7 Ways to Take your Referral Marketing Program to the Next Level

What is  Referral Marketing?

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


Why Referral Marketing?

1.  Referral Marketing is Fast and Easy

One of the reasons why you should include referral marketing is it is easy to implement. Even new websites like Best Drums Set Labs can use it effectively. The reason why it is so easy to use is referral software. With software, you can now launch a program in just a few clicks. You don’t need to have extensive knowledge of programming and coding. You also don’t need to know about content marketing. Referral software gives you a form to fill that will allow you to launch your referral campaign in just a few clicks.

2. Referral Marketing Gets More Traffic

One of the top marketing goals for every online business is to get more traffic to the website. Traffic usually translates to more sales. The factor that is at play here is the conversion rate as more people visit a website, the number of people who are converted into buyers increases. Every site has a set conversion rate based on how well the sales system is functioning. For example, the sales system is performing at 10%. If your website has 1000 visitors and it is converting at 10%, you have a chance to get 100 sales from 1000 visitors. Of course, this is not an exact rate. The conversion rate can fluctuate depending on the performance of the sales page. Still, traffic plays a massive role in raking in those sales. And referral marketing can help you with that. 

3. Referral Marketing Gets More Sales

As mentioned, referral marketing can help you get more sales because of its ability to attract traffic. More than that, the reason why it can attract sales is its influence on social proof. Referral marketing requires your customers to promote your brand to their family and friends. When they do this, they will either share the brand or write about it online. When they do this, they strengthen your social proof, which makes your website more likely to get more sales in the future. 

4. Referral Marketing Gets More Loyal Customers

As your website’s social proof increases, your loyal customers also increase. As more people buy from your website, more and more people will have a relationship with your brand. When this happens, you have a higher chance of getting more loyal customers. This is because the trust factor that your brand has increases with social proof. If you add the positive customer experience to the mix, you will have customers who have relatively higher customer lifetime values. This means that they are far more likely to buy from your brand again.

NOTE: Referral marketing can also help your eCommerce website stop shopping cart abandonment. This is every eCommerce website owner’s nightmare. With a higher trust factor, you can remove the second thoughts that your prospective customers may get when they buy from you.  


5. Referral Marketing Helps You In Brand Recognition

In the old days, quantity trumps quality when it comes to ads. Brand recognition is usually dependent on the frequency that people see your brand. If they see your brand a lot, they will remember and recognize you. However, times have changed. It is no longer enough that your customers see your brand or logo. They also need to know what you stand for. You should send a clear and consistent message across different channels. 

Fortunately, referral marketing can help you here, as well, since it entails referrers promoting your brand. You have an army that will send a consistent message across social media platforms. This will help your brand to become easy to recognize and remember. 

Why Referral Marketing Systems Fail?

Referral marketing is useful, but it is not immune to failure. Here are some reasons why a referral marketing system can fail. 

1.  It Is Far Too Ordinary

If you will take a basic template and just pass it as your referral program, that will not work. This is the reason why you should look for other ways. If you only do what other people are doing, you will be limited to the results that they are getting.

2. The Reward is Not Attractive Enough

It is also essential that you consult your customers to see the rewards that interest them. If you set up a system without asking your customers, you may not get the results that you want. 

3. The Business Owner Did Not Promote It

Lastly, it is also imperative that you promote your system once it is launched. Don’t leave it without doing anything. It will not help itself on its own. You need to look for creative ways to inform your prospective and current customers about its existence. 

How to Take Your Referral Program to the Next Level

Now that you know how vital referral marketing is, why it can fail, and how it can help your business, it is time to take it to the next level. In this article, you’ll learn some strategies on how you can do this. Here are some ideas. 

1. Turn it Into a Contest.

One of the ways you can make a referral campaign more attractive is by turning it into a contest. Often, the focus of referral systems is to give rewards for contact information. The customer shares the contact information of his family and friends, and he gets paid with cash, discount code, or others. But if you will turn it into a contest, it adds another element of anticipation. They can get a prize on top of what they can get from sharing the contact information of their family and friends. This does not include the competitive element where they feel good when they come up on top. This encourages customers to share your brand with more people and can make your referral program even more useful.

If you want to create a referral contest, you just need referral software that supports that. This software should have a contest option which allows you to set up prizes for referrers who got the most leads. The great thing with doing this with software is it omits manual counting. With this, you can watch as referrers gather more leads for your business, and you can just pay those who deserve it. 


