What is referral marketing?

At its core, referral marketing is about activating and stimulating your existing customer base to encourage your friends to try your product for the first time.

Word of mouth and recommendations are often confusing. While word of mouth is the result of customers talking to their friends about your brand and convincing them to give it a try, it is done without any marketing effort and is difficult for the marketing team to influence and measure.

 So what is referral marketing? Also known as Friend Referral Marketing, it seeks to leverage these referrals and introduce tools to promote, reward and track customer referrals.

Why is referral marketing so valuable?

Despite the proliferation of new media, it is increasingly difficult for marketers to reach audiences relevant to their brands.

 From a consumer perspective, we are inundated with marketing messages that are completely irrelevant to us. Of course, there is progress from media owners like Facebook in improving ad targeting, but it's still hard to beat the frenzy of competing brands.

The second big challenge is the lack of trust in mass advertising. A recent Nielsen report shows that confidence in marketing has declined over the past five years. A strong referral marketing plan can solve this problem.

Referral marketing delivers high returns for relevance and trust.

Word of mouth has good results for brand relevance;


When a friend shares a brand with you, they act as the best relevance filter. They know you and whether you enjoy getting to know the brand or not.

Recommendations are only given to trustworthy brands;


In addition, they will only share brands with you that they trust. They will not risk their reputation in front of you by sharing unreliable or poor quality brands.

From our experience running referral marketing programs for top brand friends, we've seen the value of referrals. They often spend more than subscribers from other channels and have a higher lifetime value. 

The key is to track the scheme and change it to maximize customer loyalty.

Is it time to add referral marketing channels to your marketing plan. Do you think?

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