All about Referral Marketing: What It Is, Its Benefits And 6 Ways To Apply Referral Marketing


All about Referral Marketing: What It Is, Its Benefits And 6 Ways To Apply Referral Marketing

Learn how to turn every happy shopper into an unofficial seller

Marketing is about communication like Blue World City. Mainly about value communication.

The marketing can happen even if you do not perform any conscious investment in this area. If you create a valuable product or service and market it, people are likely to start talking about it.

The marketer’s job is to influence this process, ensuring that everyone knows how much value their product or service is.

Thus, Referral Marketing (or referral marketing) are strategies to encourage your customer to talk about your business to friends and family, becoming another sales channel.

We’ve all told our friends about our shopping experiences.

In this process, the role of the marketer is to intensify this “word of mouth”, ensuring that more people talk about the amazing products and services they have purchased.

This involves implementing some incentives. The challenge is to ensure that these interactions are always timely, useful and relevant.

People like to brag about their good experiences.  And this is an easy way to market your business.

Companies that use Referral Marketing definitely enjoy the benefits. Not only is it more profitable than traditional marketing, but its reach is quite remarkable.

Typically, customers tell friends that they think they’ll be interested in your business. That means you don’t have to work hard to find these people.

If each referral becomes a customer and each of them shares things about your business with all of their friends, you will essentially create a new community of customers.

Consumers trust their friends more than their salespeople.

“But how to use Referral Marketing?”

The process for applying Referral Marketing has become much more efficient and easier due to the various software and platforms for this purpose, such as BuzzLead.

Furthermore, this software and platform can be implemented in your marketing strategy without creating friction with the programs already used.

You still haven’t discovered all the sales potential from your own customers? Know that you are facing a sales channel too profitable to be left to chance.

Why invest in Referral Marketing?

According to a survey conducted by Buzzlead, 92% of consumers around the world say that they completely trust the referral of a friend or family member, above any other form of advertising.

Still, many Marketing VPs forget about this strategy and fail to encourage their potential “seller customers”.

Startups like Dropbox, Uber, AirBnb, PayPal, Netflix, Amazon Prime and Evernote have long used Referral Marketing as their main acquisition channel.

But don’t be scared! Referral Marketing is suitable for any type of company (B2C, B2B), for any type of product and at any stage of maturity.

As well as the best Growth Hacking strategies, Referral Marketing also relies on the analysis of consumer behavior.

According to Aristotle, “man is, by nature, a social animal”. Therefore, speaking well about something that pleases you or something that you dislike is something organic for us, you just have to look at the people around you.

Dave Mcclure, one of the most active startup investors on the planet, created a basic growth framework called AARRR. This means:

  • Acquisition
  • Activation
  • Retention
  • Revenue
  • Referral (indication)

referral marketing funnel

When faced with the challenge of selling more, we are tempted to always think of the funnel top. Attract more traffic, go viral, generate more entries, etc.

But a smart solution can be closer than it looks and cheaper than you think.

The Benefits of a Referral Marketing Strategy

Investing in Referral Marketing can be very smart. But, contrary to what the sentence that starts this article suggests, it should not be left to chance.

Some benefits you can extract from a solid referral program are:

  • Super segmentation: “no one recommends diapers for those who don’t have children”. This phrase is from Jonah Berger, author of the book Contagious. In other words, the job of defining and finding your ICP (Ideal Costumer Profile) is almost done. This is often the main point that drives companies into the valley of death in the first few years of activity;
  • CAC smaller: the Customer Acquisition Cost can be a thorn in the side for those who grows fast. With Referral Marketing this can be reduced. Those who refer lend their credibility to the company. This makes the nominee more advanced in the purchase stage when they arrive;
  • Shorter sales cycle: it is a consequence of the item above. By lending your credibility and serving as a product use case, the friend who recommends your business is already part of the marketing and sales work for you. So, when the new customer arrives, closing usually happens much faster.

The Importance of Creating a Spiral Funnel

Allison Pickens, at the RD Summit 2017, said:

“Your customers have more power than ever.”

And that’s true. The Referral Marketing is an example that customers have more and more power and influence over the success of your company.

In addition, there are more and more options for products and services to be consumed and the opinions shared among consumers collaborate in a very intense way for the choice to be made.

Thus, it is essential that your business focuses on a great customer experience.

You can generate this by offering a product that solves his problems easily.

And people who have had a good experience will share it with others. It’s simple.

When this starts to happen, you will have created a spiral funnel.

The spiral funnel can be defined as the moment when your customers, those who have already bought and surpassed the bottom of the funnel, refer your company to other people, taking them to the top of your sales funnel.

