Chapter 8: Referral Marketing

With so much activity taking place virtually, it is easy for a marketer to forget that in the end customers are real people. We have discussed the importance of building customer personas, so that you know who the actual person is behind that customer number. It is also easy to forget the ‘social’ part in social media. Humans are by nature group creatures, and despite all the virtual connections we make in today’s world, in the end we relate best to real human beings. All your customers have real, flesh and blood family and friends, as well as connections through social media, and referral marketing is about how to use those personal relationships to develop your business.

Referral marketing is a term used for what many people also call ‘word-of-mouth’. This is one of oldest ways of growing a business, where an existing customer tells someone they know to use your services. This method is so old that the idea it will be successful is simply taken for granted by marketers. There is not much modern research on its success, but the good news is that the research that does exist confirms our belief. In a study done simultaneous in Germany and the US in 2010 it was found that when referred customers were compared to ordinary customers, they made a higher contribution to company profits, had a better retention rate and were more valuable throughout their time with a company.

Ironically, as social media and virtual space have made marketers less aware of referral marketing, these same things make it so much easier to do, and much more effective. Although direct viva voce face-to-face communication is the standard for referral marketing, social media and the internet in general has made it much easier for people to make referrals and to a wider circle of acquaintances in their virtual spaces.

What are Referrals?

The basic idea behind referral marketing is this – you tell three people about your company, or you have three customers. Those three people each tell three more people, who tell three more people, who tell three more people . . . well, you get the idea. Referrals create a rippling effect that draws in more and more people. Compared to basic word-of-mouth, social media dramatically amplify the effect. Let’s assume you have 100 friends on your Facebook account, and 100 followers on Twitter. You share your company with them, and even if only a quarter of them share the news with their 100 friends, you have already reached thousands of people.


When we look more closely at these social media interactions, we immediately see how dramatic and effective this is. Look at the figures in this chart.


Almost every consumer feels that word-of-mouth recommendations are the main reason they buy a particular product or service. Once customers trust your company, three-quarters of them will recommend you. Another kind of referral that has become much more widespread with the internet is reviews. When a person posts a positive review of a product or service, they are effectively making a referral to everyone who reads that review. Despite some bad publicity over fake reviews, over 70% of people still trust online reviews as much as personal recommendations, and more than half immediately, without any contact with the company, trust it if they see positive reviews online.

Why Is Referral Marketing Important?

We spoke in Chapter 2 about branding, and how important it is in developing a credible business. With the development of referral marketing through social media, many marketers are now seeing it as more important than the branding done by a company. Instead, you brand has become what customers tell each other it is. So making your customers feel positive about you is now even more important.

IYour brand is no longer what you tell the consumer it is – it is what consumers tell each other it is.

What makes word-of-mouth so strong is the element of TRUST. The big benefit to your company is that people are hearing about you from someone they trust. People are much more likely to trust a friend or family member instead of a commercial or other form of advertisement.

Everyone is so exposed to advertising for every part of every day, that its effectiveness has declined. ‘Anti-corporate’ feelings are widespread. The world of business no longer holds the social status it once did. However, people still trust their family and friends, including their virtual ‘friends’, who may simply be a reviewer on a site they use. This means the referred people are more likely to come to your company bringing with them some trust and a sense of your brand. This in turn means they are much more likely to immediately begin following you on social media sites, subscribing to your blog or email, purchasing your services or products, and sharing you further afield with their own friends and family! The trust developed in this way is often called transferred trust.

There are other benefits to referral marketing that make it even more valuable. A customer who comes to you by a referral will buy more quickly than another type of customer will. This shorter sales cycle means improved cash flow for your business, and leaves you free to move on to the next customer.

You will also find that there is an enhanced presentation of your product or services to the referred client and that it goes more smoothly and is more effective. Now why should that be? The answer is simple – they already know something about your business from the referral, so they are already primed to receive more information and extract what they want more effectively from your presentation.

But wait, there is even more! Because of their transferred trust, these clients are less affected by pricing. People look for a lower price, or think they are being overcharged, when they don’t trust you very much. Once that trust is established, they believe your price is good, and they haggle less, and buy more promptly at the original price point. They are more interested in the value they gain than simply the dollars they spend.

