Referral Marketing.

Referral marketing is the ultimate way to share with others the experiences you have had with an amazing product or service. Maybe you have had the most delicious Italian meal In your city or a fantastic customer service experience that made the transaction run smoothly. Whatever the company, product or service, you can share this with your friends so that they can benefit too. Not only will you be introducing others to a great service, but also you will generally earn a commission for asking them to join you in the referral program. This can take many forms such as a one time only money reward, a percentage commission of each sale the customer makes or free vouchers for yourself.

Whatever the reward you receive, you can take comfort in the fact that you are sharing something of value to others that will improve their life in some way. We have seen time and time again many failed attempts by marketers promoting a service that shows no real value to the end user. Just simply giving gift-cards away for a product that doesn’t make much improvement to the customer is not the right way to do it. Having blind faith and praying that the referral campaign will work by just using the method alone can spell disaster before the strategy as even started.

Researching your target audience, doing regular customer satisfaction and feedback surveys, product testing and strategy a/b split testing are just some of the preparations that you must take before even starting a referral program.

Below I’m going to go through some different methods that you can use referral marketing for your business with the customer in mind. It doesn’t matter if you are a large company or small corner shop, these methods can improve your customer loyalty rate and help you build a more friendly customer relationship.

Yes the budget for each company will be different and the software that is available to you but that shouldn’t be a barrier, they’re many solutions with features that suit all business sizes. Even new businesses or existing businesses can take advantage of referral marking and incorporate it into their small business marketing plan.

Word of mouth marketing.

Word of mouth marketing is the most simple but effective way to build your referrals up. Starting with family, friends, acquaintances, old connections and work colleagues is a great way to begin building your list. Here is my top ten tips to start building your list of referrals with word of mouth marketing

  1. Write a list of contacts. At the beginning of your word of mouth strategy write down all the people you know who you think would benefit from this offer. It is important at this point to be honest to yourself and list the real benefits that the offer would give them. The worst thing that you could do at this point is just share this offer with everyone you know, as this would might give you a bad image of a salesman/woman. You must share with the intent of helping the people around you and showing them how you can help them with this offer.

  1. List the benefits. Now that you have a list of people who you know will like to know more about this offer, its time to list the benefits. Make a list of all the things you like about this offer and then make another list of it as helped you. This will help you later when you are chatting to your contacts to tell them what you love about the product, how it as helped you and how you thing it will help them out too.

  1. Start with a conversation. Email, call, Skype, text or leaving a friendly message asking your contact how things are going for them. Once you have formalities out of the way, you can introduce them to the fantastic product that you have used. Tell them about the benefits of the product, how it made you feel, why you would recommend it for them and then show them the discount or referral offer for him or her to use.

    Tell them the story of how you found out about this amazing offer and that you were thinking of them at the time. We have all had moments when we are thinking of someone we know as we are experience new things, why not contact them to share he moment.

  1. Social Media. Wherever we are or whatever we are doing social media plays a huge part in our lives. Maybe that is sharing a funny moment on Facebook, capturing an event for YouTube, sharing a joke on twitter, taking breath-taking pictures for Instagram or venting your emotions out on Whatsapp status to friends. In this connected modern times we share almost all but the private details of our life. So why not use social media to share the amazing offer you have too.

    Once again, remember to not spam and message everyone about it. But you could like the Facebook page, share the promotional video/picture, take pictures of the product, do video tutorials showing how to use the offer posting it on YouTube and run free competitions to give away amazing prizes to all who use the offer. If the offer is time sensitive you could post details about the offer on your social profile pages before It happens. Then during the time the offer is active send out a tweet or update your status to remind your audience the offer is now in commence. This gives your audience the chance to refer the offer more than once, before and during the event takes place.

    The possibilities are endless with this option, just use respect, target the right people and help in your own way. The more social sites that you use the better chance you have for more eyes seeing your offer,

  2. Social groups. Google+, Facebook groups, Linked groups or other popular group platforms are a great way to find targeted people. These groups usually surround a particular topic so you already know that your offer matches the people in the group.

