What’s the word on referral marketing? How to create a referral marketing strategy

What’s the word on referral marketing? How to create a referral marketing strategy 

Referral Marketing Strategy

We’re living in a world where advocacy is everything.

Let’s look at the numbers, shall we?


  • Companies with a referral program close deals faster than those without.


  • The lifetime value of a new referral customer is 16% higher than a non-referral client.


  • 92% of respondents trust recommendations from people they know.


It’s no wonder that every organisation — from sensational startups to worldwide enterprises wants to know how they can snag more customer referrals. The only problem is, asking for referrals can be complicated. After all, you don’t want to come across as annoying, or desperate.

The good news is that your customers are happy to advocate on your behalf. According to one study, 83% of satisfied customers say that they’d be happy to refer a company to friends, industry peers, and colleagues. The only problem is — only 29% of those customers make that referral.

So, what gives?

For most brands, the problem is a lack of referral marketing strategy. If you don’t have the right plan in place to cultivate your ambassadors and ask them to share content on your behalf, then their powerful messages go unheard and unseen. A referral marketing plan is the key to capitalising on the undeniable power of word-of-mouth marketing.

Whether you’re reaching out for the support of a professional referral marketing company, or you’re going it alone, the following guide will give you the support you need to launch the best referral marketing ideas, leverage your loyal customers, and power-up your profits.

Referral Marketing Strategy

What is referral marketing? The benefits of a referral marketing plan


Let’s start with the basics of referral marketing.

Over 2.4 million conversations related to brands take place in the US every day. This means that people really aren’t shy anymore when it comes to talking about company experiences. All you need to do is figure out how to leverage that chatter for your brand.

If you can sway the conversations your customers are having in your favour, then you can benefit from:

1. Precision-targeted sales


If you’ve struggled to get the right audience onto your landing pages in the past, then referral marketing could be the key to your success. After all, about 14% of the customers that visit your referral page will actually convert, which is a much higher rate than most digital marketing strategies have to offer.

With a referral marketing strategy, you can make sure your message gets out to the people in your user persona list, who are most tempted to work with your brand. These are people in the right demographics, the right location, and the right stage of the buyer journey.

2. Improved Trust


Today’s customers are more empowered than ever. Before they decide about how they want to spend their cash, they need to make sure that they can trust the brand they’re working with. Your clients are already looking for evidence that they can trust you online in the form of reviews and testimonials.

Who better to convince your customers that they should buy your products than their very own peers? After all, we’re far more likely to feel comfortable buying something that our friends recommend, instead of deciding based on advertising materials.

If you need proof that a referral marketing plan will create trust, just check out this Neilson Trust Study saying that referrals are the most respected form of advertising by far.

3. Market reach and brand recognition


In the past, referrals were great – but they weren’t too much of a big deal. Without the internet to add volume to the words that people said, a customer’s review could only go so far. Of course, now that we’ve entered the digital world, there are more ways for people to make their voices heard than ever before. Today’s clients can share their opinions on public forums, Twitter, or even Instagram.

Because referrals have such a huge reach, it’s easier for companies to accelerate their brand marketing strategy and improve recognition for their company. For instance, if a customer uses a branded hashtag when referring your company to their work friend, then everyone in your network will be able to see this positive feedback.

Referral Marketing Strategy

Wooing word of mouth: Tips for the perfect referral marketing strategy


You know why referral marketing strategies are valuable, now you need to figure out how to get the most out of your own plan. Referral marketing is all about putting your message into your customer’s mouth. Essentially, you want them to tell other customers all the positive things you’ve already been saying about your company.

While you can’t force people to say what you want them to, you can make it easier for your clients to share the positive comments that can boost your company profits. After all, today’s customers are compelled to talk about their experiences. People want the social points that come with visiting a new restaurant and talking about it on Facebook or sharing a pic on Instagram.

