Tips & Guides — 25 Apr 2022
11 Customer Referral Ideas
Today, consumers are bombarded with marketing campaigns wherever they look. Whenever we view a screen on just about any device, we find ourselves being nudged, tugged, and pulled down the sales funnel. It can be hard to know which way to go.
Increasingly, referrals are becoming the best guide for potential customers. In a recent survey by Hubspot it was found that consumers trust friends and family to learn about new products nearly twice as much as any other source.
Your business should leverage that trust by incentivizing your customers to become brand advocates. Referral marketing is the answer to leveling up your word-of-mouth marketing and conversion rate.
A customer referral is when current customers refer someone they know to your brand. Customers can be incentivized through customer referral programs or refer-a-friend programs. They work well because customers carefully select from a pool of family members and friends that they think will be interested in your offering.
A customer referral program may sound similar to affiliate marketing. However, with referral marketing, you are incentivizing your existing customers to generate qualified leads with things like credit, discounts, and gifts. You are leveraging your existing relationships to grow your brand.
A customer referral program can supercharge your word-of-mouth marketing. Studies have shown customer referrals to be the most effective form of marketing. Those bringing referrals are typically your most loyal customers. They use your products and services and want to share them with the world.
With referral campaigns, you incentivize the process. People are more likely to do something when a reward is on the table. This encourages and effectively recruits your best natural advocates, your existing customers. Referral incentive programs can help you expand your sphere of influence and bring in new business.
Brand advocates will help you reach your target audience and also help you discover new audiences. During the referral process, your customers will become more engaged with your brand as they recommend your products. And any referred customers are all potential future advocates as well. So the cycles can repeat for more growth!
A successful referral program strengthens the partner relationship with your advocate base, and promotes brand awareness. Happy customers can share their positive experiences with your brand on a wide array of channels.
With a referral marketing platform like Affise, you can streamline the process of initiating and running your campaigns. You also get several layers of protection against fraud. This includes click-level fraud prevention, monitoring IP address, conversions, and more, all powered by our partnership with 24metrics.
There are endless possibilities to construct the best referral program. Here are some of the best customer referral program ideas for you to help grow your business.
When it’s the holiday season, everyone wants to give. But most people enjoy giving year-round if the opportunity presents itself. Help facilitate people’s natural altruism with social gifting incentives.
With social gifting, the referrer directs the reward to their friends and family members. This can be anything from a small discount, cash, a gift card, or a free month of subscription. As a double-sided incentive, both customers receive a reward.
Cycleboard’s social gifting program makes it easy for customers to spread the wealth with their friends. And as benefactors themselves, the friends will be keen to pay it forward after making their first purchase.
With so many reward programs available today, it can pay to add a bit of fun to rewards. Different customer segments are motivated by different things. What makes them tick is as unique as the products and businesses they support.
Offering mysterious rewards taps into those customers looking for a rush of excitement. Because the gift is unknown, it gives you lots of flexibility in what you choose to reward.
Choose referral rewards that fit with customer demographics and purchase history. Or you can opt for a “Mystery Box” full of branded swag like CompanyCam.
Store credit is an appealing reward for any customers. This type of referral incentive works well for businesses that sell daily and monthly essentials. Credit can also work well on platforms like dating apps and mobile games. So if you are selling expensive products with a long-buying cycle, you may want to look elsewhere.
The key is that your average customers will be returning to buy from you often. With this knowledge, an offer of store credit is equal to cash to the customer. They know they will spend it in the future.
Store credit can be a great motivator for those customers looking to save a few bucks or generate extra “income”. The Airbnb Referral Program offers “Travel Credits” to customers as a reward for leads that make a qualifying booking.
Like social gifting, charity donation can be a quick path to the hearts of your best customers and potential brand ambassadors. In this instance, neither the customer nor the referred friend is given any reward or gift. The reward is given as a donation to a predetermined charity.
People like to support businesses that promote social responsibility. So not only will customers be motivated by the chance to support charity, but they will also have an improved understanding of your brand values.
Choosing a charity or cause to donate to can be a large task to take on. A quick way to narrow it down a little is to focus on non-profit organizations that fit with the values and ethics of your company. And it can help to find charities that naturally fit with your business and its products.
For example, if you sell a SaaS platform for business phone solutions, you could donate to a charity like Cell Phones for Soldiers. Choosing a good non-profit fit like this will help personalize the referral program for your brand and make it more memorable for your advocates.