And that leads to continuous movement. Because?

A satisfied customer can be responsible for generating up to 3 Leads!

Your marketing must start with your customers. After all, your customers already use your products or services. If they didn’t like what they consume, they would probably go elsewhere.

With that in mind, offer those incentives to comment on how much they like your business.

When a customer calls a friend and directs them to buy your products or use your service, it reaffirms why they like your company.

That reason can be anything you like. From a friendly seller to the huge number of colors you have available for a particular product.

When he talks about it with others, he feels encouraged to close bigger deals with his company. And he claims that his company offers value, quality and a host of other benefits to him.

Thus, the indications of consumers can be compared to a snowball downhill that increases as it progresses.

When a person arrives at your company through Referral Marketing, they are more likely to share their experiences with others – both positive and negative.

When a customer decides to tell five friends and then those friends tell other friends, you will see exponential sales growth.

That’s the effect you want to experience in your business!

With Spiral Funnel, you turn every happy shopper into an unofficial seller.

Applying Referral Marketing in a Simple Way

Referral Marketing is more than just one person referring your company to another.

Creative professionals have already noticed the need to expand this interaction, increasing the influence of Referral Marketing and reaching many more people.

Thus, there are numerous things you can apply in your business to encourage “word of mouth” about what you market. And it doesn’t have to be expensive or complicated!

These are 6 ways to apply Referral Marketing in your company in a simple and very effective way:

1. Contests aimed at recommending friends

Just like Huckberry, you can also increase your Leads base by introducing contests aimed at referring friends.

You can encourage referrals from your customers by having them compete for one or more prizes based on the number of referrals. One nomination, ten, a hundred, a thousand! You choose.

Thus, you can offer discounts, products or services that are of interest to your target audience. This is a good way to reach a lot more people with Referral Marketing.

2. Seasonal Campaigns

Using seasonal events or commemorative dates is also an excellent way to earn many referrals through Referral Marketing.

The Naturebox understood this and asked that its distributors offered “50% off” before the Super Bowl. Using one of the biggest American events for your marketing strategy significantly increased your profits.

Take advantage of events to generate “word of mouth” about your company. It doesn’t have to be something big, just something timely!

3. Seasonal campaigns + Nomination contest

Why not bring these two great ideas together? You can also take advantage of seasonal campaigns to launch referral contests.

You can present your customers with products and services that can be useful on vacation, for example.

Huckberry (look at her again!) took advantage of this period to offer a free first-class vacation trip. And carrying a bag full of Huckberry gear.

What did the customer need to do to compete? Refer friends!

4. Leverage viral marketing

The Dollar Shave Club is a great example of how a company can use viral marketing to promote their services or products and achieve great results with Referral Marketing.

Dollar Shave Club created an honest and super funny video that currently takes 25 million views on youtube.

In the first 48 hours after the video was uploaded to YouTube, more than 12,000 people subscribed to the service, by the end of the week that number had doubled to more than 25,000.

While this is also a result of the excellent viral marketing campaign, the truth is that each of these 25,000 customers was targeted by someone who had an enjoyable experience with Dollar Shave Club consuming their video content.

5. Social gifts

You can also generate Leads by giving your customers the opportunity to give gifts to their friends.

You can send codes or links for your customers to share with others. So, these people can get free products, discounts or trials of some of your services.

Social gifts, despite not offering anything directly to their consumers, present themselves as a very cool way to be generous with someone.

6. Use an influencer or customer as an ambassador

As the heart of Referral Marketing, the best people to promote your business are those who already love what you do and sell.

These people are not just satisfied customers, they are ambassadors for your brand!

So, you should find out how to use these reference symbols for the current generation.

A good way to do this is to invest in influencers. They will spread your brand for you, introducing your company to thousands of others.

In addition, you can look at your customer base and even employees and find micro-influencers capable of boosting your sales.

Remember: your customers are your best sellers.

Referral Marketing and Inbound Marketing

By combining Referral Marketing with Inbound Marketing the referral strategy becomes even more efficient.

Since then, the company has reduced the CAC by 86% and increased the referral per user by 89%.

For this, they used:

  • Landing Pages to capture referrals from the clients themselves;
  • Automation flows for nominees so they could be more quickly nurtured on how it works;
  • Automation flows for indicators to thank received referrals;
  • Forms for capturing indications at various key moments and on our system screens.


Learn how to turn every happy shopper into an unofficial seller Marketing is about communication like Blue World City. Mainly about value communication. The marketing can happen even if you do not perform any conscious investment in this area. If you create a valuable product or service and market it, people are likely to start talking about it. The marketer’s job…