Lead Generation and Referral Marketing

Generating leads is a fundamental activity for any business, but it is a term usually used to mean actively going out and finding new customers. It is the sort of thing done by sales staff, but it can also include any activity that brings new customers into a business, which is often how marketers use this term.

We can look first at basic sales where salespeople actively try to find new customers. Look at these figures for completion of a sale after contacting different kinds of potential customers:

  • 5% of people contacted by ‘cold calls’ buy the product or service being sold
  • 15% of people unexpectedly contacted by a salesperson who uses the name of a colleague of that person, buy the product or service being sold
  • 50% of people contacted by prior arrangement, and with permission to call, buy the product or service being sold
  • 80% of people who are personally introduced by a colleague to the salesperson, buy the product or service being sold

Let these figures sink in for a moment, and you will realize that the dramatic changes in sales you see here is a result of the salesperson and the prospect (the potential buyer) being connected through a third person (the colleague) who already knows the salesperson. This is the power of referral marketing at work. Referrals turn into revenue in such a dramatic way, that as a marketing manager you cannot possibly overlook their power to generate leads that in turn lead to sales.

If you think about it, every time you mention your company to someone, you are generating leads. In fact word-of-mouth and referral advertising can be considered forms of lead generation all of their own. Whenever you are representing or discussing your business with someone else you are spreading the word and creating the potential for more business.

Here are some useful tips you need to keep in mind if you want to generate plenty of leads from this kind of personal word-of-mouth campaign:

  • Be sociable, friendly, and interesting. No one is going to want to follow up on something you tell them if you act shy, reserved, negative, or just plain dull.
  • Be warm and always smile when speaking to others about your company, even if it is only to a friend or family member. If you frown or look depressed, no one will want to do business with you.
  • Use good body language as well as upbeat speech to portray the most positive image possible. If you practice this, you are sure to make a good impression.

Six Steps to Creating an Effective Referral Marketing Campaign

Step One: Deliver the Best Product and Customer Service You Can

This might seem at first to be an odd place to start, but it is not. Never forget for a moment that referrals only come from satisfied customers. Ask yourself – would you refer your Mother to a company that had given you poor service? You already know the answer to that, which is the point here. Customers only refer you to someone else, or write a good review, if they received a product they value, and experienced good customer service. You cannot expect an unhappy customer to refer your company to a friend, even if you bribe them with money. It will not happen. Therefore, the first step in your campaign must be to work on your product and customer service.

Having the best product is something that a business has more control over than you may think. Some businesses focus of price as the way to measure the quality of a product, but that is a trap that can lead you into lower and lower pricing, and lower profits.

Best Product

A better way to think about what ‘best product’ means is to consider its value to your customers.

The value of a product or service is not its price; it is the benefit the customer receives from having it. The ‘best’ product or service is the one where the value left after the price has been paid is the greatest. Consider this: because of branding, personal preferences and advertising, I as a consumer place a certain value on a particular pair of shoes.

You know the feeling – ‘Wow, I would pay $100 for that great pair of shoes!’ – even though you haven’t seen the price yet. When you see the price is just $80 you rush in and buy them, and think you have made a great deal. In another store you see a pair you like and think – ‘Wow, I would pay $200 for that pair of shoes!’ – but when you see they are $250 you are no longer interested. Even though the shoes in the first shop are cheaper, you see more value in them, and choose to buy them, not the more expensive pair. The same thing would happen in reverse, if the $80 shoes were $130, so price is not all there is to value.

Once you grasp this simple idea, you realize that what matters to your customers is the value they receive, not the actual price. This is why selling something too cheaply can be a bad strategy. You might have heard the story of the artist who could never sell her paintings. A friend told her to double the price, and when she did, people bought them. The price of art is entirely in the eyes of the buyer, it has no intrinsic value, so if the price is high, buyers automatically assume it is good and want it. The same idea is a work is selling everything – its value is in the eye of the consumer.

So to deliver the best product you have to focus not just on price, but also on making the product high-value. Think of how Apple has done this through a combination of good design and marketing that has given their brand status and desirability.

Best Customer Service

Delivering the best customer service is more straightforward, and something that can be a goal in every type of business. Customer service is something that should always be front and center of your business activity, because having satisfied customers is not just vital to grow referrals, but to keep your business alive.