Who doesn’t like to save money? Discounts are one of several well-proven referral marketing ideas. They help nudge customers to click that “Buy Now” button. Unlike store credit, a discount offer means that the customer will always need to spend some money on the next purchase.
Discounts work great in many types of retail, like fashion or gaming, because these industries typically have a diverse price range of products. These items are less “needs” and more “wants”. And any discount offer can be enough for someone to click the buy now button.
By encouraging customers to refer their peers with discounts, you are boosting the monetization of your referral program. Your best customers will help you reach a new audience but also likely spend more on your products.
A referral contest is a great way to boost referral efforts over a set period. The contests can be a giveaway where each referral tallies up another entry in a random drawing. Or it can simply be a reward that goes to the top X advocates during the contest.
Referral contests also gamify the experience and up the fun factor for your customers. Those who like competition will have fun tracking their number of referrals against others. Use referral marketing tools to help regularly update leaderboards on your website and social media channels.
Make the reward match that of a “grand prize”. Offer something spectacular that blows people away. With a bit of due diligence, your business should be able to offer large prizes that will be equal or less in total costs to that of other referral programs.
Referral program incentives should be as dynamic as your brand and your audience. Holidays and changing seasons are always a good opportunity to inject new life into any incentive program. They also give you another avenue to promote how a referral program works.
The example below is an offer from Huawei that tied a contest into the dreaded Single’s Awareness Day, also known as Valentine’s Day. This helped the brand turn seasonal awareness into brand awareness.
Coming up with creative customer incentives for referral programs can be easier than you might think. Oftentimes, it involves taking a well established idea and taking it further. Stackable rewards take their inspiration from store credit and discount offers. Only this reward model is better suited to subscription-like services.
The idea with stackable rewards is that the discount or credit is applied as long as both the customer and their referral are paying subscribers. A small credit is applied to the referrer’s account for each successful referral.
This method ensures that any costs you incur go towards new customer acquisition. So it is a great way to maximize your referral spending. But only on the condition that five, 10, 20, or more customers are all paying each month.
When done right, it is well worth it to give such a great advocate a free monthly subscription to your services. This can work great for ecommerce and SaaS platforms. Or apps with monthly fees like for a VoIP phone connection, for example.
Depending on your niche and target market, exclusive perks can be the way to turn on some new brand advocates. In premium markets, your customer base may be less inclined to put some sweat into their lead generation with the promise of just small discounts, gifts, and other rewards. But what these customers crave is gaining the rare and exclusive.
When we refer to exclusivity, we are talking about things that money can’t buy. These can be things like access to membership clubs, limited and “custom shop” type products, or other rare opportunities. For some of your best and more affluent customers, they will stop at no cost or amount of referrals needed to get what they want.
Take inspiration from the likes of the former Tesla referral program, which offered a plethora of award levels. But near the top, exclusive perks like prototype features (sunroof) and VIP invites to company unveilings and more. For example, if you offer a SaaS platform for ecommerce you could offer an invite to an exclusive seminar on “What is Retail Merchandising?”
For most types of online services and apps, there is usually a free product or basic version available. These lower commitments convert at higher rates. However, for most business models like SaaS platforms, the main goal is to get users onto higher-paying subscriptions.
Many users will opt for a freemium version of the service simply because they don’t want to spend money and figure what they have is good enough. But you can give them a taste of what they’re missing out on by offering free upgrades in exchange for referrals.
One of the most famous examples of this was the Dropbox referral program. For each successful referral, users were able to upgrade their storage space on the service.
Users will bring in quality leads and also get to try out your more premium packages. When the upgrade duration runs its course, many of them may find it hard to go back to the “basic” service level. So with upgrade incentives, you can expect more leads and greater customer lifetime value (CLV).
With multi-level rewards, you can appeal to those advocates who are willing to put in more work if the price is right. Set milestones that make sense for your buying cycle. If you are selling access to an online platform maybe start with one, and then five, 10, 20 referrals, and so on.
The reward levels work because customers are essentially in competition with themselves to reach a certain tier. Multi-level rewards can motivate your determined advocates to hit big referral numbers. It can also be a good way to change up and refresh your existing referral programs.
Customer referral incentives can increase the number and quality of your lead generation. Getting good results from your referral marketing program requires an understanding of these best practices.
Simple forms reduce friction for customers to make referrals and help them get rewarded. Use referral submission forms that let customers easily fill out the necessary information. This includes contact information for the lead and the customer.