Join in conversation, make new friends, leave comments on posts, share related content or

start your own group. Before you know it you will have earned the respect of the group by sharing your views and sharing content that help the people in the group. Becoming an authority figure within these different platform groups can help you build your list of referrals fast while making new friends at the same time.

6. Blogs. Blogs are a fantastic way for you to share with the world your passion and the skills that you have to offer. Blogging about your passion makes it easier to write articles because you are the go to expert on this subject. Doing an article on the referral offer explaining the benefits, showing how to use it or apply for it with video, giving away free bonus E-book or materials related to the offer can be a fantastic way to give away value to your readers.

The traditional way of doing this is to first write the article, create a tutorial video, then set-up a sign up form so you can retain the email address of the audience to build your list, and then once they have signed up they will be able to download the referral offer plus the bonus you deicide to give away. Remember that all blog posts are easy shareable, so the more fans that you build the more likely they will share the content around social media giving you even greater chances of finding referrals.

  1. Newsletters. Newsletters are an informative weekly or monthly article that keeps your audience up to date with the latest company news, events, competitions, informational articles or the new deals you have to offer. They’re an amazing way for you to share with your audience another side to the company they didn’t know. It gives you the chance to be more personal and personalized to the individual rather than the masses.

They’re many ways you could use newsletters but these are the things I believe you should use them for at the start and throughout the development of your newsletter campaign.

  • Research by asking your audience what they would like to see more of on your site, this could enable you to act upon that advice to create future material/products that are tailored for your audience. Ask them what assistants you could provide for a great customer experience, what they like or don’t like about your site or material.

  • Give your audience tips and tutorials on how to use the product/service that you offer in the form of articles, videos and audio podcast. Sending them an email with a link to this can give that extra support your audience may need. This can also be a great way to promote other businesses products/services in your niche to earn affiliate commissions.

  • Email the latest news/events happening in your company and other industry related news. This could be service comparison charts with other companies, social events, latest product deals, competitions you are running and latest winners with testimonials by using a service like Aweber

  • If you have any vacancies in your company you could email the latest job offers you have and ask your audience to submit their CV and covering letters. This could save you time searching for candidates and also show a sign of trust you have with your audience by asking them first leaving a valued feeling.

  • If you have a podcast, videos and guides helping your audience then you could email them a mini email course. Cooking classes, language, arts and crafts or teaching any other subject through a series of emails is a great way to connect on a personal level with your audience. You could offer these courses in a series of twenty to fifty emails each having a different subject running through a email auto responder. All the customer as to do is pay for the course, then sign up for it with their email address and they will receive the pre-made email series.

8. Forums. Forums are all around the internet in many different styles, topics and sizes. Some choose to catering to a micro niche topic, others grow into huge communities full of a great discussions and debates. If you are a member of your industry type forum and become a regular valued member there, then you could attract other members to your offer by including a link in your profile signature. This signature is present in every comment you make on a forum post so it will be seen by all who read your comment. This is not only a great way to be helpful to your forum members but also a way to get more exposure to your offer. The more forums you join and the comments you leave give you greater chances of success.

However once again, don’t spam the forums and keep your comments helpful to the forum post.

  1. Classified Advertisements. Sites like Gumtree and Craigslist offer personal advertisements on an array of subjects. Job opportunities, items for sale, rental property and services for a hire a small selection advertised for offer. So whatever your industry type or offer is, you can be sure to find a subject in your category to advertise it.

However, most of these types of sites do not allow you to post affiliate links, so you will have to come up with smart ways around this to get the viewer to your offer page. But if you are simply using codes to track the promotion you could just ask them to email you for the offer code.

  1. Business promotional tools. Business cards, flyers, posters, branded merchandise, printed T shirts, pens, cups, hats, sunglasses and any other creative way to get the town talking about your amazing offer.

Types of referrers

When it comes to referral marketing you have to not only just think about how you will find new customers but what type of people will you use to find these customers. All people have different experiences with your company and some will be able to find customers better than others do. Some have experience, knowledge or know of your company reputation by reading reviews or having first hand interactions in the past. Below is a series of the main types of referrals that you can use to expand your customer base.