Tips for Top Customer Service

  • Listen to your customers – This has to be the first tip, because it is the most important. If you are not listening carefully and openly to what your customer is telling you, then you cannot hope to give good service.
  • Know your customers – The way you handle problems will depend on what kind of customers you have. For instance, if you have a business in high tech, and your customers are ordinary people with limited knowledge, you need to tailor your language and instructions to them in words they can understand, not try to dazzle them with jargon.
  • Trust your customers – Even though there may be people out there who are trying to take advantage of you, never treat any customer as if they are. Always assume their complete honesty and integrity. Only if you later find some clear indication that they are trying to cheat you, can you act accordingly. However, given the power of poor reviews, it is almost always going to be better to ignore the possibility you are being cheated, and still give perfect service.
  • Validate the concerns of your customers – Always acknowledge what the customer wants and show you understand the problem. Never argue or put them on the defensive. Show you understand their frustration and feel for their problem. Often that alone will make the problem go away.
  • Say ‘Yes’ to your customers – Do everything in your power, even if it is at a cost to you, to give every single customer what he or she wants. The overwhelming majority of people are reasonable and fair, so treat them in the same way. Customer service staff should have some flexibility, and they should never be punished for going the extra mile and giving top service – even if it costs you some money.
  • Be fair when saying ‘No’ to your customers – On some occasions, you genuinely will not be able to satisfy what a customer wants. Perhaps it is outside your power, or perhaps they truly are being unreasonable. Always find the fairest way to say ‘No’ and always leave the customer with their dignity and as much as you possible can give them.
  • Give more than your customers expect – ALWAYS go the extra mile and add something more than what is being asked for – no matter how small. A tiny gift, free shipping, or even simply a kind word will do wonders for your reputation and bring those precious referrals you are seeking.
  • Appreciate your customers -Something as simple as saying how much you appreciate them bringing this problem to your attention, can really resolve a difficult situation. Whatever the outcome, make them feel appreciated for their time and trouble.

Step Two: Plan Your Referral Program

A referral program is a fantastic foundation for a word-of-mouth campaign, and these kinds of programs have become very popular with businesses, because they deliver good value for their cost. A referral program is where you offer rewards to existing customers who refer other people to your business. For example, you could offer a cash reward for each referral, a small gift, a discount on future purchases, entry into a privileged level of customers, or combinations of two or more of these things.

Before thinking about what system you might use, here are some general things you need to think about for whatever program you set up:

  • Your program should be set up so that is easy for your customers to understand. If customers are confused by how the program works, and can’t immediately see the benefit to them, they are much less likely to participate in it.
  • Market your referral program through as many outlets as possible. This should include both real and virtual situations. Some examples are; face-to-face meetings, social media networks, newsletters, blogs, forums, and on your website. If you have a bricks and mortar store, then make sure your program is advertised there too.
  • Keep the rewards for the program within easy reach of your customers. Although you can have valuable, hard to reach rewards, it must also be easy to get value for entry-level referrals. If it takes ten referrals to see any reward, most people won’t bother at all.
  • Offer something people actually want. Think about your customer personas and your brand in deciding what kind of reward to give. Not all rewards are created equal – it depends on what your customer’s value.
  • Segment your customers. Since most of your sales come from just your top customers, consider a program aimed just at them – your most loyal group. Since they seem to be the idea customer, perhaps their friends and acquaintances will be similar, and become top customers too. This is easy to do if you already have a loyalty program in place, since you have unique access to them.
  • Keep it simple for you – and for them. Even if you offer generous rewards, it is hard to get customers to actually go out of their way – and be in fact working for you – to bring in referrals. It should be very easy to make the referral.
  • Plan all the details before launching your program. This avoids confusion down the road and makes sure you don’t have to deal with complaints and problems. Be sure you can sustain the program – if you change the rules once it is up and running, you are asking for trouble.

Referral Program Rewards

The rewards associated with your referral program are the most important thing you need to determine. If your rewards are not desirable, no one is going to strive to earn them. Consider too how much work is involved for your customers.

