How to use Referral Marketing to Get Ahead of Your Competition

If there’s one form of marketing that has taken over various industries, that will be referral marketing. It is one of the methods that worked for B2B and B2C alike. The reason why it is so effective is the power of referrers. People are more likely to take action on advertisements of people that they know. This works far better than business owners advertising their products to the public. It leverages personal relationships, and this is what makes it so effective.

Statistics don’t lie. According to, 82% of Americans look for recommendations from family and friends before they buy a product. 67% stated that they are more likely to buy a product once a recommendation is made by someone who is closed to them. And that’s not all. According to Nielsen, this applies to the general online population. 77% are more likely to buy a new product if their family and friends recommend it.

What Motivates People to Share

It is essential to have a basic understanding of what motivates people to share. This way, you’ll know what to give them to encourage them to share your products and services with other people.

Close Relationships

You can understand referral marketing well if you look at how people buy products based on recommendations. Put yourself in the shoes of your customers. If you see a new product, will you buy it right away? The answer is most likely no. But when a friend or family has tried the product or service before you, you will be far more inclined to try that product as well. This is how referral marketing works. It allows customers to ‘spread the word’ about a brand to family and friends. The preliminary relationship provides a higher likelihood of conversion.


You also need to give your customers a reason to share your products with others. This means that they should get some form of reward for doing so. This is why you need incentives. This is given away in exchange for the act of promotion. This can range from a gift, some cash, discount code, or even a free trial or subscription.

Brand Reputation

Will you buy from a company that you don’t trust? I don’t think so. This is also true for online businesses. After all, online transactions are often done based on trust. This is the reason why building your brand reputation is a must for online businesses. When a company has a good reputation, it is far more likely to get more sales. And it also motivates its customers to promote the products and services to other people.


Another reason why people share products and services is value. This happens when they found that a product is beneficial to their lives. This means that your product or service should improve the experience of your customers in some way. It is crucial to not only have an excellent referral system to promote your business. Your products and services should also be right in the first place.


Another reason why people share content online is emotion. This happened when a piece of content managed to ‘tug on the heart sleeves.’ This can generate feelings, such as happiness or sadness. This emotion is often the result of a story. Storytelling now plays a significant role in advertising, and you should also do the same for your business.

Now that you understand the science of sharing, it is time to delve into referral marketing. This will help you get ahead of the competition if done the right way.


Referral marketing can only be successful if it is done the right way. With this, you must have the requirements. In this section, you’ll learn the criteria that you need to have if you want to have a successful referral campaign instantly.

A Product or Service That is Worth Sharing

First, you need to promote a product or service that is worth sharing. This means that if one person sees it, he will most likely share it with his family and friends. This means that the product should be unique and should have a market value that is hard to ignore. How can you know if a product or service is worth sharing? Well, you can look at reviews to know if people are already sharing it. If they are, then that means that the product will probably generate the same word-of-mouth marketing if you shared it.

Positive Reviews

Before you launch your referral system, you have to make sure that you have enough positive reviews to show for it. If you have just launched a brand new website, then there is a limit to how much referral marketing can help you. With positive reviews, the growth of your referral system will be faster for people who will already have the social proof to support their promotions.

Tested Customer Support

Once your business gains traction from referral marketing promotions, you must have a customer support system in place. This will help you address problems as they arise and prevents your business from getting negative reviews from the campaign. It is essential to cover all bases by providing customer support across different forms of media. For example, you can have customer support through chat, but you should also be open to tackling concerns via email. Aside from this, you may also want to open yourself to messages on your social media channels. If you cannot manage everything, be sure to inform your customers about it. This way, they’ll know where to reach you when the need arises.

Converted Customer

You mustn’t do your referral marketing blindly. If you do it to anyone who visits your website, it will most likely result in failure. It is essential only to promote your program once a customer ‘crosses a threshold.’ This means that the customer is already sold on your products and services and is ready to buy. This is the reason why I support the promotion of referral systems on checkout pages. Here are some tips to create awesome checkout pages that convert more. This is where customers are already on the verge of buying. They will most likely help your referral system at this point.