All you need to do is give your clients the right nudges, and you can transform them into the perfect ambassadors for your brand. Here are a few tips to help you craft the perfect referral marketing plan.

Step 1: Get closer to your clients


Before you ask your customers to do something for you, you need to make sure that you have a strong relationship with them. Even if they are happy to talk about your company with a review, or testimonial, they might not want to put their reputation on the line by referring you to a friend too early in the relationship.

A good way to nurture endorsements is to ask your customers to join an exclusive “VIP” club of members online. When they sign up, you can ask for a few basic details like where your clients come from, what they like most about your brand and so on. This information will make it easier for you to create tailored experiences with your referral strategies in the future.

Step 2: Reward and recognise


Of course, your customers won’t sign up to these membership programs out of the goodness of their hearts. They’ll need something in return. Real brand loyalty is the perfect precursor to a referral strategy. However, that doesn’t mean you can’t make your customers feel more strongly about your brand with a few rewards.

If you’re worried that monetary rewards or free items might cheapen the referral marketing experience in some way, remember that you don’t have to actually pay people to refer you to their friends. Instead, you can offer:


  • Discount coupons for their next purchase.


  • Early access to sale events.


  • Exclusive perks and product upgrades.


Step 3: Build on affinity and transparency


Aside from letting your customers know that they’re going to get something in return for referring your brand, you also want to make sure that you’re building strong relationships with each advocate. The best referral marketing programs take advantage of the affinity that exists between a customer and a company.

Remember, today’s customers deliberately connect themselves with brands that share their values and make them look better in the eyes of their peers. With that in mind, you’ll want to make sure that you’re highlighting the parts of your identity that matter most to your customers. For instance, when you’re asking people to join in with your referral marketing plan, let them know that they’ll be giving something back to the environment because every referral leads to a new tree planted or another dollar donated to charity.

At the same time, be transparent with your requests. Let your clients know:


  • How the referral process works.


  • How information they provide is used.


  • What will happen to the person they refer.


Referral Marketing Strategy

Referral marketing strategies to engage your ambassadors


We’ve covered the basics of online referral marketing so far. Now, it’s time to get into the nitty great of building the perfect plan. After all, it can take time and effort to push your customer from just another happy client to someone who’s willing to send new revenue to your brand.

Part of implementing a strong referral marketing strategy is making sure that you have the right online presence to support your customers through your buyer journey. However, there are also a few other things you can do to improve the chances that your customers will want to refer your services to their friends, peers, and family members. For instance:

1. Offer next-level customer support


Obviously, customer service will always play a significant role in the performance of any business. People like to be heard, and they like their problems solved. One of the best ways you can encourage referrals is to provide your customers with the support they’re looking for. We all like talking about amazing experiences we have with our favourite brands. With a focus on exceptional customer support at the head of your strategy, remember to:


  • Be responsive: Make sure you’re constantly staying on top of things. Don’t let questions and comments sit on your social media pages for days at a time. If necessary, appoint someone on your team to keep track of what’s coming in and going out.


  • Be authentic: Your customers don’t need you to pretend to be perfect. They’d much rather that you owned up to your mistakes and used a sincere tone of voice when interacting with them. The way you act with your customers can make or break their experience.


  • Be consistent: Create a repeatable process that ensures all customers are getting the same attention from your brand. This should help your clients to feel more familiar with your company. That way, they feel as though they’re referring an old friend to their peers, rather than someone new.


2. Be shareable


If you want people to refer your products, services, or even your company to their network, then you need to make it easy for them. Today’s world is moving faster than ever, and customers don’t have time to worry about filling out complicated forms just so that they can send someone to your company.

On your website, set up a page that’s dedicated to your referral marketing plan. This page should include all the details that your customers need to know about joining your advocacy team. Tell them how they can join up, then provide them with a button they can use to link people back to your website in exchange for a reward of some kind.

The easier and more exciting it is for people to share your products, the more return on investment you’ll get from your referral marketing strategies.