Make it easy for your customers to find the submission form by having it accessible at the top of your website as well as form access at any time from a sidebar. Keep the referral submission process painless.
Referral cards are like fill-in-the-blank cards. They have all the information needed on them other than that of the advocating customer. The offer is clearly stated on the card. All they need to do is list their contact information and all due credit will be given in time.
These cards are a great way to help your customers keep their brand in mind via a physical reminder. These are also a good option because they can give them out in any situation. Referral cards can be packed into any shipment or handed out at in-person services like hair salons and chiropractors.
If you want to connect with and empower your brand advocates seamlessly, then you should get on board with a referral marketing app. With the Affise platform, you get full click and impression tracking of your referral-generated traffic. Our multi-channel analytics suite gives you a plethora of reporting options including over 50+ data breakdowns.
API integrations with CRMs, and connections to other platforms make using Affise a breeze. This includes our integration with AppsFlyer for better analysis of your mobile engagement. Together, these tools give you valuable insights for better decision making that sharpens your referral campaigns.
By using a mobile app, you won’t be ignoring the fact that between 75 and 85 percent (depending on the country) of all internet traffic comes from mobile devices. You will be reducing the friction for your everyday customers to more easily generate referrals.
Gamification is when you incorporate game mechanics or techniques into any marketing strategy. When paired with incentives, it can create the same positive feedback loop as the most addictive games and mobile apps.
A recent survey found that 89% of respondents found gamification to make them more motivated and productive. Use gamification to boost the motivation levels of your customers and reign in the referrals.
As discussed earlier, there are many options to gamify the referral experience. Giveaway contests, competitions, and tier-level referral rewards are all easy routes to gamification. With a referral platform like Affise, you can give customers the opportunity to participate in contests, get special offers and earn bonuses.
Treat your referral program like one of your products or services. That means you need to actively sell the program. The main difference is that you are only selling it to your existing customers. And what’s being asked is not very much. So it shouldn’t take as much convincing.
Use the normal channels as you would for any other type of messaging. Email marketing, web pages, LinkedIn, and other social media networks are good starting points. And always make sure your referral link is easily discoverable on-site.
With Affise Reach, you can find new partners for your brand that can boost the awareness of your products. But these affiliates can pair up with you for any offers including those of your inventive-based referral program.
In live music everything is about timing. If someone gets it wrong, the performance is ruined. Don’t ruin the performance of your referral campaign by asking for leads at the wrong time. Asking too early comes across as pushy while asking too late means you missed out.
So when is the right time to ask for customer referrals? It depends on a lot of things. But it’s usually not until after they have already made a purchase themselves. This is something that may require A/B testing to perfect. But it’s always a great time to ask for referrals after a purchase.
Retargeting is a great way to capitalize on customers who have shown at least some interest in your referral program. Use browser cookies or tracking pixels to monitor any visits to relevant landing pages or abandoned referral forms.
The cookieless era is upon us. You want an accurate and consistent way to track every detail of your marketing campaigns. Use a platform like Affise for reliable cookieless tracking and attribution via technology like CS2 and S2 tracking.
It’s always a good idea to test out any of your marketing campaign materials. A/B testing your referral messages is a must. Use tracking software to make it easy to monitor and optimize your referral marketing strategy.
This will let you find out which customers are giving you great leads and which ones are churning out duds. Then you can change up several template components such as the heading, subject line, body copy, or even the incentive offered.
Offering incentives for leads is one thing, but exchanging rewards for sales may make more sense for some businesses. Many types of affiliate and partner marketing programs work by the commission on conversions like sales. Take that as inspiration for the way you reward your customers.
Sales incentives guide the customer to only provide quality leads with genuine interest. This type of referral program has worked well for Uber.
It doesn’t matter if it’s Christmas, Hanukkah, Diwali, or a birthday, everyone loves receiving a gift. You can always offer your customers something they want or need. For relatively low cost, you can turn your best customers into your best brand advocates.
It truly is a win-win for everyone involved. Referral participants get rewarded for success. You will get better leads and greater customer loyalty. Your audience reach will grow, and the cycle will repeat.
Written by
Richard Conn is the Senior Director for Demand Generation at 8x8, a leading communication platform with integrated contact center, voice, video, and chat functionality. Richard is an analytical & results-driven digital marketing leader with a track record of achieving major ROI improvements in fast-paced, competitive B2B environments.
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