  1. Experienced Referrers – These types of referrers have experience with your product and know all the detailed company information. Not only can these people tell you all you need to know about the product but can answer any question about your company. This can be from customer support to the money back guarantee that you offer. These people usually are employees of the company or are experienced work partners. Every man/woman who as being apart of the company can use their contacts to bring more customers for you. You can help them by giving them promotional tools such as:

  • Business cards/vouchers

  • video interviews of the referrer explaining the benefits of the using your company

  • company merchandise like T shirts, pens, key-ring’s

  • Video tutorial videos on how to use or explainer video showing the quality of the product

  • Handy product guide book to hand out

2. Customer referrer – Loyal customers that keep returning to your business over a long period of time are a businesses dream. Maintaining a friendly relationship with these people is essential to not only keeping the relationship warm but making the prospect of referrals from this customer more likely. Asking them to simply fill out out a questionnaire can get the feedback rating from your most frequent buyers. Use this data to find out how you can improve your services catering to their needs. In return of you showing your appreciation of their custom, you can ask them to refer your products to family and friends. The promotional tools you can give your loyal customers are:

  • Free gift-cards

  • Free product samples

  • Few months free to your services

  • Cash reward vouchers

  • Free gift for sign ups

  • leaflets, brochures, guides, company newsletter/magazine

  1. Industry Experts – These guys are the visible experts that people reach out to when searching for solutions or answers to common problems in your industry type. These experts come in forms of blog owners, speakers, same industry business owners, researchers or hobbyists who have a community following. Reaching out to these people can have a huge impact on your business in terms of having more followers and also personal development. You can share ideas, form partnerships and collaborate together to make the most of both your communities. They’re many ways in which you can help each other but here is a few examples:

  • Take part in each others webinars offering your expert opinions and inviting both your communities to come together advertising both your companies offers

  • Do guest blog posts on each others websites offering some expert advise on a certain topic adding a link pointing back to your own website.

  • Create a company introduction video for email marketing. Send the promotional video to each others mailing list inviting them to your company.

  • Create a joint venture product that is free for the referred customer if they buy or sign up to both your companies.

  • Run competitions that involve all partnerships communities inviting them to know more about the winning customers company when the winner is announced.

  • Interview each other offering some insight into how your companies work in forms of a podcast or short video. Publish this to each others website and include it inside your company news letter to gain more customer referrals.

These are the main types of referrers that you can interact with to create unique ideas to find new customers for your new business. However, do try to do more research into referral marketing and come up with your own new unique ways of finding new referrals.

Types of referral programs

Gift cards

Free give away products to your most loyal customers maybe once or twice a year is a fantastic way to show your appreciation for their custom. Not only do you give them a free product but if they decide to ask their friends if they would like a free product too, you can gain influence in their circle of friends. Everyone likes the word free and when it comes from a close friend it means so much more on a personal level. It is this level that you want to touch your loyal customer and their referred friends. Just making this available to loyal customers only you can keep the costs low and only offer this for one or two referrals of your loyal customers.

If however this is a free give card to a subscription service or a recurring usable product, then you can offer this to a larger number of customers. The following methods work best with this type of referral practice:

  1. Free samples. If you are offering a product that is usable and more purchases of the same product will be needed In future then this method would work quite well. These could include beauty products, supplements, fitness supplies, food delivery or hobby crafts.

You start the program by offering your customers the chance to earn money by asking friends, family or connections if they would like a free sample of a product, The sample of the product is usually the full version and given away for free when the voucher code is redeemed by the friend. Once the friend redeems the voucher code and makes a paid purchase in future, the referrer gets paid a set fee. This usually works when the company is confident about the product and knows that once the customer gets a taste of it they will be coming back for more.

2. Product testing. When choosing a computer game to play sometimes we want to try the product before we buy it, this is why free demo’s or beta versions are available. Like the free sample method you give away your product but this time for a limited time period only. Users then get to review the product and you can film their testimonials. This is a way for you to attract more customers with the positive feedback and a tool your referrers can use to show the benefits of your product.