2. Have an Exclusive Program for Influencers

When business owners use influencer marketing in their referral system, they usually ask influencers to share the system with their followers. While this can work, it is not as effective as creating an exclusive program. You see, every influencer deserves a different type of application. An influencer’s followers may not be entirely similar to another. It is essential to consider these when asking them to promote your referral marketing system.

Fortunately, referral software can help you in creating multiple referral funnels. You can then test these funnels on different influencers. You can do this by creating a dedicated funnel for each influencer. The best part is you can also track the performance of each influencer. You will be able to see who invites the most people to your website. 

3. Cross-Promote With Other Brands

Referral marketing is useful because it deals with networks. It allows business owners to leverage the personal networks of their customers by simply asking them to promote the brand to their family and friends. But you should also use the same idea when developing your referral program. This time, you leverage your relationship with other business owners. This is a far more effective way to promote your referral system, for you are showing it to customers who are far more likely to act on it.

The trick is to promote your referral system to similar markets. This means that you should look for businesses that serve the same market but are not in direct competition with your products and services. Take the wedding niche, for instance. If you are a souvenir provider, you can work with bridal gown rental companies, flower shops, and wedding planners. These are businesses that have the same market but don’t have the same products. From here, you can ask them to promote your referral program in return for referring theirs. Another idea is to create a referral program together. You can pitch in on the prize and develop the referral program together. Each of you can have access to the contact information collected in the process. 

4. Fuse it With a Giveaway

Another creative way to power your referral program is to host a giveaway. If cross-promotion calls for collaboration between two business owners, giveaways can allow 3 to 10 business owners to promote the system together. In this system, up to 10 business owners can pitch in products for the giveaway. This way, the giveaway will be more attractive to the target market. This works together with the contest feature of referral software. Instead of a simple prize, you can let them qualify for the giveaway instead. The more referrals they make, the higher their chances of ‘winning.’ 

For this to work, you have to ensure that the software that you are using to create your referral program has a contest or giveaway feature. This way, you no longer need to go the manual route to count the referrals. The software will automatically determine the winner. If you cannot find a software that can do this on your platform. You can always explore other platforms such as WooCommerce, BigCommerce, and Shopify. WooCommerce, for example, has some WooCommerce affiliate plugins which you can use. Be sure to look for a plugin with a feature that supports giveaways.

5. Use Mystery Gifts

Rewards can be exciting. But it can become even more exciting if you include mystery in it. This is where mystery gifts come in. It is where the receiver will not know what he is going to get until you give it to them. Mystery gifts are great if you have products that you are planning to remove in your inventory. You can package them into one mystery gift and offer it as a reward for a limited time. The idea of mystery gifts applies not only to single items but also to multiple items bundled together. You can then use this to provide unique rewards for your referrers. 

6. Include Charity Donations

Another unique reward that you can give away is charity donations. You can package prizes with contributions. This way, your referrers don’t only get a bonus for taking action. They also get to help other people in the process. This approach is highly effective for markets that support specific causes. For example, the vegan community supports animal welfare. If you are in this niche, a donation towards PETA or a similar organization is usually appreciated by the referrers. The best part is it makes your referral program more attractive. Since you are supporting a cause, some referrers may even promote you to other people in the community. 

7. Have an Exclusive Product as a Reward

If you want to have your customers clamoring for a reward, you can give away exclusive products when your referrers reach a certain promotion threshold. This is where you implement milestones and let your referrers get bonuses based on how many people they invite to your site. The product should be exclusive. This means that customers can only have access to the product if they join your referral campaign. This approach is useful in collectibles for customers who can get exclusive items in return for joining the campaign. Just make the reward attractive enough that customers will do their best to promote your drive just to get access to it. 



Referral marketing is effective. But if you plan to take the usual route, you will only get typical results. If you want to create a more effective referral system, you should be willing to make it to the next level with the strategies included in this article. This will help you get more referrals for your program. 

Additional resources

  1. What is eCommerce Marketing? and the right way of doing it!
  2. Top eCommerce Marketing Automation Ideas (to use in 2020)
  3. eCommerce Marketing Strategies that work (even) in 2020
  4. How to do Conversion Rate Optimization to your shopify store?
  5. 19 eCommerce Marketing Trends that are Dominating 2020

About the author

Ra Karthik

Ramachandiran Karthik is the Digital Marketing Manager at Adnabu. He loves to help Shopify stores grow their business with Google Shopping & Google Ads, using advanced features like multi-currencies, multi-languages, Metafields. Karthik has a lot of experience in digital marketing and enjoys exploring new ways to make advertising more effective for both advertisers and customers.

By Ra Karthik