gift cards instead of discounts, start promoting your program more frequently and with different channels, or switch up the messaging and layout of your referral program page).

3. To find your best advocates (aka superfans)

Referral tracking shines light on the individuals sharing the most and bringing you the highest number of referrals — your best advocates. Identifying your best brand fans helps you strengthen and cultivate your relationship with them. Why not show them your appreciation with a special gift?

In short, referral tracking helps you find your best referral sources and biggest brand fans — a huge win for your business.

Now, let’s dive into the two main ways you can track referrals: manually and digitally. Below, we’ll go over how each type of tracking works, and ways you can implement each.

How manual referral tracking works

Manual tracking requires a person to directly manage the process. First, you need a system for managing the referrals so you can track who to give credit to and see when the new referral makes a purchase. The best way to do this manually is via a spreadsheet, such as our free Referral Tracker tool.

Next, you need a way to credit new referrals to the person referring them. The most common methods are referral codes, referral links, and referral forms. As referrals are submitted, you’ll add them to a spreadsheet. This way, you can look up and credit the person who referred them based on the code, link, or information submitted in the referral form (typically, the name or email address).

Referral tracking codes (or links) are unique to each referring member, and connect them to all their referrals and earned rewards.

Manual tracking is a great way to get started, especially if you only have a few people participating in your program.

Managing manual referral tracking

If you’re just exploring how to run a referral marketing program and aren’t quite ready to invest in a digital referral tracking tool, referral tracking spreadsheets are a good low-lift solution to manage your referral tracking.

Spreadsheet-based referral trackers are perfect for small businesses who don’t need a complex program, or are still testing out their first referral program and want to manually approve all referral payouts.

You can create a form on a Google Sheet or Excel. Or you can download our free referral tracking spreadsheet to start using right away (don’t worry — it comes with instructions!).

Note: If you decide to use this method, keep in mind that you will need to create your own unique referral ID for each of your referring customers. If you download our free referral tracking spreadsheet, we provide a form for you to send to customers to join your program. 

Free referral tracking spreadsheet + referral code generator

To help you get started with manual tracking, we created a free downloadable referral tracking spreadsheet (with sample names) in Airtable that can be easily customized for any referral program. (If you want to generate referral codes, look no further than our free referral code generator.)

Whether you’re already running a referral program for your business, or simply want to understand the scope of how the process works, we break down all the basic referral tracking steps.

The spreadsheet has four main tabs:

• Program Members: tracks people who have signed up to refer or promote your business
• Referral Sales: tracks the individuals someone refers to your business, who have completed a sale
• Reward Rules: lets you determine the values of rewards you’ll give program members
• Dashboard: Tracks total numbers of members, referrals, rewards earned, and rewards owed.

Whenever someone signs up for your program, you may also decide to assign them a unique referral code.  This version of our spreadsheet doesn’t generate referral codes, so you’ll need to use our referral code generator if you’d like to add them.

Get the spreadsheet >

Methods to track referrals manually

How to track referrals manually and send them to your spreadsheet? Here are some of the most common ways:

Referral codes

You could give your existing customers (“program members”) their own personal coupon codes, known as referral codes. Customers can then share these codes whenever they refer their family and friends to your business.

Referral codes are unique to the person sharing, so they attribute referrals back to the right program member and give them credit for each successful referral.

A new referral (new customer) will submit the code their friend gave them when making a purchase. New referrals either enter their code online with a form or checkout page, or give the code to a salesperson if making an offline purchase.

The code then attributes that referral to the existing customer who shared the code. Thanks to referral codes, you can see how many times a code has been used and which new customers came through a given member. Track this info with your spreadsheet and the form you direct referrals to.

Use our free referral code generator to make your own referral or coupon codes >

Referral links

Referral links are unique URLs that direct people to a form associated with the person sharing the link. Any referrals coming through that form are credited to the person sharing. 

A referral link gives you full control over what the potential new customer sees as soon as they arrive on your site. You can direct them to a dedicated page, where you highlight any products, services, or information that can better lead them to purchase.

Manually creating referral links can be done using your own website, where you create a unique URL for each referring customer. But be careful, as this requires you to change your domain settings and set up new links.

