Tweet
When you’re trying to find a new brunch spot, looking for another show to binge-watch on Netflix, or seeking out the perfect pair of jeans, where do you turn? Before you start researching options on your own, you’ll likely ask your friends and family for their recommendations—and trust those suggestions. This is why customer referral programs are so effective. If someone you know tells you to try a particular product or service, chances are you’ll at least consider it. Businesses know word-of-mouth marketing works, so many ask their best customers to serve as brand advocates and refer people in exchange for incentives (like a discount or gift). Both parties win when the new customer makes a purchase—the advocate gets a reward, and the company gets a sale. Customer referral programs can widen your customer base and generate ongoing revenue for your business. But before you start building one, set yourself up for success by learning the basics.
What is a customer referral program? Benefits of customer referral programs How does a referral program work? How to create a customer referral program Customer referral program ideas 7 great customer referral program examples What is a referral program? A referral program is a word-of-mouth marketing tactic where existing customers tell their friends, family, and colleagues about your brand, products, or services. Typically, the customer receives a Phone Number List reward from the company when the person they refer makes their first purchase. To encourage referral program participation, businesses will promote the rewards they offer—such as gift cards, ecommerce “cash-in” points, or branded swag. Customers who sign up can spread the word by sharing referral links or discount codes with people in their network. Benefits of customer referral programs Companies leverage referral programs because they’re beneficial for attracting new customers, establishing trust, and boosting sales.
They build trust According to a 2020 BrightLocal survey, 79 percent of consumers said they trusted online reviews as much as they trusted recommendations from their friends and family. But in 2021, BrightLocal reported only 49 percent of shoppers still felt this way. Within one year, reviews lost much of the value they once held (presumably due to fake reviews)—this makes personal recommendations more important than ever. People may not trust every random customer, but they likely trust their friends, family, and colleagues. According to a Sprout Social report, 71 percent of U.S. consumers’ purchase decisions are at least somewhat influenced by social media posts from people they know. They attract new customers at a low cost A referral marketing strategy allows companies to reach new users simply through word-of-mouth recommendations from happy customers. The only expenses come from any initial paid promotional efforts you make for kicking off your program and the rewards for your participants. So, referral programs have a lower customer acquisition cost (CAC) than most other digital marketing tactics. They’re revenue machines Semrush reports that word-of-mouth drives more revenue than paid ads and results in five times more sales.According to a SaaSquatch report, more than half of referral programs use credit dollars as a reward, and 90 percent of these programs equate a purchase with a “successful conversion.
What is a customer referral program? Benefits of customer referral programs How does a referral program work? How to create a customer referral program Customer referral program ideas 7 great customer referral program examples What is a referral program? A referral program is a word-of-mouth marketing tactic where existing customers tell their friends, family, and colleagues about your brand, products, or services. Typically, the customer receives a Phone Number List reward from the company when the person they refer makes their first purchase. To encourage referral program participation, businesses will promote the rewards they offer—such as gift cards, ecommerce “cash-in” points, or branded swag. Customers who sign up can spread the word by sharing referral links or discount codes with people in their network. Benefits of customer referral programs Companies leverage referral programs because they’re beneficial for attracting new customers, establishing trust, and boosting sales.
They build trust According to a 2020 BrightLocal survey, 79 percent of consumers said they trusted online reviews as much as they trusted recommendations from their friends and family. But in 2021, BrightLocal reported only 49 percent of shoppers still felt this way. Within one year, reviews lost much of the value they once held (presumably due to fake reviews)—this makes personal recommendations more important than ever. People may not trust every random customer, but they likely trust their friends, family, and colleagues. According to a Sprout Social report, 71 percent of U.S. consumers’ purchase decisions are at least somewhat influenced by social media posts from people they know. They attract new customers at a low cost A referral marketing strategy allows companies to reach new users simply through word-of-mouth recommendations from happy customers. The only expenses come from any initial paid promotional efforts you make for kicking off your program and the rewards for your participants. So, referral programs have a lower customer acquisition cost (CAC) than most other digital marketing tactics. They’re revenue machines Semrush reports that word-of-mouth drives more revenue than paid ads and results in five times more sales.According to a SaaSquatch report, more than half of referral programs use credit dollars as a reward, and 90 percent of these programs equate a purchase with a “successful conversion.