Referral Marketing: The Key To Business Growth

Reputation Staff Writer

Referral marketing is potentially the ‘golden goose’ of your business. Well-executed referral marketing schemes can ignite business growth, drive brand awareness, generate leads, and increase company revenues.

However, too many brands leave revenue on the table by not implementing referral marketing within their company, or conversely, they implement a referral marketing strategy but do so poorly. 

Read on to discover more about referral marketing, including what it is, why your company needs to adopt it as a growth strategy, and how customer reviews and social media are the bedrock of cutting edge referral schemes. 

What is Referral Marketing?

Referral marketing, also known as ‘word-of-mouth marketing’, involves attracting new customers through the recommendations of current happy customers. Providing incentives to customers to advocate your brand’s products or services is at the core of successful referral marketing.

While face-to-face conversations and personal recommendations between people remain a cornerstone of new business generation, the evolution of the internet means that significant conversations between customers take place online. Furthermore, it means that companies can digitise referral marketing programmes and customer incentives. 

For brands, the digitisation of referral schemes presents myriad benefits and opportunities, including automation, monitoring and reporting and multi-channel integration. These digital advantages will be explored later in this article. 

Why Your Company Needs Referral Marketing Schemes

A robust referral marketing strategy allows brands to build trust with their customers which in turn drives new business and revenue. The following referral marketing statistics reinforce the claim that referral marketing is a money-spinner:

How to Implement Referral Marketing Successfully

An optimally profitable referral marketing strategy is possible through digitisation made possible by our advanced software solution. 

With our platform, your brand could fully automate the referral process. In practice, this might mean sending out a ‘refer a friend’ SMS to current customers on your database. When the referred ‘friend’ visits a store or a venue, the referrer may then receive a reward in the form of an electronic voucher offering money off the next purchase. Renowned UK restaurant chain, Prezzo, uses our unique platform to implement such a scheme.

While Prezzo’s ‘Refer a Friend Reward Scheme’ sounds sublimely simple, any company wishing to follow their lead to generate new business via referral programmes needs to understand these several cornerstones of referral marketing:


Successful referral programmes are built upon a foundation of first-class customer experience. If your customers aren’t delighted with your product or service, they’re unlikely to recommend it to a friend, colleague or family member. Be sure to have the basics in place which include up-to-date business listings and a robust local search presence as these factors can drive store footfall.

Reach Out 

Business-to-consumer companies must strike while the iron is hot and send out review and referral requests straight after purchase to maximise the chances that your happy customer will recommend your business to their friends. 

There are several ways to deliver referral and review requests, including email and SMS. The latter could be a particularly fruitful method of requesting referrals considering that SMS open rates are reported to be around 82%.   

Referral requests and review requesting are inextricably linked in today’s marketing landscape. For instance, one could request a review from a customer and simultaneously ask them for a referral once they have left a positive review. 

What’s more, is that garnering online reviews will not only benefit your business’ referral marketing efforts, but it will also strengthen your companies reputation in a variety of other ways, including boosting presence in local search and elevating consumers’ trust of your brand. 88% of consumers trust online reviews as much as they do a personal recommendation and 72% of consumers trust local businesses with positive reviews

Encourage Referrals

Incentivise customers to make referrals through tantalising offers. Offers might take the form of discounts on the next purchase, but there are endless possibilities to how you could entice customers to refer their friends, family and colleagues. The key to selecting a customer referral incentive is to simply know your customer and the likelihood that they will make a repeat purchase. 

For those customers who are likely to make a repeat purchase, discounts are often the best referral incentive. On the other hand, those who unlikely to buy again (perhaps due to the product being a ‘big ticket item’), are more likely to be incentivised by a cashback scheme, for instance.  

If financial constraints prohibit the offering of incentives at your company, don’t be disheartened. You can still request referrals from customers who may be galvanised to recommend your product or service following a positive experience. The key here is to encourage and enable customers to take action when it comes to recommending your product or service to others.

Simplify Processes

Your referral marketing scheme should consist of simple processes for both your business and the customer. After all, time is money for your business, and customers don’t want to feel that doing your company a favour is burdensome. 

Reputation’s award-winning software enables businesses to deliver referral requests with ease. Via our survey and request modules, companies can efficiently despatch customer incentives via numerous channels, including SMS, email and social media. What’s more, is that you can fuse customer surveys with your incentive offer thus killing two birds with one stone; you’ll gain critical customer feedback while simultaneously incentivising them to refer a friend.  

Scrutinise Results

Any marketing or CX professional worth their salt will pay close attention to data to see what their referral scheme delivers for their company. As a minimum, it is critical to keep a close eye on open rates of communications where referrals are requested and to weigh this against the impact of the referral scheme on your business’ profits. 


Properly implemented and driven by our cutting-edge technology, referral marketing could be potentially lucrative for businesses like yours. A solid referral marketing scheme generates additional revenues by enhancing your brand over the long term by establishing its credibility and trustability in the eyes of consumers. 

Profitable referral programmes are built on the sturdy foundations of excellent customer experiences online and in-store. To succeed in gaining customer referrals, businesses must delight customers at each stage of the customer journey; request the referral at the optimal time; incentivise or encourage the referral, and continually scrutinise and adapt the referral programme to meet the needs of the business and demands of consumers. 

Discover how Reputation can ignite your referral marketing engine to generate more revenue.

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