An easier way to build referral links is with Referral Rock’s Free Referral Link Generator. Our generator lets you easily set your link destination and add unique identifying information for each member. Then, track who uses referral links with our Referral Tracking Spreadsheet and the form you direct referrals to.

Referral forms

This is a direct form for submitting a referral. It includes fields for writing out both the person being referred and the person giving the referral.

Referral forms are also a good alternative to tracking cookies and are particularly useful for service-based businesses that require an extra step, such as setting an appointment or providing a quote, in order to complete the referral.

You’ll manage that data you collect via your referral form using your tracking spreadsheet. One way to do this is to use a simple form builder (like Google Forms) and sync it with your spreadsheet.

Then, using a Zapier integration, you can automatically add, track, and collect all customer and referral data into the same sheet.

Referral software is built to handle all your referral tracking automatically, even for the most complex programs.

Without getting too technical, referral software includes a tracker on the referral confirmation page (typically using a Javascript web pixel to set user attributes using browser cookies). A postback URL then passes back information about any conversion data. Finally, an API call sends the specific URL parameters associated with the customer to the referral tracking tool.

The best part about using referral tracking tools is that all these steps are done automatically — all you have to do is customize a few settings.

What to look for when choosing a referral tracking tool

When selecting a referral software, make sure it correctly:

• Captures referrals based on your form, checkout, or capture process
• Tracks sales activity, especially if there are multiple steps in your buying process (such as talking with a sales rep, getting a quote, or doing a free trial before making a purchase)
• Integrates with your system of record (whether that’s a CRM, billing system, email marketing tool, or something else), so tracking data is seamlessly passed through your sales and marketing processes
• Allows you to reward on the outcome you’re trying to drive (usually this is a new purchase vs. just collecting the referral’s information, but it can be anything you want)

Some referral software can only track basic metrics like shares, conversion rates, and referral revenue. But other options have the functionality to give you a more complete picture of your program’s impact, such as member (“referrer”) engagement and referral website visits generated by your program.

Ideally, the software you choose should also have a dashboard for your members to track the status of their referrals, so they’re more motivated to share and trust in the program.

Methods to track referrals digitally

Referral software credits new referrals to a given program member via referral links and tracking cookies. Let’s explore how each works in more detail.

Referral links

As we covered above, referral links are unique URLs that direct people to a website, and that contain information that attributes each referral to the person who sent them. But unlike the links created for manual tracking, automated referral links can send people to the same form or checkout page and properly credit the person referring. No need to create completely separate pages for each link!

Referral software automatically generates a unique referral link for every program member, with the parameters to track referrals already in place. No coding needed! Whenever someone makes a purchase (or becomes a qualified lead) via a referral link, the software registers that referral, and automatically pays out the referral rewards to the right person. This way, you’ll always know who sent the referral and when they earn the rewards.

Tracking cookies

Tracking cookies are used to automatically credit the referral to the person who referred them. They work by placing a first-party cookie on the user’s browser when they click a referral link, and then using a code snippet to pass the referral back to your referral management system.

But don’t let this scare you. If you use Referral Rock, our onboarding and integration specialists will help set this up with you and walk you through the entire process.

Cookies tie the referral back to the member who sent them. A tracking cookie is embedded into the browser and captures data about the referral’s on-site actions. Then, the information the cookie collects is sent back to your software via conversion tracking tags (more on how these work in the FAQ below). So even without requiring referrals to fill out a form, you’ll already be able to track certain information.

Redirecting referrals after completed forms

Sometimes, you may not be able to add additional scripts to your referral capture pages. In these cases, redirecting referred customers after they complete a form of their own is a good alternative.

A redirect basically takes information from the source URL and applies it to the resulting confirmation page. This allows you to send the referral to the most relevant landing page based on the information they shared.

This method generally works best for businesses that use third-party forms and need a way to send the individual back to their site.

Referral tracking FAQs

What is a conversion tracking tag?

A conversion tracking tag or script is a short bit of code added to a page signifying when a conversion has occurred.

A conversion can mean a number of things, depending on your business. For example, a conversion can be a demo or quote form submission, an online purchase, a newsletter sign-up, or any other on-site action.