3. Buy one get one free. We all have encountered the buy one get one free offer but using it in referral marketing is quite rare. In this method for ever customer your referrer brings to your company, they get the buy one get one free offer. This offer is not to be available anywhere else and is unlimited to how many people the referrer brings to the company. For example, one of your referrers brings three new customers to your company so is entitled to three buy one get one free others.

Refer a friend

Using the refer a friend method you can offer one month free to your service or offer a discount to future purchases at your company. This is a reward base scheme that is simple but yet effective in gaining more customers from existing customers friends. This type of method is usually used for an existing company to keep customer loyalty. This can be done in many different ways but these are the ones that are most popular at the moment

  1. Recruiter system. In this method you earn a cash reward or discount for ever new customer you bring to the company. The more you refer the more you can usually earn and the bigger discounts are given to you. This also applies to the new customer who can join the program once they have made a purchase or opened an account. Some programs offer a hybrid system in which you don’t only earn a cash reward for referring a friend but also a reward if your friend refers someone too. Making an unlimited amount of refers who could build you a huge customer base.

  2. Value system. This method is the most simplest, for every new friend that opens an account with the company you will be rewarded a discount upon your next bill. This method doesn’t tell the customer about recruiting others and is purely aimed at referring a few friends only. You could also offer free gifts or vouchers for their next purchases with your company.

  1. Friendship system. In this method you call, email or contact a lead in a friendly manner explaining to them that a common friend of theirs recommended them to this offer. You highlight the benefits and experiences the mutual friend as had with this product or service then explain to them why you think it would benefit them also. You can find this formation from your mutual connection by asking them non-intrusive questions before you make the call to their friend. This is usually the most preferred method of the three as it provides a much higher success rate.

New customer offer

Offering good value for money starter packs is a tempting idea for new customers. If you have a subscription based service then offer the first year half price or the first three months free could give new customers a chance to test your service first for a free period or low price.

If your company offers paid products then why not start a discount club for new customers. The customer joins, gets a free welcome item and so many points to get discounts on future purchases. The free gift and point system is not only a great way to attract new customers but also shows value to the customer over time. The more points the customer acquires the more discount they get off the item. If you keep the points target easily achievable the more chance the customer will repeat buy one or two more items each time to receive the discount or free prize at different levels.

Affiliate marketing

Though affiliate marketing is a different type of program it still falls within the same category. Some people get confused to the difference between affiliate marketing and referral marketing so I thought I should include a small section to explain.

Affiliate marketing is a form of performance marketing in which affiliates promote a product in hope of a financial reward. This reward is dependant on the reward structure set-up by the company, this could be a percentage of the sale, a fixed lump sum or a recurring payment for a subscription based service. Affiliates join affiliate programs through companies that have one or affiliate networks in which affiliates join to promote different company products. The companies will join these networks to find affiliates to promote their product/services, so it a middleman company where both parties meeting to help each other. Usually with the network itself taking a percentage cut of all affiliate payments made by the companies.

The main difference between affiliate marketing and referral marketing is that affiliate marketing targets people who need the service for financial gain rather than looking for a relationship connection. The affiliate marketer is looking for targeted people who have a problem that can be solved with the affiliate program they are promoting. The referral marketer is usually a industry professional, loyal customer or a friend/family member who wants to share the experience they have had with connections.

Even that both marketers have different motives to why they are promoting the product, they’re both still familiar with the product/service they promote. Thus, you can use the methods that are written in this article for both referral marketing and affiliate marketing alike. Though affiliate marketing does have some of its own method and practices, which more information will be available for this on the website.

Places to promote referral programs


When searching for people to refer your product too the first place you should be looking is your contacts book. Chances are that you have at least one or two people you know that the offer would be perfect for. These two could lead into four and four could lead into eight. See how the small chain of people could become very long indeed if the product is useful and good quality for them.

People, Businesses people in general like to boast of anything goo that is happening with their business. So if you can offer something that will add value to their daily life and is risk free, chances are they will tell all their friends. Leading these friends back to you for the referral commission.

