How to Set Up the Referral/Sponsorship Program (Part 1)

The "Loyalty, Referral & Affiliate Program" module for PrestaShop allows you to set up a comprehensive referral/sponsorship program. This guide will walk you through configuring all the settings for the referral program using a fashion store, "Camellia Studio", and a customer named Marie as examples.

Set up the conditions for the Referral program

The "Conditions" tab is where you set the fundamental rules and requirements for your referral/sponsorship program. This is where you define who can participate, how they can join, and any limits on their activities as sponsors. By carefully configuring these options, you can ensure that your referral program aligns with your business goals and maintains a high quality of referrals.

Let's go through each option step-by-step to understand how to set up the conditions for the referral program.

• Enable referral/sponsorship program: This setting enables or disables the referral program. When enabled, customers can become sponsors and earn rewards when their friends create an account or purchase products on your website.

Example: At Camellia Studio, enabling this program allows customers like Marie to refer her friends and Marie will earn rewards when Marie’s friends shop or sign up.

• Applicable customer groups: Select which customer groups can participate in the referral program.

Example: Marie, a registered customer, belongs to the "Customer" group and is eligible to join the referral program.

• Require customers to submit an application to join the referral/sponsorship program: This option ensures that only interested customers can join the referral program. Admins need to approve applications.

Example: Marie needs to apply to become a sponsor. Once approved by the admin, she can start referring friends.

• Minimum order total required to become a sponsor: Set a minimum order total that a customer must have spent to become a sponsor.

Example: To ensure quality sponsors, Camellia Studio requires a minimum order total of $100. Since Marie has spent over $200, she qualifies to become a sponsor.

• Maximum number of friends that can be sponsored: Limit the number of friends a sponsor can refer. Leave blank for no limit.

Example: To control the growth of the referral tree, Camellia Studio sets a limit of 10 friends that Marie can sponsor. Starting with the 11th friend, they will not be counted in Marie's sponsorship system, and she will not receive any rewards from these additional friends.

• Allow sponsor to invite their friends via email: Enable sponsors to send email invitations to their friends directly from the front office.

Example: Marie can send email invitations to her friends encouraging them to create an account at Camellia Studio.

• Maximum number of invitations: Set a limit on the number of invitations a sponsor can send via email. Leave blank for no limit.

Example: Camellia Studio allows each sponsor to send up to 20 email invitations. Marie can invite 20 of her friends via email.

• Clear QR code cache: This option clears the cached QR codes used in the referral program to ensure up-to-date data.

Set up the reward for Referral/Sponsorship program

The "Reward settings" tab is where you define how sponsors will earn rewards when they generate new accounts or orders through their referrals. Configuring these settings appropriately ensures that your referral program is attractive to participants while maintaining your marketing budget.

Part 1: How to give rewards when new accounts are generated?

This section focuses on rewarding sponsors for successfully inviting new customers to register accounts on the website.

• Give reward to sponsors when their friends register a new account: Enables or disables the reward for sponsors when their friends create a new account. This encourages sponsors to invite more friends.
• How much do you pay for each new registration?: Defines the monetary reward given to sponsors for each new account registration.
• Only pay for X's first new registrations: Limits the number of new account registrations for which sponsors can receive rewards. Leaving this blank allows rewards for all new registrations.
• Only give reward to sponsor when their friend completes first order: Ensures that rewards are given only if the new account makes a purchase, validating the account's authenticity.

Example: Marie invites her friend Sophie to Camellia Studio. Sophie registers for an account but does not make a purchase immediately. Since the option "Only give reward to sponsor when their friend completes first order" is enabled, Marie does not receive a reward at the time of Sophie’s registration. However, when Sophie places her first order of $120 from the "Summer Dress" category, Marie earns a reward of $5 for Sophie's registration.

Part 2: How to give a reward when new orders are generated?

This section outlines how sponsors earn rewards from the orders placed by the friends they refer, supporting multi-level marketing.

