How to Boost Sales with Referral Marketing

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How to Boost Sales with Referral Marketing


Referral programs are among the most effective ways to get more users down the sales funnel. According to research, customers trust referrals a lot; they are among the most trusted forms of marketing. People are generally more likely to consider or buy products when they are recommended by other regular people, let alone their friends or family. Ultimately, consumers are more likely to trust people’s networks than sponsored ads.

The paints mentioned above are a simple picture of how effective referral marketing is. Since it bases itself on word-of-mouth marketing, it is a direct way to accelerate the customer acquisition process. However, to leverage this form of marketing, you need to launch a referral program and incentivize some customers to promote their brand within that specific network.

Why referral marketing works & ways to implement it

If you are currently not doing anything to motivate your referrals or don’t even have a referral strategy in place, it’s time to rethink your priorities. The main purpose of this strategy is to bring in new customers through word of mouth. According to Jonah Berger, who is a professor of marketing at the University of Pennsylvania, referrals are effective because of six main reasons summarized as STEPPS:

  • Social currency: Everyone wants to look smart and cool in the eyes of others
  • Trigger: If a product triggers your customers’ minds, it will urge them to share it
  • Emotions: Products that touch the heart of the customers will gain more attention
  • Public: Public products or events tend to get more word of mouth
  • Practical value: Products need to be practical to be referred to
  • Stories: People are creatures of habit and often link every experience with a story, so make sure to give your product one

Now, let’s talk about the best strategies to nurture long-term relationships with customers and make them talk about your products/services and refer them to their circles.

  • Building an email referral program

Email is one of the primary channels you should turn to if you want to harness the power of referral marketing. It is also among the best ways to nurture customers. Often seen as relevant and effective, an email marketing strategy can help attract more people to your product. 

A good example of a solid email referral program is Dropbox. The cloud storage brand did the same with their product – giving out 16GB of free storage for every new referral their users brought in. All they needed to do was enter their friends’ email addresses, and they became invited to use the cloud storage solution.

  • Event-based referral programs

If you want to host an offline referral program, a good idea is an event that people love to talk about and refer indirectly. Whether it’s a summit, gathering, discussion, coffee talk, or conference, you can invite participants to discuss various topics and reward them with incentives when they bring in more attendees.

  • Consider using coupon codes & offering discounts.

Coupon code offers and discounts are common among e-commerce marketers. In this method, a coupon code is generated for each customer who wants to refer other people. Once they share the coupon code with their circle, they get rewarded whenever someone shops using it or sign up with it. Common examples include fashion influencers who share coupon codes for site-wide discounts on specific websites via their Instagram. As a result, they encourage their fans to shop, get discounts, and personally benefit from the brand.

  • Cashbacks / cash rewards

With a cashback program (the same as a cash reward program), buyers get immediate cashback on each referral. Plenty of stores experimented with this strategy, offering an alluring percentage for people, which is an easy way for someone to save and get some money back on their account. In addition, there are numerous examples in the digital marketing world where SaaS platforms and other brands let users earn Referral Earnings every time their friends make a purchase.

What makes referral marketing effective?

Now that you know some common referral marketing strategies and examples, it’s time to think about your strategy. Your goal is to make sure to understand your main objectives and consider making it a win-win program for yourself, your users, and their referrals.

Once you create something like that, move on to making your referral program noticeable, and work on promoting it on social media to bring more customers to it. If you want to go the extra mile, you can always personalize your referral marketing program or explore other digital channels such as other social media networks, email, or blogging. Research your audience well to understand the best way to reach them and make them refer more people to your product or service.

How to Boost Sales with Referral Marketing

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