There are two kinds of rewards possible in creating a referral program:

  • One-Sided Rewards – This can be a reward for the referrer, or for the person being referred to you. That is, you could offer your existing customer a reward, but equally you could give the reward to the new customer. Some people are happy to see their friends get something, without wanting something for themselves. Others will only refer someone if they themselves get a reward.

    These two slogans indicate the difference, and show how either approach could work for you:

    • Send your friends a gift! Send them to us and we will give them 20% off their first purchase!

    • Earn yourself a bonus! We give you $25 for every person you send to hire a car from us!

  • Double-Sided Rewards – This kind of program is a win-win for everyone. The new customer gets something, the referrer gets something (and you get something too – a new customer).

    • Send us your friends for a free gift with their purchase of a beauty kit, and we will send you a bonus package!

If you can design one, a double-sided rewards program is almost always going to be the best choice.

Types of Rewards

One of the most popular rewards is money, which you can offer in different ways. First, individuals can receive cash when they refer someone. How much will depend on your business, but it could be as little as ten cents or as much as $100. Obviously, the amount must relate to the value of the sale you are making, otherwise you are operating at a loss.

Having a way to give cash can be tricky, so instead businesses often give the cash as store credit, perhaps in the form of points. Many businesses use ten points to equal a dollar, although some use one hundred points to equal a dollar. The choice is yours. The benefit of store credit is that the purchase stays with you, so you get some of the cash back again. For each individual referred, someone could then earn a certain number of points, perhaps between ten and a hundred, depending on how your program is set up. If you already have a loyalty program, the referral can give points to it.

Another way to reward your customers is to allow them to earn products – freebies as they are often called. This can be as simple as a gift package, or you could allow people to earn a specified number of points based on how many referrals they bring in. Then you allot a specific number of points to each of the products that your customers can potentially earn. Another idea to consider is whether the points will be a steady or a tiered number. A steady number means that people earn the same points every time, no matter how many people they refer to you. A tiered number would allow them to earn more points per referral as they bring in more people. For example, the first ten referrals might be worth 100 points, the next ten worth 150, the next ten worth 200, and so on.

If you are an ecommerce business, shipping costs are often a disincentive to buy, so giving free shipping as a reward for referrals – or as the reward to the new shopper – can be very effective.

In some businesses, an effective reward could be a donation by your business to a popular charity. Some kinds of customers feel uncomfortable taking a direct reward, but love the virtuous feeling of giving to charity. It all depends on the profile of your customers. This kind of reward also builds the brand of your business.

Encourage the Referral

There are two main reasons why customers are reluctant to make referrals, even when they love your company. You need to overcome this reluctance if your referral program is to be a success.
Who do I refer? Customers may not know who is a good choice among their friend to refer to you. You can help them make that decision by wording the program in a way that guides them towards the type of person who you want as a customer.

For example:

  • Send us three stylish friends and get free delivery on your next purchase!

  • Give the chocolate lovers you know a bonus bar with their first purchase – and get one yourself too!

I don’t want to spam my friends! If customers are not sure about the value of the goods to their family and friends, they may feel they are just bothering them. Again, wording your appeal well can overcome this.

  • You friends will thank you for the free gift we give them with their first purchase!

  • Why should your family miss out on our great deals? They will love the free shipping we offer them.

This is also an area where having high value good pays off, since people are happy to refer the best products to their friends and family.

Use a Landing Page

A great landing page is vital to the success of your referral program. A landing page is a page on your blog or website where people will ‘land’ when they click on an advertisement link. This will be the first place your new customers come to after they are referred, so it needs to send out all the right messages and encourage that first purchase.

The page should contain useful information on your referral program, as well as information on your company and what sets you apart from the competition – a clear picture of your brand. Optional but useful items to include are links to your social media, contact information, and links to relevant blog/article posts your customers may find useful to learn more about your company.

Step Three: Begin with Friends, Family, Neighbors, & Co-workers

Now that you have planned everything, you have a program in place that will reward people for referring others to your business. Now you need to start spreading the word. Promoting your referral program is also a good opportunity to promote your company in general. The best place to start doing this is with your friends, family, neighbors, and co-workers. These people interact with you almost every day, and they already know you as an individual. This means they are more likely to trust you and follow up on something you ask them to do.

When speaking to your friends, family, neighbors, and co-workers, explain what your company is all about. What products and services do you provide? What makes your company stand out from the competition? Explain your referral program, and ask them to tell at least one or two people about your company as well.

