What is a referral

What is a referral, and how to use it?

What is a referral?

A referral in referral marketing means a friend of a customer sent to a business to make a purchase. The friend gets something in return for referring the customer, such as a discount, free product, or service.

Referral doodle

Referrals are necessary because they create a word-of-mouth advertising campaign that can be more effective than other forms of marketing.

Why should I use referrals?

The main reason why you should use referrals is that they work. A study by Extole found that a referred customer has a 25% higher customer lifetime value than customers acquired through other marketing channels.

In addition, referrals are cost-effective. They don’t require any special advertising or marketing efforts, and they often result in lower customer acquisition costs.

Finally, referrals help you build a community of loyal customers who are more likely to return and do business with you again in the future.

Referrals help you build a community of loyal customers who are more likely to return! #referralmarketing Click To Tweet

Different types of referral campaigns

There are various referral campaigns you can run, and the one you choose will depend on your business and what you’re trying to achieve. Some of the most common referral campaigns include:

1. Referral program:

Referral program

This is a formalized system where customers are given a unique code or link to share with their friends. When the friend makes a purchase, they receive a discount or other incentive.

2. Friend referral program:

Friend referral

This is similar to a regular referral program, but instead of giving customers a code or link to share, you provide them with something like a branded T-shirt or hat to give to their friends.

3. Social media sweepstakes:

Social media

This campaign involves giving away a prize (such as an iPad, free groceries for a year, or $100) to refer friends to the business.

4. Contest:

Contest

This campaign is similar to sweepstakes, but the prize is usually smaller (such as a gift card). To enter, customers have to refer friends to the business.

5. Charity donation:

Charity

In this campaign, the business donates a certain percentage of sales from referrals to a charity of the customer’s choice (e.g., the Red Cross, UNICEF, or an animal rescue shelter).

6. Customer loyalty program:

Customer loyalty program

This campaign rewards customers for referring friends by giving them points or other incentives that can be used to get discounts on future purchases.

The most important thing about running these campaigns is that they need to be easy and fun for your customers to use. It should be clear what you want them to do and how they can do it. Make it as easy as possible for them to refer their friends. And make it fun by adding something like a photo or video that customers can share with their friends.

How can I set up my own referral campaign?

Now that you know what a referral is and why you should use it, you may wonder how to set up your own referral campaign.

Step 1: Determine if it will work for your business.

The first step is deciding if a referral program will work for your business. You can do this by looking at the company’s strengths and weaknesses and the kind of customers it attracts.

If you have a strong brand, loyal customers, and a high customer lifetime value, then a referral program is likely to work well for you. However, if you don’t have a strong brand or your customers are more price-sensitive, you may want to consider using other forms of marketing.

Step 2: Choose a campaign.

As mentioned above, you can run many different referral campaigns depending on your business and what you’re trying to achieve. Think about the main KPIs you want to track for this campaign (i.e., number of referrals, average order value, etc.) and then choose a referral program.

Step 3: Design the campaign.

Once you’ve chosen your referral program, it’s time to design the campaign. This means selecting the type of promotion you want to run (e.g., Facebook sweepstakes or customer loyalty program), setting up an easy-to-use signup page for customers to refer friends, and deciding on the incentive you’re going to offer.

Step 4: Launch and promote the campaign.

Once your campaign is ready, it’s time to launch it! Make sure you promote it heavily on your social media channels and website. You can also send out an email blast to your customers, letting them know about the campaign.

Step 5: Monitor and optimize the campaign.

Now that you have a referral program in place, it’s time to monitor its progress and tweak things when necessary. Keep track of how many people are using your referral code or link so you can see how well the campaign is performing over time.

You should also set up a way to measure the main KPIs you chose in step two. For example, if your goal is to increase sales from referrals, then track this by using Google Analytics or another web analytics tool.

Step 6: Rinse and repeat.

Once you’ve run a successful referral campaign once, it’s time to do it again! Keep track of what worked well and what didn’t and make changes as needed. And don’t forget to promote your campaign heavily on all of your channels.

How can I get more referrals?

Having your referral campaign is just the first step. You also need to make sure you’re getting more customer referrals. One of the best ways to do this is by offering an incentive for your customers to refer their friends. There are many different options, including discounts or coupons, free shipping, cashback, and even products!

Winning money

Once you’ve decided on the incentive you want to offer, it’s time to create a sign-up page for your customers. Make sure it’s easy for them to use and that they can refer their friends in just a few clicks.

You can also promote your referral program on your social media channels and website. And don’t forget about email. You can send out an email blast once the referral program is live, letting your customers know about it and what you’re offering.

Another great way of getting more referrals is by having a customer loyalty program that rewards you for simply doing business with them. If you offer some type of reward or benefit to your loyal customers, they’re more likely to refer their friends.

There are many different ways of getting more customer referrals, and the best way to find out what works for you is by experimenting. Try a few other things and see what produces the best results. And don’t forget to promote your referral program on all of your channels!

The benefits of getting a referral from a customer

Benefit 1: Increased sales.

The best reason to run a referral campaign is that it can increase sales. When someone refers a friend, they’re essentially vouching for your business, which can lead to more customers. A study by Nielsen found that referred customers are 18% more likely to buy something from you than non-referred customers.

Benefit 2: Increased brand awareness.

Another benefit of getting referrals is that it can lead to increased brand awareness. When someone refers a friend, they’re essentially introducing them to your business, which can help increase name recognition over time. As your referral program grows, more and more people will learn about your company and its products.

Benefit 3: New customers.

When someone refers a friend, it can lead to an entirely new customer relationship. If the referred person purchases something from your business, then you have earned another customer! This is one of the best benefits of having an effective referral program in place.

Benefit 4: Improved customer loyalty.

Referral programs can also help to improve customer loyalty. When someone refers a friend, they essentially say that they like your business and products enough to recommend them to others. This can lead to more customers doing business with you in the future.

As you can see, there are many benefits of getting referrals from customers. If you’re thinking of running a referral campaign, then just remember that it can lead to great things. There is plenty of value in getting more referrals from increased sales and brand awareness to improve customer loyalty.

Examples of how to use your referrals in your marketing strategy

The following cases are some highly successful referral campaigns that generated a large number of referrals and made a lot of money for the companies involved:

Paypal referral campaign

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In the early years, PayPal ran a successful referral campaign that rewarded both the referrer and the person referred. The referrer got $10 for every person they referred who then signed up for PayPal and made a transaction, and the person referred got $10 for signing up. This campaign was a huge success, with PayPal getting millions of new customers.

Dropbox referral campaign

Another excellent example of a successful referral campaign is the Dropbox Referrals Program. They set this program up because if you invited someone and referred a new customer, then both you and the other person got an extra 500MB of storage space on your account. This led to many people signing up for Dropbox and referring others. The program was so successful that Dropbox ran out of storage space on its servers!

Conclusion:

Referral programs can be a great way to increase sales and brand awareness. If you’re thinking of running a referral campaign, then just remember that it can lead to great things. There is plenty of value in getting more referrals from increased sales and brand awareness to improve customer loyalty. Try a few different things and see what produces the best results for your business. Good luck!

Remember, referral programs can be a great way to increase sales and brand awareness. If you’re thinking of running a referral campaign, then just remember that it can lead to great things. There is plenty of value in getting more referrals from increased sales and brand awareness to improve customer loyalty. Try a few different things and see what produces the best results for your business. Good luck!