How to know you're ready for Referral Marketing

It’s no secret that word of mouth marketing and customer referrals are some of the strongest and most valued growth channels. There’s no substitution for real human connection, a friend’s recommendation, or even a referral from an industry leader. Despite consumers purchasing most things for themselves or people they love, many consumers seek assurance from others before making a decision.

So, what is referral marketing?

Referral marketing is a method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously, but businesses can influence this through appropriate strategies.

Referral Marketing is Great For:

  • Organic boost in sales and traffic
  • More natural engagement with new customers
  • Increasing brand trust
  • Engaging your existing community of customers

In short, when done correctly, referral marketing allows companies to understand their customers better, reward people for successfully promoting their brand, and create more organic resonance with new customers.

Referral marketing is ideal for businesses looking to boost their sales without relying on a high-budget marketing campaign. However, referral marketing does require a little bit of work before it gets going. Not sure if your business is ready?

Here are a few ways to see if you are

Referral Marketing Requires:

A clear goal: what are you looking to achieve from your referral marketing program? For some companies, choosing where to focus their referrals can be the most important step. Are you looking to drive more signups, more sales, more sales of an individual product, etc.?

A defined target: finding new audiences is great, but honing in your referral program to include your best customers and first followers can be even greater. Making sure your referral program attracts the right people will make their jobs easier, and ensure that your referrals make a significant impact on your sales.

A good reward: some of the best referrals come from your customers. Find ways to entice them and reward them for sending new customers your way. Luckily for you, many customers aren’t as monetarily driven as professional affiliates, advocates, or resellers - which makes them not only more affordable but also more community oriented.

A solid community: many referrers recommend products because they love the product themselves and want to align themselves with a company they admire. As a company, it’s important to build strong relationships with your customers, so they want to promote you. Working to build a community or develop ways to include your customers into your product are ideal ways to get more from your referrers and build a stronger brand.

A hit of dopamine: everyone wants to feel appreciated and wants to feel included. Find ways to engage your referrers and customers that make them feel special and part of your team. Building milestone emails, sending congratulatory messages, or even manually reaching out can make a huge difference in increasing engagement - it might even make your referrer’s day.

Know where to start: some companies find success simply by launching a referral program, some start with their customers. Figure out what method works best for you. Try starting by inviting previous customers to refer their friends, then move on to promoting your program or offering incentives to people outside of your network.

We all know marketing can be expensive and time-consuming. Referral marketing helps combat this. In fact, referrals not only offer an affordable, community-oriented, and efficient form of marketing but they force marketers to remain customer-focused as well. In its simplest form, referral marketing multiplies the value each new customer brings to your company. Whether they refer one or ten friends - you’ll soon be able to realize the how quickly word will spread.

In addition to its cost effectiveness, referral marketing works because people are inherently more likely to listen to product recommendations from friends over other sources. Moreover, people trust these recommendations more than any other source of information - making the sale conversion much easier and more organic.

Still on the fence? Referral marketing has been a go-to solution for many startups with a limited marketing budget. For example, companies like Etsy (a peer-to-peer e-commerce website) attributes 90% of its growth from word of mouth. With the proper platform and focus, you too, can not only capitalize on referrals but also track them.

83% of satisfied customers are willing to refer a product or service, but only 29% actually do. Imagine if you were to tap into that 83 %, offer them a proper reward, and thank them for helping you grow. You’d be surprised how far a little engagement, dopamine, and reward can go.

So what are you waiting for?


Ready to start your own referral marketing campaign, launch your program for free - today.

Need a little time or have any questions? Shoot us a message - we’d love to help you decide what type of program fits your company’s unique needs.


Emily Lonetto

Emily Lonetto

Growth & Marketing @ GrowSumo