Review Programs

Another great idea is to ask people you think would be particularly interested in your products to test them. Offer one or two free items in return for written reviews and telling others what they thought about them. The great thing about this option is that those who have tried out your products and liked them will be more confident and sincere when referring others. As we saw at the beginning, people trust reviews almost as much as they trust referrals from people they know, so having good reviews on your site, as well as on outside sites, is a great referral program in its own right.

It is fine to give free items in return for reviews, or encourage reviews by some other kind of bonus, but never put up a review by someone who has not actually used the product or service you offer. It is actually very difficult to write fake reviews, and customers will usually see right through them. This can really hurt your company’s reputation and destroy your image and the work you have done on branding.

Step Four: Get the Whole Company Involved

Your company may vary greatly in size. It may be just you, or you and one other person, or it may have hundreds of partners or employees. No matter how big or how small your company is, get everyone involved in your word-of-mouth campaign. This will greatly expand your campaign’s reach, even before you start promoting it online.

Think about it like this: If you tell three people about your company, who then tell three or four people about your company, you have a total reach of around twelve people. However, if you and two of your employees tell three people who tell three people, you have an estimated reach of around thirty-six people. That one extra employee helping to refer people to your company can make a big difference.

Step Five: Go Viral

A big part of promoting your campaign and spreading the word about your company is to take it viral. By ‘viral,’ we mean taking your campaign online, where it can spread rapidly. This is different from when you were just telling people you knew to check out your campaign, but it is still very simple.

Where to Share

Social media, such as Facebook or Twitter, are an obvious first option for sharing your company online and promoting your referral program, but there are other places to share as well. Your blog, website, forums and other professional’s blogs are also great places.The point of a word-of-mouth campaign is to get other people talking about your company, so everything you share with your following should be designed to do that.

6 Tips on Sharing

  • The bulk of what you share should be centered on your referral program since this is the big incentive your customers have to refer their friends and family to your company.
  • Be interesting, unique, and engaging in everything you post.
  • Let your customers know you appreciate them. This will further prompt them to invite others to your company.
  • Use all channels at your disposal for the most effective word-of-mouth campaign. Just ensure you are tailoring your efforts to each channel’s way of communication. For example, graphic posts will be needed for Pinterest and Instagram. Short, informative posts will be needed for Twitter. Full-sized articles promoting your word-of-mouth campaign are necessary for your blog and website.
  • Engage customers who comment on your posts. Remember that engagement is extremely important.
  • Besides full out word-of-mouth posts on your various channels, you should also include some calls to action on your other blog and website articles.

Step Six: Keep It Going

Now that your campaign is off the ground, you need to keep it going so you may gain momentum. Try to tell at least one new person about your company every day. Mention it to the guy standing next to you in line at the coffee shop, or the person sitting next to you on the bus. Tell your new neighbor, or your cashier. Just tell someone! That is what word-of-mouth is all about. As long as you can continue doing that, you can keep your campaign moving forward.

There are also many opportunities in the daily working of your company where you can promote your program. Here are some places to mention your program that you might not have thought of:

  • When an existing customer comes onto your site, show a reminder , like a banner ad, that they can make a referral to some friends. Since they are probably coming on thinking of shopping, this is an ideal moment for them to save some money on their next order by making some referrals.
  • Include a link to your referral page in every email you send to customers, no matter what the subject. This link can simply be part of the signature.
  • Use order confirmations and receipts sent as emails to promote your referral program. Even before that – when the purchase confirmation and ‘thank you’ comes up after an order – include a request for a referral. This could even be a partial refund if the referral leads to a sale.
  • Send follow-up emails timed to arrive after customer s receive their purchases. Use these messages to assess customer satisfaction and ask those satisfied shoppers to refer your site to a friend.
  • Include the option to share the link with a friend on all your product pages. When browsing people often see things that remind them of someone else’s needs, and being able to send the link easily can lead to a new customer.
  • If you have a loyalty program, you probably already send regular summaries. If your referral program offers more attractive rewards, include a comparison of what they could have saved by making some referrals.
  • Snail mail is seen as outdated by many, but there are still people who like to receive mail. A simple postcard mailed to all your customers promoting your referral program could get lots of attention.
  • Keep Your Referral Campaign Current

    Remember your campaign does not end once you set it up and get it off the ground. There are things which must be done daily, weekly, monthly, and annually if you want your word-of-mouth campaign to remain up to date and effective. Here are some of the things you need to do.