But the buck doesn’t stop there but is just the beginning of it all if you want to take your referral marketing seriously. Capturing all these peoples emails and creating a list that you can regularly send quality products too or offer personal assistance is the way to go. Becoming the go too guy/woman who is the expert is creating the authority and trust you should strive for. This what all top quality brands do and you should consider creating that factor too if you want to earn a good living from referral marketing.

Charitable and social events

Partnering your business with local community events offers you a platform to showcase your services or product. They’re many charities, sporting and music events you can alliance your business with to gain exposure. You can do this by offering to give a percentage of sales to the partnering business to sponsor them in return giving you a stage to present your business. Create flyers, posters and business cards for your partnering business/charity to give away to their audience. It doesn’t just have to be a percentage of sales, you can give a donation, help create the event or do a dual event showcasing the good both your companies can do.

With so many different companies in your industry and local community that need help, this gives you a unlimited amount of exposure other wise you may not have for your referral offer.

Webinars and speaking events.

If your company Is in a teaching role, provides a unique service or as a skills/experience within a certain industry, then you could hold regular webinars or events upon this. At these events you can introduce your company, your history, what you provide and the future expansion you wish to take. Highlighting the impact your company as on the local economy and how you help the community you serve.

These meetings are a fantastic place to recruit referrals as they will have the inside knowledge about your company the average customer will not have. They can go into depth about the benefits the product/service as for the customer and highlight the customer service, loyalty and brand recognition you have within the local community.

The people at these events are professionals, industry experts and employees of similar companies. So the type of referrals they bring to your company could be at a more loyal rate then the average customer referral. This is because they will know more about your company and will be referred by a trusted professional in your industry type.

Alternately, instead of just holding these events yourself you can attend other industry events of this type to gain more exposure for quality referrals.

Mastermind groups

Mastermind groups are not only a source of valuable information, partnerships and personal growth but only an opportunity to exchange connections. These connections can be friends that are in the same industry that have experience of referral programs or be customer exchanges if you have the permission for third party contact. Working together with these groups you can create a marketing strategy partnership that will not only benefit the parties that are involved but the customers at the different business.

This could involve:

  • Joint email marketing program in which all parties involved access the different customer data bases and email them relevant offers.

  • Joint affiliate program in which the parties involved ask their affiliate groups to promote their partners affiliate offers.

  • Joint webinars where all parties of the group that are industry experts are present and all do a presentation that influence their followers to join, buy or subscribe to the referral offer.

  • Joint sponsor events in which different companies exchange meeting and look for ways to help each other grow to serve their shared audiences.

These are just a few ways you could use mastermind groups to create ideas for referral marketing and help each other achieve personal sales growth.

Home based party events

If your business evolves around a catalogue of products or particular service, then holding themed style social parties could gain you more targeted referrals. It is targeted because you know the people who show up to this party are interested in this product or this particular topic. The event could be held at your residence or if you have created a group of people, you could take it in turns to hold this event at each others residence. The following are a few ideas on how you can achieve this:

  • Book groups are a popular event that takes place in many small communities around the globe. Each member of the group will get the chance to choose a book of reading, then in the following weeks the group will meet to discuss the book and try express their own ideas about the subject. This style of event could also be used for your own business to involve your customers more in the mechanics of your company. Holding weekly meetings with your top referrers asking them what could be improved about your business and get critical feedback into the thoughts of your loyal customers. They could be involved with the decision making on a new product or get ideas from them in how you could help their local community more with your services. In turn with this friendly style business, you are sure to attract more customers willing to take part in these events.

  • Coffee mornings are a comforting event that takes place once a week for the elderly to socialise and to make new friends. Though your target audience may not be elderly you could hold similar type meetings to give away free samples or give the chance for your referrers to make new friendships. These new friendships will always remember the place they met their new friend and may also become a loyal customer of your company if you leave the right impressions.

