Referral marketing is one of the best strategies to generate qualified leads for your business. They come directly from your existing customers who know your business and know who would find your products/services helpful. 

However, just expecting your existing customers to refer their friends and family members to your business is not a great strategy. It is important to suitably motivate, incentivize and make sure that referral becomes the source for the majority of your business. 

Customers love being the person who refers someone to a great business and with the right strategy, it can help your business grow faster and better. 

This article explores the top referral marketing strategies you can leverage to build a successful referral program for your business.

What is referral marketing?

Referral marketing is the process of leveraging the trust and goodwill established with existing customers and encouraging them to refer their friends and family to your business. 

Your customer base always has access to a similar audience that would need and appreciate your service. When they refer your business to them, you gain access to a new audience base without much investment. 

And when the recommendation comes from someone who has transacted with the business, potential customers come in with an open mind as well. 

referral marketing program guide

Why does referral marketing work?

Referral marketing may seem like just one more strategy that aids business growth, but it comes with a lot of added benefits. It is known to be one of the most successful methods of customer acquisition, since:

  • It builds customer trust
    Getting customers in your business’ door can be challenging and expensive.  Potential clients have a lot of apprehension about working with a new business. But this reduces significantly when someone they trust recommends your business. The inherent social proof in this process ensures that you can build trust faster with a new client, improving lead conversion rates.
  • It builds brand awareness
    Advertising may help you build brand awareness, but it can be expensive with a limited ROI in the short term. Targeting the right audience can also be a challenge. According to Annex Cloud, 49% of U.S. consumers today say friends and family are their top source of brand awareness. When you invest in referral marketing, it provides a significant boost to your brand awareness efforts. 
  • It builds social proof Potential customers turn to their friends and family, favorite TV shows, influencers, and celebrities for recommendations. When your customers share their referral links, codes, and reviews on public forums and to their private network, it builds social proof. People are much more likely to buy from a brand with happy customers who are willing to refer.
  • It grows your target audience
    In referral marketing, the quality of leads is higher as customers understand your business and will only refer those who need your products. In this process, you may identify newer demographics who can be approached and grow your target audience. 

Referral marketing strategy examples

Here are several marketing ideas implemented by popular companies to grow their referrals for inspiration. 


In 2016, T-Mobile initiated its “Stock Up” program in which customers could earn a share in the company by being a subscriber and by referring new customers. T-Mobile users could earn up to 100 shares per year.

T-Mobile referral marketing snapshot

By offering such a substantial reward, the company revolutionized the referral program and grew faster than before. 

Evernote rewards program

Cloud notebook app Evernote rose to popularity through referrals and improved their conversion rate of moving free customers to paid customers. 

Evernote referral program snapshot

With their rewards program, users could earn points by referring friends. These points could be used to upgrade to Evernote Premium, get a 1 GB boost in upload limit, get event tickets, and more.

Koodo Mobile

Koodo Mobile’s referral program marketing strategy is simple. By referring a friend, participants both get $25 in bill credits and can expect to save upwards of $300 per year by referring more people.

Koodo referral marketing snapshot

By investing in a strong referral marketing program, the company reduced their customer acquisition costs while also improving customer loyalty with rewards. 

10 top referral program marketing strategies

If you are looking to implement the results in your business as well, then here are the steps to create a successful referral marketing strategy for your business. 

List of top 10 referral marketing strategies

1. Know when and how to ask for referrals

Generally, happy customers make for the best brand advocates. Ask for referrals when a customer leaves a positive review, after a repeat purchase or renewal, or when you receive positive feedback directly from a customer.

It is best to automate these processes so that you don’t lose opportunities while dealing with many customers across multiple locations. 

2. Go beyond customer expectations

Good products and exceptional customer service are just what your customers expect from you. To be remembered by customers and become referral-worthy, go a step beyond. 

Listening to customers’ needs, remembering special occasions like birthdays/anniversaries to share discount cards, upgrading their plan for a month, or offering loyalty incentives are good ways to exceed customer expectations.

When you grow a close relationship with your customers, they are much more likely to refer people to your business. 

3. Create a community around your brand

The more connected customers feel to your business, the higher is the success of your referral program. And building a community is one of the best ways to grow the relationship.

Invite your customers to participate in a conversation on your company blog or your social media channels. You can also set up an online forum to encourage user-generated content. Test different approaches to building a community around your brand and grow your referral program. 

4. Offer strategic referral incentives

The right referral incentive can skyrocket the leads that come from your referral program. It is important for every business to spend time and resources to find the reward for each program. Customers who are incentivized with the right reward are more likely to share your business with their friends.

Birdeye referrals help us set incentives for referrers. An example screenshot is shown here.

You can offer discounts, store credits, cash prizes, and other incentives like trips, gift baskets, and more to bolster referrals. 

5. Tap into social media

You can get more eyeballs on your referral marketing campaigns by sharing them avidly on social media. Users who see it may also share it on their pages, increasing exposure for your referral program.

Images  showing how Birdeye referrals allows customers to share referral links across social media channels.

Sharing the referral program details online also makes it accessible to a wider audience who may wish to become customers just to enjoy the benefits of the program. 

6. Use email marketing to promote referrals

Email marketing is one of the most effective communication channels, especially when you have to convey information your customers have to save for later use. Using emails also helps you track the results of your referral program and make changes as needed. 

You can incorporate referral links into your existing campaigns, be it purchase confirmations, initial follow-up, product updates, or otherwise. 

Related: Craft an irresistible referral email to boost your referral programs

7. Make it easy for people to refer

Complicated referral marketing strategies will slow you and your customers down. Keep it simple. Enable customers to share referral codes, referral links, or forms from the click of a button across all channels. 

Referral links are simple but powerful tools for getting your referral program shared. Customers can copy and paste them to social media, emails, blogs, and more. Since referral links are individual, the use of referral links can make it easy for you to track your top referrers.

9. Consider other types of referral programs

Besides customers, you can also tap into employees for referrals and set up a program specific to them. Additionally, you can invite hand-selected influencers to be a part of your ambassador program, complete with training materials and resources for your influencers to utilize.

10. Streamline your referral program with referral software

Take advantage of tools like Birdeye to simplify and automate your referral programs. This makes tracking and rewarding customers hassle-free.

Example screenshot of how Birdeye referrals allow customers to automate and manage referral requests

With Birdeye Referrals, you can automate your referral program so that every happy customer interaction is followed with a referral request. You can also craft personalized messages, track request conversion rates, and analyze the success of your program from a single easy-to-use dashboard. 

FAQS about referral marketing strategies

What is referral marketing strategy?

Any strategy that inspires your customers to refer others to your business is a referral marketing strategy. It works best by incentivizing customers with commissions, discounts, rewards, and early access for referrals.

What is an example of referral marketing strategy?

Girlfriend Collective’s pre-launch referral program saw them giving away $80 eco-friendly leggings to new customers. This strategy helped them grow and compete with big brands like Lululemon, Nike, and Adidas. 

How do you develop a referral strategy?

Consider your customer and how you can incentivize them to share your offering with their friends. Empower them with print materials or referral links they can easily share with their network. Track and reward referrals.

Use referral marketing strategies for maximum impact 

Referral marketing strategies ensure that your business is spreading through word of mouth. Customer recommendations are exceedingly influential when it comes to driving brand awareness and sales. Add the referral program marketing strategy into your marketing mix for maximum impact. 

Boost the success of your referral marketing strategies with an intuitive, customer-friendly, and powerful referral marketing tool – Birdeye Referrals

Check out the demo to know more today! 

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