    Do these things every day to keep your word-of-mouth campaign relevant and effective:

    • Tell one person about your company, products, and/or services.
    • Share one or two posts about your referral program or company information in a way that prompts sharing.
    • Respond to at least five comments on your various posts across all channels.
    • Like all of the comments on all of your posts related to your word-of-mouth campaign.
    Do these things each week to keep your word-of-mouth campaign relevant and effective:

    • Check the landing page of your referral program for accuracy. Make sure that every link included on the page goes to the right place.
    • Write at least one blog post and one article for your website about your referral program and/or word-of-mouth campaign.
    • Follow up with your employees to see how they have been helping to move the campaign forward. You could do this by asking for a report once a week, or just by asking a few employees each week personally. Staying involved with their part in the campaign will help them to do better.
    Do these things once a month to keep your word-of-mouth campaign relevant and effective:

    • Create at least one email highlighting your word-of-mouth campaign and/or referral program. (Note: You don’t want to put this in all your newsletters. Instead, ensure that at least one each month is dedicated to highlighting your program.)
    • Follow up with anyone who was testing samples of your products or services. If they have not yet left a review, or sent an email to you letting you know what they thought, you should ask them how they are enjoying it so far.
    Do the following things each year to keep your word-of-mouth campaign relevant and effective:

    • Look at what has or has not worked in the past year, and update your referral program accordingly. Sometimes rewards will need to modified, or even how they are earned.
    • Be open to new possibilities each year, but don’t change it too much, especially if this changes the terms for those already accumulating points.

    8 Tips for Success

    To get the best you can out of your referral campaign, follow these tips and watch your program succeed:

    1. Keep your customers in the loop. Sharing important information will make them feel as though they really know your company.
    2. Offer trial products from time to time. This will help customers on the fence to make up their mind about your products or services. People will refer your company with more confidence and enthusiasm if they can try out one of your products or services first.
    3. Keep your message short. People are less likely to read lengthy posts on social media, so short messages are more likely to succeed. This does not apply to blogs and articles, where we have noticed before that longer is better.
    4. Treat every single customer with the utmost respect. Just as one good customer experience can prompt plenty of new customers, one bad customer experience can cost you many more.
    5. Have the courage to be weird. The more outrageous thing your company does, the more likely it is to be remembered. Do you have a strange product or a bizarre service request? Did a customer tell you an off-the-wall marketing idea? Don’t be afraid to use them! They will often bring you lots of good publicity and even go viral.
    6. Use everything at your disposal. You have many valuable word-of-mouth tools available, such as employees, social media, blogs, websites, friends, family, neighbors, co-workers, and calls to action. These are all valuable and no single one is more important than any other is. Utilize them all for the most effective campaign possible.
    7. Don’t just post – engage with your audience. Use media as a conversation, not a loud-speaker. The happiest customers are those who feel noticed by you, and who have a positive, personal experience.
    8. Keep your referral program simple, and the rewards easily achievable. This is always worth repeating, because it is so important.

    5 Things to Avoid

    If you want your word-of-mouth campaign to be effective, these are things to avoid doing:

    1. Never be rude or aggressive. Talk to people about your company, your program, and anything else your campaign is built upon in the politest way possible. Their choice to share that information or not is theirs alone to make, and the more you push the less likely it is that they will have a positive feeling.
    2. Don’t lie. If your company doesn’t offer something, you don’t. If you don’t plan on coming out with something in the near future, then you aren’t. Telling the truth is always of the utmost importance.
    3. Never ask anyone else to lie. If someone doesn’t believe your company, products, or services are worth mentioning, that’s okay too. Find someone else who thinks you are great.
    4. Never bash another company to make yours seem better. Talk yourself up, but never talk a competitor down.
    5. Never make rewards difficult to obtain when setting up a referral program.

