Referrals are the key to scaling your business without impacting your marketing budget. Learn 10 effective ways to lean on your customer base and generate more referrals today!
Customer acquisition is a challenge. Standing out from the crowd, attracting leads, and driving new business require more and more creativity than ever before.
One effective way to increase your customer base without spending money trying to understand Google Ads or go viral on TikTok is… referral marketing. There's just one problem: How can your business get referrals without begging for them?
This article details ten effective ways to get referrals, as well as why referrals are such an important part of your overall marketing strategy.
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What Is A Referral?
A referral is a recommendation or endorsement of your business. Typically, referrals come from happy customers that are willing to share their positive experiences with others. This can be done through word-of-mouth, online reviews, social media comments, or other means.
Getting referrals is one of the most effective ways to grow your business, as customers are four times more likely to buy when referred by a friend. Plus, these referred leads have a 16% higher lifetime value on average. In short, referral marketing has become an integral part of the marketing process.
How Does Referral Marketing Work?
Referral marketing encourages existing customers to refer their friends, family, and colleagues to your business. Simple, right?
In theory, yes. But in practice, it’s not as easy as it sounds. Many businesses struggle to get referrals and beg their customers to help them land new clients. Don't worry — desperation is not the answer.
Instead, follow this simple 4-step playbook to start generating more referrals:
- Create goodwill through exceptional customer service
- Provide incentives to encourage referrals
- Leverage social proof and reward programs
- Automate the referral process
Again, easier said than done. But if you can hone your referral machine over time, you will begin reaping the many benefits of referrals.
Here are a few of the key reasons that referral marketing is so powerful:
- Referred leads convert 30% better than leads from traditional marketing channels
- Referred customers create a 25% higher profit margin
- Referred customers have a 37% higher retention rate
- 84% of consumers place some trust in product recommendations from friends, family, and colleagues
- Consumers rely on word-of-mouth two to ten times more than paid media
The data is clear — if you can get referrals, you can expand both your customer base and your bottom line. So, let's get into the best ways to do just that!
10 Effective Ways to Get Business Referrals
If you are sold on the power of referral marketing, the next step is turning theory into practice. Here are ten practical but effective ways that you can get referrals without begging for them:
- Perfect the customer experience
- Solicit feedback regularly
- Create an emotional connection
- Add a loyalty or rewards program
- Implement an advocacy program
- Nail the timing
- Offer direct referrals
- Share a referral template
- Create strategic partnerships
- Expand your network
1. Perfect the Customer Experience
Sometimes the obvious answer is the right answer.
Before you start implementing complex referral strategies, ask yourself the last time a customer said "Wow." If it's been a while, you need to start there.
If you can't wow your customers, the hard truth is that you may not deserve many referrals. Fortunately, there is no reason that you can't change this.
Take the time to listen to your customers, identify areas for improvement, and go above and beyond to meet their needs. Brainstorm with your team what a 5-star experience would look like for a customer. Then, think about a 6-star experience. Then, a 7-star experience.
Perhaps you can't deliver all of that value today, but this framework may help you recognize the steps that you can take to enhance the customer experience.
2. Solicit Feedback Regularly
There's no better way to ensure you are satisfying your customers than to ask them. After every customer interaction, from sales calls to onboarding sessions, take a minute to ask how you did.
By soliciting feedback regularly, you can identify areas of weakness, course-correct quickly, and ensure that your customers are happy. This, in turn, will increase the likelihood that you can get referrals in the future and continue to grow the business.
Feedback can also help shape the direction of your content marketing strategy. When you understand what your customers value and how they evaluate your performance, you can more easily craft content that speaks their language. This has tremendous benefits for your social media and SEO performance as engagement and conversion rates improve.
Flowium kicks off the feedback process shortly after a subscriber joins its newsletter.
By asking a few questions about the lead's interests and desired email frequency, the brand can tailor its communications to the individual and ensure that they stick around for the long haul.
3. Create an Emotional Connection
One of the best ways to get referrals is to make customers feel invested in your brand's success. This means creating an emotional connection that leads to customer loyalty and advocacy.
The key here is to make sure that your customers understand why you do what you do. Maybe it's to support a meaningful cause, fulfill a personal goal, or engineer a better future.
MasterClass makes its community feel included in its journey by thanking subscribers at every major milestone. The CEO himself sends out emails like the one below encouraging an open dialog and asking for suggestions from users. This type of engagement creates a sense of belonging and fosters a stronger connection between the brand and its audience.
