What is a Customer Referral Program?
A Customer Referral program holds a great deal of promise for businesses. Customers receive incentives for
referring someone they know to your brand. Discounts, credit, gifts, cash, gift cards, free subscriptions, and
donations for future purchases are some eye candy offers that allure customers to invite someone from their
immediate contact to your marketing program.
This way, they supplement the business with someone they know, resulting in tangible benefits for your
business. Moreover, these referees are the ones you can trust, and they can be stalwarts for your business in
the long run.
You can handpick these referrals from your existing customer list, influencer list, business advocates,
marketing partnerships, vendor list, or based on existing customer recommendations. They can consequently
become your next brand advocates. You can scale your businesses in no time by utilizing the glowing reviews
and recommendations of the chunk of these satisfied referrals.
In other words, customer referrals are becoming the quintessence of Marketing Business in spreading
awareness and encouraging purchasing decisions.
It is exactly like word of mouth marketing, where the main aim is to generate targeted, high-quality leads
directly to your business. To make the most out of the customer referrals, you need to strengthen your
existing relationship with your present customers so that they get more engaged with your brand and spread the
right word about your brand to people in their close network.
Marketing campaigns today promote products and brands through various channels like pop-ups, promotional
emails, social media notifications, and banners. Imagine you want to invest in a new gadget (say, a brand-new
laptop). Despite knowing what you want, you get disoriented by seeing the battery of options that are up for
grabs on these channels. Each claims to have superior features and specifications.
So, if you are in a flux of which product or which brand to rely on for making a purchase, then in this case,
online reviews and social media posts of your friends and family members, or word-of-mouth marketing will help
you in decision-making to come to a conclusion about which product or brand is best and eventually turning
down other irrelevant offers.
In real-life scenarios, the same thing holds good for most occasions when people are too ready to believe
their family and friends' recommendations and compelling storylines rather than ad campaigns or your company’s
It is when Referral Marketing comes into the picture.
Referral marketing can boost growth for your business by enabling your best customers to promote your brand
and spreading your brand awareness far and wide.
Accordingly, they refer your offerings to people in their social circles and make themselves and their
referees earn rewards.
Thus, with online social media marketing and word-of-mouth marketing, your customers make enough noise about
your brand in their social circles.
So, let's see why these customer referrals are vital for your businesses.
- 92% of customers trust the recommendations of family or friends over advertising
- Referred customers have a 16% higher LTV (lifetime value) than non-referred customers.
- B2B companies that utilize customer referrals see a 70% higher conversion rate.
- Friends’ social media posts sway the purchasing decisions of 83% of US online shoppers.
- The likelihood of a new customer buying a product is four times higher when referred by a friend.
The above clearly outlines the importance of Customer Referrals for businesses.
What are the benefits of a customer referral program for businesses?
Aggrandizing Sales: If a customer shares online reviews with a handful of friends and family
members, this triggers a chain reaction. These friends and family spread the word through their networks,
leading to a swelling up of sales and broadening your horizon.
Cost Effective: Unlike traditional advertising, the referrals advertise your products to others in
their close network without demanding any charges from your side. These customers are the ones with whom
you already have a positive relationship, and you need not invest further in bettering your relationships
with them. Hence, with their admission, they promote your offerings. It increases CLV and decreases CAC.
The amount of up-front investment needed to start your campaign afresh is relatively higher than targeting
these referrals who are already in the know of your business.
Increase engagement levels: When you incentivize your referrals and their referees with discounts,
store credits, and free products, this boosts their morale, and they keep referring your brand to other
people in their close association. It improves engagement levels for your offerings, giving referred
customers a reason to return and fostering a mutually beneficial relationship.
Fewer Complications and Time-Saving Activity: The word-of-mouth referral process is convenient and
time-saving compared to traditional advertising methods. It makes the referral process a crucial factor
for your burgeoning businesses
Establishing Loyalty: When a customer refers to someone, it directly implies that they are loyal
to your brand and are, therefore, eligible to receive any incentives. Luring these segments of referrals
with incentives motivates them to hire the best recruit for your organization with higher retention rates.