3. Connect with influencers


While an influencer marketing campaign might not be the perfect addition to every referral marketing strategy, it can have some impact in the right circumstances. As we mentioned above, today’s clients connect with brands that they feel reflect positively on their own identity. With that in mind, if your customers see that you’re connected with people they respect and celebrate, then they’re more likely to want to refer you to their friends.

While you might not be at the point where you can afford to pay for a big-name celebrity to refer people to your product, there are plenty of additional influencers out there with smaller audiences that can still have a positive impact on your brand. Sometimes, influencer marketing is as easy as reaching out to a popular blogger and asking them to give you a shout-out in exchange for swag.

4. Have a little fun


When it comes to choosing the best referral marketing ideas for your plan, remember that today’s customers won’t want to take part in something that feels like a chore. We’re all working longer hours, putting more time into our careers, and struggling to find the fun in life at times. The last thing we want is to commit to another boring system at home.

Have a little fun with your ambassadors by launching referral contests to find your customer’s competitive streak. For instance, you could give a special prize to an advocate that gives you the most referrals before a deadline. Or you could tie a competition in with a theme, like “March Madness”.

You can also gamify your referral marketing strategies further by adding a points system into your advocacy campaign to reward people for submitting new referrals. The more points they get, the bigger their prizes become.

5. Keep it personal


Finally, remember that your customers will only be willing to raise awareness for your brand if they feel connected to your company. That means that you can’t expect to see results if you treat everyone the same way. People want to feel as though the businesses they advocate for care about them. Adding this level of customisation can be as simple as adding a person’s name into an email blast or sending them a special gift on their birthday.

Don’t rob yourself of client loyalty by trying to save time by cutting out the personalisation stage. Even if you use automation tools in your marketing mix today, there are still things you can do to put a personal touch into your content.

Referral Marketing Strategy

Learning from the best: 5 referral marketing examples


Here at Fabrik, we sometimes like to invest in a little competitor analysis when it comes to finding the best strategies for our clients. As a referral marketing business, it helps to know what the current trends are in the marketplace if you want to get ahead. With that in mind, we thought we’d share some of our favourite referral marketing examples with you, so you can see what it takes to win at word of mouth:

1. The Clymb


The Clymb’s USP is a powerful sales strategy. The company claims to offer products for a price that’s as much as 70% below retail prices. Of course, if you know a little something about the modern marketplace, you’ll know that today’s customers want more than just a good price.

At each stage of the buyer journey, The Clymb reminds you of their “invite a friend” program.

Referral Marketing Strategy

This ensures that as the customer clicks through apparel pictures and product pages, they’re constantly reminded that they could save $10 just by sending someone new to the company’s website. It’s a win-win scenario – whenever a customer successfully refers their peer, everyone gets rewarded.

2. MeUndies


It’s hard to write an article about the best referral marketing programs without paying some attention to MeUndies. As possibly one of the best referral marketing examples out there, these guys have narrowed in on a customer base, and they’re constantly expanding with an attitude of transparency, honesty, and fun.

Referral Marketing Strategy

The great thing about the invitation page on the MeUndies website is that it focuses on the win-win reward of bringing someone new to the brand. You can “Be a Hero” and give your friends 20%, while you get $20 in return. If that wasn’t enough, MeUndies are also working wonders with cart abandonment, by giving customers the chance to “nudge” their friends when they don’t make a purchase.

While cart abandonment email marketing can be effective by itself, it automatically becomes more compelling when it’s a friend sending you an email, reminding you to buy.

3. Koodo Mobile


Koodo Mobile is clearly doing something right in the customer experience world. In fact, the brand was rated as the company with the highest customer satisfaction rate for a wireless provider in 2016. To continue acquiring new happy customers, Koodo decided to launch their own double-sided referral program.