  • Charity fundraisers are an event welcomed by all who admire the charity you represent. A force for good can only ever be a positive thing helping others that are in times of need. Using your company to hold weekly or monthly events that aim to raise money for a certain charity not only gives you a new shining image but also shows the good ethics your company is founded upon. These events are a fantastic way to find new customers and referrers that want to help charity and benefit from the products you offer also maybe at a discounted price for taking part in the charity event.

  • Games night is usually where friends come together to play the game they all love to have fun and catch up on the past weekly events. If you can provide game packs to your customers to help them make the most out of their weekends offer gift vouchers to all who order one can be a fantastic way to leave first impression of your company. Those companies that go the extra mile to ensure that their customers have the support they need are the ones that always stick in the back of peoples minds – Virgin are an example of this in the UK.

Other Businesses

Other businesses of your industry type are all around you and you may always see them as your enemy. Actually taking the mindset of seeing them as your friend and maybe a partner is a much better approach.

Joint Ventures are a fantastic way for two businesses to work together on a project helping both your customer bases. You can reach an audience that before were not possible to engage and have share knowledge that might improve both your businesses. The way you can run a referral program with other businesses is to have access to their audience to offer them the deal you have.

This could an email to your partners email list, coupons in newsletters, leaflets send out in the mail, referral businesses cards with codes on them left in your partners shop or in locations where the customers have easy access too, free give bonus give-aways supplied by you once the referral purchases the item and much more possibility’s.

Referral marking Tips

If you are new to referral marketing I hope that you have found this article useful so far. Below I will give you my top tips to staying engaged and a to do list when starting out in referral marketing.

  1. Golden minutes – When you have just done a good job or received an excellent testimonial from customer, these are the few golden minutes you have the chance to ask for a referral. Most customers that are pleased with your service will be more than happy to spread the word around, so make sure you do it in these crucial few minutes as this is the time they are most engaged and happiest with your business.

  2. Offers – Before engaging your referrals make sure that you have a compelling offer that you know they would love to have. This offer must be tailor made to your target audience, so a little research must be done before hand to know the answer to this. A financial reward, free gift or extra loyalty points can go a long way in the start a of a new relationship.

  3. Call to actions – Your call to actions should be clear and easily visible be this a website or leaflets with QR codes. The call to action should be an offer, free gift or free subscription to your services. Make sure that is always available to go to whenever the referral feels ready to do so.

  1. Be personal – After your referral as purchased the product or referred someone else to the program you should follow up with a personal message to say thank you for this. Also offering a small discount or free gift along with their next order would also show a sign of being valued. We all liked to be loved or know that we are being taken care of in different areas of life, so take care of them in your specialized area.

  1. Refer other business – If you know your target audience well then you will know what other activity’s or services they might need in other areas of life. If you can point them in the right direction to other products/services they might find useful that can create a higher level of trusts and friendship. Not only are you offering a fantastic service along with your referral product you are caring for other areas of their life too. Also the bushiness that you refer them too will I’m be very happy too for the extra business and they might send some of their customers in return to you.

  1. Stay Connected – Research where your target audience hangs out and join the places that they do. This could be Facebook groups/pages,Google+, Twitter, YouTube, related forums,blogs, referral networks or any other social media platform. Having your finger on the pulse by staying up to date with the latest news in your market can help you answer the question or face the problems your target audience as.

  1. Always Ask – One of the main important things that all businesses must do but most don’t, is simply ask what the customer wants. The old saying the customer is always right goes a long way in creating a personalised feeling for them. Customers want to know that you value and care for their custom, so you must do all you can to make a lasting impression. The most simplest way to do this is ask what they want and conduct regular surveys to collect data.

  1. Create an email list – Creating an email list is one of the most important things you could do for an online or offline business. This list is a golden scroll of people that have interest or have bought from you before. These people are proven buyers and are more likely to buy from you again or refer your service/product to others. If you don’t capture those email off them then you will most likely never see them again as they will have forgotten you and moved on with a other company that as stayed up to dated with the times. You don’t need your own website, Just sign up to a service like Aweber and away you go.

Well that is all for now folks. Hope you found this beginners marketing guide to referral marketing useful and if you did, please share it around with others who it may help.

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