A conversion tracking tag is usually placed in one of the following areas:

• A thank you page, after a successful form submission
• A confirmation page, after a successful e-commerce purchase
• A welcome page, after a successful user sign-up

As soon as these pages are loaded, a conversion tracking tag starts collecting information:

1. It checks if the visitor is a referral, by looking for the existence of a cookie
2. It creates a referral record and attributes it to the correct customer or ambassador
3. It adds any other information or parameters to the new referral record (i.e., the referral’s name, email address, purchase amount)

Should I automatically approve a referral?

With referral tracking software, you have the option to manually or automatically approve a referral after they’ve made a purchase or completed a form.

Automatic approvals will instantly approve every referral as soon as the conversion tracking event occurs (on a thank you page, confirmation page, etc.). Most businesses with a short sales process should use this option.

Manual approvals, on the other hand, can be time-consuming, but are useful when sales are not completed right away, or you require a waiting period before rewards can be redeemed (maybe based on your payment process or return policy).

What if someone is sent more than one referral link?

Sometime a person will get different links from more than one ambassador via email, text, or social media. Who gets the reward?

This is one of the benefits of referral tracking cookies. Thanks to cookies, the customer’s unique identifier (in the referral tracker or link) is saved and used to credit any rewards. Here are a few ways a tracking cookie can work:

• Last smart interaction (Recommended): Credit for the referral goes to the most recent customer whose link was clicked by the referral. For example, if a referral clicks on Customer A’s link first, and then clicks on Customer B’s link, then Customer B’s cookie will replace Customer A’s cookie. Customer B gets the reward.
• First interaction: Credit for the referral goes to the first customer whose link was clicked by the referral. For example, if a referral clicks on Customer A’s link first, and then clicks on Customer B’s link, then Customer A’s cookie will not be replaced (as long as it hasn’t expired). Customer A gets the reward.
• Last interaction: Cookies are always replaced by the referral’s latest link click, regardless of how many links the referral clicks. This reduces tracking accuracy and fraud detection, but can be useful if multiple referrals and customers are expected to use the same device, such as an in-store referral system.

What else can I do with a referral tracking system?

A referral tracking system can also sync with other marketing tools, allowing you to customize and expand your entire marketing campaign.

In Referral Rock, you can use One Click Access links to invite customers or affiliates to your program from email campaigns, during checkout, or other places in-app. These links give people a way to start sharing instantly — no logins or passwords needed!

What referral marketing metrics should I be tracking?

Every referral program has four key stages to evaluate and optimize. We call this the Referral Funnel.

The below diagram shows an example of how a typical referral program works. The top two stages are on the member (“referrer”) side — tracking how many customers join your program and how often they’re sharing. The bottom two stages are on the referral side, tracking how many referrals visit your website and turn into customers.

Let’s break this down even further. The four stages of the Referral Funnel are:

Without the right referral program software, it can be hard to track every stage of your program, but at minimum you want to track Joined Members and Referrals Added.

Joined Members allows you to give each customer (aka “promoter”) a unique referral code to share with friends. These are little bits of code inserted into every referral link assigned to people who join your program. Referrals Added lets you see new customers/sales that are coming from referrals (aka a successful referral).

Is referral tracking the same as affiliate tracking?

Affiliate tracking links are used in an affiliate program, where content creators promote your brand on their channels to earn commission. They work similarly to referral links in the way that they track purchases made through the link using a unique code.

However, affiliate tracking is still a bit different from referral tracking, since affiliate programs operate differently than referral programs, you’ll need affiliate marketing software for tracking. Some referral software (like Referral Rock) also has affiliate tracking capabilities, though, so you can run both referral and affiliate programs with the same software.

Start tracking your referral program today

As you can see, there are several ways you can track your referral program — we shared an easy-to-use free referral tracking spreadsheet (+ referral code generator) to help you get started.

But if you’re looking for a less manual way of doing things, use referral software to build an automated program that frees up the time. Referral Rock makes it easy to track referrals, manage rewards, and promote sharing across your customer lifecycle.

And it gives your members an easy way to track their own referrals, so they can see if and when they’ll be rewarded.

Want to see see how this type of program can work for your business? Book a demo or start building your program for free.