How to Create a Referral Marketing Program That Works

For every business, it is imperative to have a good relationship with your customers. It’s not easy to make your customers happy without putting in extra effort, and since they are the lifeblood of your business, it becomes mandatory to create a and executive a strategy that helps you to cater to them to boost your business.

If you executive your strategy correctly and you have a good customer base and trust among your advocates, then a referral program can leverage the happiness of your customers and translate into new customers.

In this article, we will learn how to create a successful referral program that works.

But before we move forward, let’s learn about its basics. First, let’s define the concept.

What is a referral program? A referral program is a part of marketing as it involves the strategy to attract new customers for building goodwill as well as expanding your customer base. Your customers refer others back to your program and earn incentives and rewards for those referrals that they send your way who ultimately convert into customers.

So, how do you get started running a referral program? Let’s look at the steps.

What kind of steps are involved in a successful referral program?

  • Plan your goals.

Before launching any referral program, you must be clear about what you plan to get out of the program. Conversion is the ultimate goal of any business. These conversions can be different for every company. Some businesses want to increase email newsletter subscriptions, some want more platform signups, and some want to sell more products. Make sure that you have a clear understanding of how you want to shape your referral program so that you can ultimately achieve the right goals.

  • Make a list of your potential sources.

In a referral program, the most critical source is its existing customers. A company’s existing customers work as advocates who support the company to connect with potential customers.

Advocates play a crucial role in spreading the word because they are already using the product and have a favorable view regarding your brand and its products and services. Make sure you include all your most loyal customers on your list of targets for becoming referral sources.

  • Target the right one at the right time.

Making a list is not enough; you have to target your potential customers in the right way at the right time. Although loyal customers can promote your business by word of mouth without even asking anything in return, you’ll likely need to reach out to them with the right message and at the right time..

Let your customers know how much you appreciate them and make them feel valued, and they are more likely to promote it. Ask them shortly after a purchase (provided they are happy with your products and services) so they still have a fresh connection with your brand. Don’t sound selfish while promoting your brand; make them feel that they are essential that why you have approached them.

  • Determine your incentives.

Incentives are the central part of your referral program. There can be different types of incentives, don’t go for budget-breaking incentives; in fact, decide which kind of incentives will help you most and don’t just spend for the sake of spending. There are two significant points that you should keep in mind.

First, you can give the product as an incentive. For non-users, allow them to use your product for free as long as they continue to put active referrals on your platform or convince them to buy your products. Second, you can incentivize by offering a % of each sale or a certain present amount of money for each sale. Using a mix of both can activate both customers and non-customers.

  • More than one reminder.

Just one single outreach likely won’t get your point across. You have to remind your prospective referrers about your referral program. Use emails, social media, or whatever type of communication your audience prefers to keep the message in front of them.

Emails are informative, and catchy headlines will ensure more prospective referrers open the emails.. Send a text about the exciting prizes or using other enticing language. Social media is a great method of communication and can help you reach mass audiences with fewer messages.

  • Track the progress.

Tracking enables you to analyze the performance of referrals, like who has referred to whom, did they get converted, and a lot more. Have a CRM in place to tracked your referral sources and compare which referrers are high performers. Tracking is critical to allow you to make changes or create new incentives to push people to do better.

  • Don’t forget to show your appreciation.

After completing the process of the referral program, don’t forget to thank your loyal customers for their efforts. Say thanks to all your referral sources, as well as your referees for joining you.


Make sure that you focus on every step equally as they all are essential to your success.

Customers are the soul of every business, so make your products reliable and your services better so that you can continue to grow your base of loyal customers and they will continue to help you grow.

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Shivani Goyal
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