Referral Marketing

What is Referral Marketing?

Referral marketing is a structured approach to getting recommendations from existing customers. While word-of-mouth happens naturally, referral marketing actively encourages and rewards it.

Referred customers are more loyal and valuable than those from other channels.

Why Referrals Work

• Pre-built trust: Recommendations from friends carry weight
• Higher conversion: Referred leads convert 30% better
• Better retention: Referred customers stay longer
• Lower CAC: Cheaper than paid advertising
• Quality leads: Friends recommend to friends who fit

Referral Programme Types

One-Sided Incentives

Reward the referrer only.

• "Get £20 for each friend you refer"

Two-Sided Incentives

Both parties benefit.

• "Give £20, get £20"

Tiered Programmes

Rewards increase with more referrals.

• 1-5 referrals: £10 each
• 6-10 referrals: £15 each
• 11+: £25 each

Referral Programme Best Practices

Make It Easy

• Simple sharing (one click)
• Clear explanation
• Easy to claim rewards

Choose the Right Reward

• Cash or account credit
• Free products or services
• Discounts on future purchases
• Exclusive access or upgrades

Promote It

A referral programme no one knows about won't work.

• Email customers about it
• Add to website and app
• Mention after positive experiences

Track Everything

Know which customers refer, what channels work, and what rewards drive action.

When to Ask for Referrals

Timing matters:

• After a positive experience
• Following a good review
• When they've been a customer a while
• After they've expressed satisfaction

Don't ask immediately after purchase - wait until they've experienced value.