A referral program with clearly stated rewards for your referrals strengthens trust with them, and
eventually, they get driven into a buying and hiring spree.
Value for Money: This mode of marketing is a bang for the buck and trumps conventional forms of
marketing, almost four times or eighteen times the cost. Compared to acquiring a new customer, referred
customers spend more.
Quicker Onboarding: Customers hired through a referral program tend to onboard quicker.
a referral program is crucial to your business.
Better Quality of Leads: These referred customers are selective about what they need to buy and
readily act upon one final recommendation of their family members, friends, or influencers. They are your
repeat customers with a continued level of engagement. These customers further spend more and more on your
products and become the talking point for your brand.
Easily trackable Performance Metrics: Each step of a customer referral program is trackable,
whereby leads and sales are measured with solid referral systems.
How does a customer referral program work?
By Reviewing your Services and Products: Dissecting your work in terms of the quality and value of
your offerings is at the core of any referral program. If you offer cheesy products, your business will be
a washout. Hence, you must sell the choicest of products to your customers to receive rave reviews of your
By Prioritizing your customers: Any customer referral program works on a single-point agenda, and
that is winning the trust and loyalty of its customers. Companies can pull off if they keep the customer's
interests on top of their minds and do all the math right for them by aligning their actions with their
interest levels. These customers can eventually become brand advocates and refer their friends and family
to your business.
These referees then check the referral links and your website's landing pages to make a purchase. They
will also become the future exponents of your brand by spreading the good word about your brand to their
family and friends. Thus, it results in a chain reaction. This chain reaction of a customer referral
program will drive your business forward and become an integral part of it.
By leveraging high-end referral software: This streamlines the creation and management of referral
marketing campaigns for your businesses.
Software with robust integration and analytics abilities measures the performance of your referral
program by trackable metrics, and you can fine-tune it to meet the desired goals of your businesses.In
addition, this software makes enrolling, tracking, rewarding, and managing referring customers,
affiliates, influencers, and partners a breeze.
How to launch your Referral Program?
By establishing a roadmap for your Referral Program: It is vital to have a well-crafted plan that
should portray what and how much you aim to achieve from your referral program. Using KPIs and
well-rounded referral tracking platforms helps you work your way up to achieving goals and success.
By avoiding Grey Areas in your Referral Program Message: It is essential that you clearly outline
the referral program guidelines. It includes the terms and conditions of the referral program and the
message along with the Call-To-Action to communicate to your referrals and their friends and family
members before they partake in your program. You can then dole out your referral program messaging via
social media platforms, email templates, a
partner’s blog, or influencer channels.
The referral process must be convenient for the referrer and referee, from the initial step of inviting
referees to reward them. It will benefit you as there will be more sharing and hiring when everyone is on
the same page. It will avoid any ambiguities that can act as a roadblock to faster signups.Thus, by
avoiding grey areas, the customer referral program proceeds smoothly and becomes a gateway to
the success of your business.
By catching the eye of customers: Come up with splashy headlines about your program to lure the
interest of your audience. As an example:
- Refer a friend and get $75.
- Share and get a 50% discount.
- Spread the message and get a free iPhone.
- For every three friends referred, we will donate $40 to [XXX].
You may send personalized emails and social media posts to your customers asking for referees, add
referral request forms to your website’s checkout process, create banners and landing pages that invite
participation from customers to become referrals for your brand, and come up with a two-sided reward
scheme for your referrals and referees. By rewarding them, you make sure that they will keep coming back
By working on your social outreach: Strengthening relationships with your existing customers and
vendors and forging new relationships with other kindred businesses will steer the growth of your business
in the right direction.
Sending anniversary, holiday, and birthday cards, a thank you note for their positive reviews, or sending
out newsletters to them will further bolster your relationship with your clients.