Whatever the message is, ensure that it shines through in your marketing, in the way you communicate with customers, and in how you carry out your work. When customers see what matters to you, they can connect with the deeper meaning behind your business.
As a result, they feel like a part of the mission and are more likely to recommend your business to others.
4. Add a Loyalty or Rewards Program
To incentivize customers to come back, interact with your product, and refer friends, consider adopting a loyalty or rewards program. These programs are designed to gamify customer interactions so that your VIPs can earn points, get discounts, or receive exclusive goodies in exchange for ongoing engagement with your brand.
Plus, you can layer in rewards for referrals, so that customers have an additional incentive to share your product with their friends. This is a great way to get people invested in your success and encourage positive word-of-mouth.
The key is to design a system that rewards loyalty while still providing value to your customers. Get creative and think beyond discounts to see what you can offer that will really make customers feel like a part of the team.
5. Implement an Advocacy Program
An advocacy program is more direct than a rewards program — it removes the “gamification” aspect and encourages customers to refer your business to their network. The idea is simple: Get customers to talk about your product by providing them with the resources they need to do so.
Lululemon's ambassador program is an excellent example of a successful advocacy program.
They select local leaders, like fitness coaches and yoga teachers, to represent their brand in the community.
These ambassadors get access to new gear, exclusive experiences, and a network of fellow fitness fiends. In turn, they provide valuable word-of-mouth for Lululemon by talking about, wearing, and promoting the brand.
6. Nail the Timing
Timing is everything — especially when it comes to referrals. So get strategic about when you ask customers to refer your business. Pay close attention to the customer journey and look for the moments when customers are most likely to be excited about your product.
For example, if you're building out a new SaaS idea, consider sending referral requests to users that have recently left a 10 on your NPS survey. These customers are clearly your biggest fans and they're primed to spread the word.
And if you're an e-commerce brand, you may want to ask for a referral just after a customer receives their first order. This way, you know that the unboxing experience is fresh in their mind and you can tap into their enthusiasm.
7. Offer Referrals Directly
If you're in the B2B space, chances are you have experience with various service providers and vendors yourself. Stir up some goodwill by getting in the habit of referring your favorite providers whenever possible.
This is a great way to show appreciation for their work, build relationships, and create a positive cycle of referrals. As the brands you refer clients to take note, they are likely to return the favor when appropriate. This also presents an opportunity to network and make connections, which can open the door for new business.
8. Share a Referral Template
Referral templates are designed to make it easier for customers to spread the word about your product or service. These templates provide a starting point for crafting an email or social media post about why your brand rocks. The more friction you can remove from the process, the more likely you are to get referrals from your biggest fans.
Peloton takes this concept one step further by offering a "90-Day Free Guest Pass" for friends.
The fitness app not only provides a simple way for users to recommend their service, but it also makes onboarding a breeze by leading with a free trial.
9. Create Strategic Partnerships
Do you know of any companies or organizations that have a similar customer base or target market as you? If you operate in different niches, but your customers could benefit from using both services in tandem, consider forming a strategic partnership.
This type of arrangement can result in mutual referrals — where you get referrals from another business and also give referrals to them. Strategic partnerships are an effective referral marketing tactic because they connect you with an ongoing source of potential customers. Both businesses get to leverage the other's audience and tap into a new pool of leads.
10. Expand Your Network
The bigger your network, the bigger your pool of potential partners, customers, and referrals. Get in the habit of attending events, joining organizations related to your industry or niche, and building your professional network.
Investing in LinkedIn, for example, can open the door to premium career groups and educational resources you wouldn’t otherwise have. Not only will you get exposure for your brand, but you will also get the chance to build relationships and make valuable connections.
You can also reach out to influencers, bloggers, and other industry leaders in your space. Get to know these people by engaging with their work, sharing their content, and offering to help in any way that you can. This is a great way to open the door for future collaborations or referrals.
Referral Marketing Fuels Long-Term Growth
Referral marketing can transform your business — but it won't happen overnight. To enjoy the sustained growth that occurs when your customers bring you customers, you must commit to consistently building relationships, offering incentives, and showing appreciation.
It takes excellent customer service, strategic thinking, and a lot of hard work to get referrals. But if you put in the effort, you will be rewarded with loyal customers who spread the word about your business and refer you valuable leads. So get started today and implement these ten strategies to boost your organic growth!