Referral Marketing Strategy

The business uses plenty of bright and exciting colours to grab your attention on the referral page, and it also follows the same double-sided reward scheme as the companies above. Not only does the referring party get a present, but the new customer gets something too.

4. Harry’s


Harry’s isn’t your dad’s shaving brand. In other words, this shaving accessory has a billion-dollar subscription service and their own barber shop in New York too. Part of the company’s incredible success is constantly linked back to their referral marketing strategy, which asks customers to link brands back to the website in exchange for free products.

Referral Marketing Strategy

As part of a strategy to generate buzz for their launch, Harry’s worked alongside a referral marketing services team to establish a week-long pre-launch referral program, capturing all the email addresses of potential leads. This helped them to find customers who were willing to advocate for them while giving them a bigger marketing list to work with too!

5. Evernote


Finally, when it comes to using referral programs as a marketing strategy, Evernote is another brand that’s got the system down. This unique company that helps people to take digital notes has collected more than 100 billion users in the last decade. With a referral marketing strategy, they’ve achieved phenomenal growth and financial success.

Referral Marketing Strategy

Evernote uses the “freemium” model for earning referrals. Which means that customers can simply offer their friends and peers a free version of the experience before they’re gradually and gently prompted to start using the paid option instead.

Simple and innocent, the freemium model gives people a taste of what they could get from a product or service so that they’re more likely to buy the whole thing. Additionally, when customers refer someone to use Evernote, they earn points to use the premium version themselves for free!

Referral Marketing Strategy

Winning word of mouth with referral marketing strategies


Ultimately, no matter how you feel about them, referral marketing plans will always be one of the most important components of a successful strategy for inbound sales. The truth is that no-one can encourage your customers to purchase from your brand more than their peers and friends.

Of course, referral marketing needs to be systematic and smart to have the right impact. The problem is that a lot of salespeople simply don’t know how to go about getting the referrals they need. In fact, a lot of experts still assume that cash is the ultimate way to win their customer’s hearts. However, a University of Chicago study found that non-cash incentives are 24% more effective when it comes to improving advocacy.

When you set out to build your own referral marketing strategy, with the help of a team like Fabrik, the most important thing to remember is that you need to make it easy for people to share your product, fall in love with your brand, and advocate for your service.

The better your referral marketing strategy is, the more your company will grow.

If you enjoyed this article, you might enjoy these too:

— Persuasive promotional strategies to power your profile

— Success starts from within: Employee communications

— How to create your own brand advocacy programme

— Developing dialogue through brand communications

About the author...

Steve Harvey

Client Director. Captain of calm. Armchair football fan. It’s 18 years since Steve turned his back on investment banking (and any chance of early retirement) to plough his own furrow in creative services. Experienced. Knowledgeable. Meticulously well-organised. Keeps Fabrik running like a well-oiled machine. His temperament is cool. But his peppermint tea is piping hot (with a Fox's Crunch Cream on the side).

    3 Comments

  1. You’ve definitely got to get your rewards program right for a referral marketing strategy to be a success. Your customer base will really determine what kind of rewards you should be offering, like the author says not all users will be motivated by the same rewards! From my experience, double-sided rewards tend to work better with these sorts of schemes, like UBER’s where the sender and receiver both receive £10 worth of free rides!

    • By George Henley |
    • 29 May 2018
    • Reply
    • This is so true, double-sided rewards are often a great way to go! Thank you for reading the article!

      • By Brontë Swannick |
      • 01 June 2018
      • Reply
  2. Referral marketing is a really interesting idea.

    When encouraging people to sign up for referral programs the best thing you can do for them is reduce as much friction as possible to make it easy for them to sign others up. Just easy stuff like making sure that they only have to give a small bit of information on the referral email with the rest filled in with your professional copy or stuff like single sign on’s to share stuff on their social media accounts.

    People are inherently lazy and the easier that you make it for them the better 🙂

    • By Richard Cooper |
    • 29 May 2018
    • Reply

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