Your social media marketing ensures to include referral program links to your Twitter, LinkedIn,
Instagram, Pinterest, Facebook, and other channels. It will amplify the visibility of your referral
Also, do not forget to ask your new referees about the platform from which they have come to know about
you. Is it through direct referrals or indirect referrals? Accordingly, you can channel your marketing
efforts towards the most apt platform.
Reminding your clients about your program: It is vital to make your clients well-informed about
your referral program.
Top Tips or best practices for boosting your Referral Marketing Campaigns
A Referral Program must encourage the active participation of its customers: You can better wire
these delighted customers who are happy with your services to participate in referral programs. Offering
discounts or upgrades for their ongoing subscription or reducing service fees will nudge them to hire
new referees for your program.
Hence, you can incite them into action by droolworthy incentives like offering flat rates in exchange
for a referee or rewarding them by making them compete with each other through contests that can make
them play on the front foot.
Other incentives like mystery gift rewards, store credits, charity donations, seasonal referral offers,
stackable rewards, exclusive memberships to clubs, and additional perks drive customers toward the
Handing out referral cards with clearly stated offer details to referrals will also drive them into
These days there is a rollout of a lot of mobile apps, and these Referral Apps are proving to be honey
trappers for all walks of generations.
To be more precise, these referral apps will make the referral program run its course for business
Preventing the Trappings of Referral Frauds: A close watch on IP addresses, keeping a tab on
suspicious email addresses, and limiting customers from using referral codes prevent the trappings of
Making Social Sharing Easy: A user-friendly and customizable user interface with easy navigation
and sharing mechanism helps customers to make all the right noises. For referrals to quickly and easily
share the referral submission forms with others, make sure that
form should display right on top of your website, and make it digestible and bite-sized.
Empathize with your existing customers: It is important to get personalized with your customers
and know their pain points or desires for efficiently targeting them. These chatty discussions will
propel them to pull up your sales funnel.
Online Webinars: a learning cum profit-making initiative where customers learn from webinars,
and if they like them, they refer the program to others.
Why choose Offer18 to track the performance of the Affiliate Referral Program?
Offer18 helps businesses track, measure, and analyze the performance of their referral program. With its
automated software, you can direct all attention toward referral information like the count of referees
received, revenue generated by each referral, the geographical location of referrals, and identifying
marketing channels that tracked them.
A referral tracking system of Offer18 maintains positive customer relationships by allowing businesses to
measure customer satisfaction, gauge customer behavior, and refer new customers to existing partners.
Another draw of this software is to measure the performance of referrals across different channels and
single out the most effective referral sources leading to better lead conversion opportunities. It helps to
discern your target audience as well.
This software helps businesses in decision-making, especially when it comes to budgeting and devising
marketing strategies, and it is cost-effective in the long run.
In all fairness, Offer18 provides a world-class fully-customizable referral marketing solution with
features like conversions, payouts, fraud detection capability, campaign automation, etc.
An easy-to-integrate referral software helps to scale business to new heights and acquire new customers.
Offer18 software sets up customer rewards and incentives and automates the payout process. It includes
ancillary features like personalized discounts, bonus rewards for its referrals and
Offer18 tracks the performance of the Affiliate Referral Program and makes sure that the referral
program remains at the forefront of its business operation.
A successful referral program is the fulcrum of your overall marketing strategy. By using astute
marketing techniques, you can have a community of friends and family members join your business, and this
will help your business take off.
It, therefore, becomes consequential to incentivize this army of customers, affiliates, or influencers who
refer new customers to your business, as that can lead to increased customer lifetime value.
Nurturing a relationship with your existing customer enables them to become a long-term brand advocate for
your brand, and it costs you no moolah.
You can also put your referrals on autopilot by choosing the right software.
These days software comes with the added bite of a comprehensive fix to your problems. This potent software
tracks each stage of the referral process, creates attractive referral programs and monitors customer
Last, but not least, remember to follow each of the core principles mentioned in this blog to guide your