• Give rewards to sponsors when their friends purchase products? (Multi-level marketing): Enables or disables rewards for sponsors when their referred friends make purchases, supporting multi-level reward distribution.
• Only give reward on orders of X first new friends: Limits the number of direct friends’ orders that can earn rewards. Leaving this blank allows rewards for all friends' orders.
• Only give reward for X first orders of each friend: Limits the number of initial orders from each friend that earn rewards for the sponsor. Leaving this blank allows rewards for all orders.
• Minimum order total of sponsor friends required to get reward: Sets a minimum order amount that friends must meet for sponsors to earn rewards, ensuring the program's profitability.

Example scenario: Let's illustrate how these settings work with a detailed example involving Camellia Studio, Sophie, and Marie.

Store settings:

• Give reward to sponsors when their friends purchase products? (Multi-level marketing): Yes
• Only give reward on orders of X first new friends: Limit 5 first new friends
• Only give reward for X first orders of each friend: Limit 3 first orders of each friend.
• Minimum order total of sponsor friends required to get reward: $100

Scenario:

Sophie is the first friend of Marie, so Marie will be eligible to receive a reward when Sophie purchases products. Sophie places 4 orders:

• The first order is $120, so Marie receives a reward.
• The second order is $85, which does not meet the $100 minimum, so Marie does not receive a reward.
• The third order is $150, so Marie earns a reward again.
• The fourth order is $200, it meets the $100 minimum, but it does not meet the “3 first orders of each friend”, so Marie does not receive a reward.

Part 3: How to calculate rewards for sponsors when their friends purchase products?

This section determines the calculation method for the rewards sponsors earn from their friends' purchases.

• Percentage of order total cost (shipping excluded): Specifies the percentage of the order's total cost (excluding shipping) to be given as a reward.
• Fixed amount for each order: Sets a fixed monetary reward for each order placed by referred friends.
• Sponsor cost (by order percentage): Limits the total reward cost as a percentage of the order total, ensuring marketing costs are controlled.
• Level 1: a% of initial sponsor cost: Sets the reward percentage for direct referrals.
• Enable multiple levels: Enables or disables multi-level reward distribution.
• Level 2: b% of remaining sponsor cost after paying for higher levels: Defines the reward percentage for second-level referrals.
• Lower levels: c% of remaining sponsor cost after paying for higher levels: Specifies the reward percentage for lower-level referrals.
• Add the rest sponsor cost (if have) to "Level 1" if no more levels are found: Decide whether any remaining sponsor cost should go to the direct sponsor if no more levels are applicable.

Example scenario: Let's illustrate how these settings work with a detailed example involving Camellia Studio, Sophie, Marie and Johny.

Store settings:

• Give rewards to sponsors when their friends purchase products? (Multi-level marketing): Yes
• Percentage of order total cost (shipping excluded): 10%
• Level 1: 10% of initial sponsor cost
• Level 2: 5% of remaining sponsor cost after paying for higher levels
• Level 3: 3% of remaining sponsor cost after paying for higher levels
• Add the rest sponsor cost (if have) to "Level 1" if no more levels are found: Yes

Scenario:

Sophie's order:

• Sophie places an order worth $200 (excluding shipping and taxes).
• Total reward amount: 10% of $200 = $20.
• Marie, as Sophie's direct sponsor, receives 100% of the reward amount ($20) = $20 (Marie is at Level 1).

Johny's order (referred by Sophie):

• Johny places an order worth $100 (excluding shipping and taxes).
• Total reward amount: 10% of $100 = $10.
• Sophie, as Johny’s direct sponsor, receives 100% of the reward amount ($10) = $10 (Sophie is at Level 1).
• Marie, as Sophie's sponsor, receives 50% of Johny's reward amount ($10) = $5 (Marie is at Level 2).
• Remaining reward amount: $10 - $5 (paid to Level 2) = $5.
• Since there are no more levels, this remaining $5 is added to Level 1 (Sophie) according to the setting "Add the rest sponsor cost (if have) to 'Level 1'".
• Therefore, Sophie receives an additional $5.

Summary:

• Sophie receives a total of $15 (including $10 from Johny and $5 from the remaining amount).
• Marie receives $20 from Sophie and $5 from Johny, totaling $25.