As mentioned, one of the things that make referral systems so useful is the incentive. This motivates the referrer to take action. You must already decide on your motivation even before you launch your referral system. Prizes can come in various forms. It can be cash, a discount code, a free item, or a free trial or subscription. It is essential to choose the one that is most compatible with your audience.

Referral Software

Once you decide to launch a referral system, you’ll find that it can be quite hard to do if you don’t have referral software. This can help you do more than launch your program. It can also help you track the referrals made by your referrers as well as allow you to pay them in a single click. It is essential to look at the current platform of your website and choose an application that is compatible with it. You can also look into WooCommerce affiliate plugins and Shopify referral apps to get an idea.

Terms and Conditions

You need to have a system on when and how to accept referrals. This should be blatantly stated in your Terms and Conditions. You have to consider all the ways your customers can make referrals. You should exclude references that will not be beneficial to your business, such as fake emails and the likes. You need to have this sorted out even before you launch your campaign.

Who Will Get Rewarded

Another thing that you must consider is who gets the reward. In every referral program, two people take action. This is the referrer and the friend or referral. It is crucial to determine who you will reward. Will you reward the referrer who promotes your brand for you? Or will you pay the reference who just signed up for your program? It is essential to decide on this before you even start writing or launching your referral system.

How to Launch a Referral Program

Once you have completed all the requirements above, creating a referral system can now be done in a single click. Referral software will help you do this. You can learn from newly launched businesses who managed to make the most of this. Best Drums Set Labs can do this with success. What makes referral marketing special is its ability to lower or stop shopping cart abandonment. This allows eCommerce websites to get more sales.

How to Launch a Referral System that Will Get Ahead of the Competition

Marketing always involves competition. Business owners have ever searched for ways on how they can stand out from the crowd and get the attention of their potential customers. It will help you if you look at successful programs. This will give you some ideas on how you can stand out. Here are some of the best referral systems of all time.

  1. PayPal – PayPal is one of the most successful referral campaigns that have been done. It may seem that it is one of the companies that first utilized the idea. They gave away money for signups. The owner admitted that they are at the losing end at the beginning. But the business soon gains traction, and it has now become one of the top payment processors online.
  2. Uber – Uber, by itself, is a unique business concept. It is one of the businesses that introduced the idea of sharing resources with other people. It is one of the pioneers in the ride-hailing app industry. The reason why it gained so many users is also referral marketing. This allowed them to recruit drivers and riders to their system.
  3. Amazon Prime – Ever wonder how Amazon grew at such a fast pace? The reason is referral marketing. It is so effective that it continues to be one of the most used referral systems today.
  4. Tesla – Tesla saw the value of referral marketing right from the beginning. The business owner knows that they are selling to an elite market. Because of this, they chose to reward referrals with free products. Since their products are offered at premium prices, this is enough to motivate the market to promote the brand.

Referral Marketing for Every Industry

Referral marketing works for just about every industry. It is all about making it work for you. It works incredibly well for apps. It is the secret behind unicorn companies. It also works well for eCommerce. The discount code incentive model helps eCommerce sellers get more sales. There are also other applications. It works for digital products in the form of trials and subscriptions. The same is valid for services where customers can get discounts for referrals.

The success of your system will depend on your creativity. It is essential to think outside of the box and doesn’t rely on the classic model of referral marketing. You should aim to insert other elements into the mix such as referral contests and influencer marketing. Referral contests will give your referrers something more to look forward to while influencer marketing will help you tap an instant market of followers. Just be sure to tweak your program based on the preferences of the influencer’s followers.

Another way to make your referral system more desirable is to add an element of urgency. This is where you implement rewards on a seasonal basis. This creates a sense of urgency in customers. They will feel like they will ‘miss out’ if they don’t take action right away.

Also, don’t forget to integrate everything with social media. If you combine such a robust referral system with targeted social media marketing, the results can be astonishing. Social media promotions are often hyper-targeted, for you can choose the audience’s characteristics and interests. If you use this to promote your referral program, it can be powerful.

I hope this article has given you some ideas on how you can use referral marketing to get ahead of the competition. Referral systems are robust if used well. Be sure to fulfill all the requirements to ensure your success.

Unnati Vaidya is a freelancer Content Writer and SEO generalist. She is an enthusiastic reader of Novels and a big fan of watching Sci-fi movies and seasons!

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