    Your Top Priorities

    While everything in your word-of-mouth campaign is important, not everyone has the time to complete each task every day. Especially in a small company, you will have many priorities to juggle. If you have just five minutes each day to dedicate to this program, here is what you should do in those five minutes each day.


    • Tell one person about your company. This can be anyone – just make sure you tell someone. (Estimate Time: 2-3 minutes)

    • AND

    • Share one post about your campaign on social media, your blog, or your website. (Estimated Time: 2-3 minutes)

    Getting Professional Assistance

    Outsourcing is a popular way to get more work done for less money and in a shorter amount of time. With a professional, you will receive higher quality work with a much smaller margin for errors. Things will be done right . . . the first time. Here are some tasks associated with your referral campaign for which most experts would advise hiring a professional:

    Graphic Design
    The landing page, and any material you distribute, should be well designed, in keeping with the brand image of your company. Doing modern, eye-catching graphics, even on something as simple as a referral flyer, is difficult, and a professional designer will come up with material worth everything you pay for the work – and more.

    A marketing consultant can see your business from outside and with their training and experience, they will come up with ideas that you would never have thought of. Finding the best balance of rewards and benefits can be difficult, and you want to be original, so some sessions with a consultant will work wonders for your program.

    When Will I See Results?

    Results can vary drastically, so it can be very hard to determine how long it may take you to begin seeing them. It really depends on how much time you invest, how many people you tell, how far you stretch your campaign, and how well you set up your referral program. Obviously, the more time you put into spreading the word, and promoting your program, the sooner you will see results.

    For the average person some momentum should be visible anywhere between one to four months after launching your campaign. You may notice more new customers, more repeat customers, and more hype surrounding your company. You may also notice more newsletter subscriptions on your blog, more website views, and more followers on your social media. Even better, you may notice that your company is shared, both online and off, more frequently. These results will continue to grow and expand as your campaign gains more momentum.

    How to Measure Success

    There are numerous ways to measure the success of your word-of-mouth campaign and referral program, and all of them are simple. Ask yourself the following questions to find out how well your campaign is doing:

    • Do more people know about my company, as well as the products and services it offers? The simplest way to track this is to see how many hits you get on searches. How many times is your company coming up? How many reviews are people leaving? How many shares are your posts on social media getting?
    • Are my likes and followers on social media accounts rising? If the answer is yes, you know your campaign is successful.
    • Is there an increase in the number of people subscribing to my newsletter? If there is you are doing well. If not you need to take stock, work harder at your campaign or make some improvements.
    • Do I have more page views on my blog and website? Look at your analytics, which is at the top of your home page, or on its own page. If you are unsure of past numbers, you should be able to see that on your chart (found at the top of your analytics). Look to see if your numbers have been rising or falling.
    • Are people signing up for my referral program? This is a big one. Your word-of-mouth campaign will be strongly based around your referral program. If people aren’t signing up, then the program will not do you any good. Time to take another look and see what is going wrong.
    • Am I making more sales? In the end, all marketing is about making sales. If your word-of-mouth campaign isn’t helping you increase your sales, then something needs fixing. Begin by going back to the first step and look at your product and customer service.


    In this section of the course, we covered the following topics. Make sure you understand them all before moving on to the next section:

    • What are referrals?
    • Why is referral marketing important?
    • Lead Generation and Referral Marketing
    • Six Steps to Creating an Effective Referral Marketing Campaign
      • Deliver the Best Product and Customer Service You Can – start with the basics
      • Plan Your Referral Program – get the right plan from the beginning
      • Begin with Friends, Family, Neighbors, & Co-workers –use everyone you can
      • Get the Whole Company Involved –it’s their future too
      • Go Viral – use social media creatively
      • Keep it going – perseverance counts
    • Keep your Referral Campaign Current
    • Tips for success
    • Things to avoid
    • Your top priorities
    • Getting professional assistancewhy professional help pays for itself
    • When will I see results?
    • How to measure success


    Word-of-mouth marketing might be old-fashioned, but it is still an entirely relevant form of marketing offering many benefits for your company. You can increase your primary audience, boost sales, and gain a strong customer following, amongst other things. Word-of-mouth costs little to nothing, so it is a perfect marketing tool for companies of all sizes. A referral program takes it much further and can boost your sales and company image. By using the methods described here, you can be successful with this important form of marketing.