Referral Marketing

Online marketing is an essential part of promoting your brand and gaining leads. The modern-day consumer expects the brands they associate with to have a strong online presence. Social media is a day to day presence in many people’s lives. The younger generations especially, are engaged by Facebook, Instagram, Twitter, Pinterest and other social media platforms. There are many ways you can use these platforms to enhance your brand.  Some have their roots in the days long before the internet existed.  

In any town customers would go to stores, have a look, and tell their friends to check it out. That’s a referral. Referral marketing has its place online as it does on the street and is surprisingly effective. For smaller growing businesses, getting referrals is an important part of the marketing routine. It engenders social proof – you build up likes and thumbs-up on social media – and increases customer trust. How do you go about getting referrals? We’ll talk about that in a moment, but first let’s look at a few reasons why referral marketing is essential. 

The Benefits of Referral Marketing 

Word of mouth – the concept we mentioned above – remains in place online. Let’s face it, when you’re looking for a product or service you are likely to use one of the online referral solutions. You ask your friends and family, and those on your social media platforms, because you trust them. This is especially true where local services are required. If someone you know tells you ‘ABC Roofing’ are the people to go to for roof repairs, having used them, then you trust that referral. 

Research has shown that a single word of mouth referral may gain five times the sales as an online advert will do.  Once a recommend happens and it’s seen by others, then the ripples spread outwards.  More than 90% of consumers will trust referrals from friends, and they are four times more likely to use a service or buy a product that is recommended by someone they know. So, customers get what they want, and you add to your social proof standing. Let’s look at some ways in which you can boost your referrals and gain more leads. 

How to Get Referrals 

There are many ways to get more referrals.  Take some time to look at them closely. Sending every customer a request for referrals is not the way to go. It will take a lot of time and will net few results. However, sending one to some chosen customers will have the desired effect.  

Choose Your Loyal Customers 

There is a group of customers you should target if you are trying to increasing referrals. These are as follows: 

  • Long standing loyal customers 
  • Higher spending customers 
  • Frequent repeat customers 
  • Those who respond to new products first 

Each of the above rates you as a trusted supplier or service provider, so these are the people to start with.  They appreciate you already, they are also likely to be happy to refer you to friends and people they know.  So targeting them means your time is spent wisely. It is about developing relationships with those who use your service.  

Offer Incentives 

Some businesses are strangely averse to offering incentives for referrals. They see it as a bribe. This may be because asking for a good review in return for an incentive is frowned upon. A referral is different to a review. A referral actively asks others to participate, and there is nothing wrong in offering incentives. 

If you look around at online businesses, you’ll find many offer a discount for each referral, or perhaps a free order. This is where things get a little complex.  You must scale your business and the amount people spend with you to the incentive you offer. 

Some people want a thank-you, as that makes them feel wanted and valued. Others will be more likely to refer if there is something of value on offer. Cash rewards are popular, but how much do you offer? 

Consider if you are the customer: will you be swayed to refer your friends for a $10 reward? That’s not a lot of money, and people are busy. Would you be more persuaded by $25, or $50? These are more substantial rewards, but scaling what you can afford to each referral is important.  

Among the more successful referral offers that we have experienced is one offering ‘$50 for a meal on us’. There’s a clear incentive there and it’s not simply money. You can even automate your referral awards: once a referred customer completes a transaction, the referrer automatically gets the reward.  There are referral packages that you can download and install that make this easier for you to process, and they are worth considering.  

Get Your Program Seen 

Our final words are important, as there’s one mistake that many businesses make. That is making the referral program difficult to find. We’ve seen many websites where the referral program is hidden away and hard to find. This is inefficient but easy to rectify. Ensure your referral program is mentioned not just on the landing page, but also on the Contact Us, Home Page, and – perhaps most importantly – at the Checkout stage. This ensures your customers cannot miss the program and will be far more likely to pass on your name and link to others in their social media groups. 

Word of mouth has not died with the digital age.  It is more powerful now than at any prior point. Make sure you offer incentives you can afford, and that you target your loyal and trusted customers. Ensure your referral program is seen by all who visit your website. This is an essential marketing tool you will find surprisingly effective. 


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