The Referral Program

The Referral Program

Referral marketing is marketing in the simplest of ways, through word of mouth. Simply put, referral marketing means marketing and advertising of a product or service through existing customers. This is perhaps the oldest and one of the most trusted methods of advertising out there. In essence, this can be done by rewarding loyal customers who actually promote your product and by a diverse number of other contacts for recommending your products and services.

Referral marketing is what sets a trend and what can make things/ promotional campaigns go viral. For example, the old spice commercial with the tag line: ” The man your man could smell like” got over 23 million views in under 36 hours. Moreover, this increased sales of old spice by 107%. Referral marketing aims for creating the same effect but is directly started by the business. The rewards that are given could be credit money. For instance, DIRECTV customers who refer a friend receive a $100 bill credit when their friend actually signs up

Why is Referral marketing so powerful

It all boils down to the basic nature of human beings. Human beings are naturally social animals and love to talk and share information. If we like something we instinctively tell about it to our friends and family as we want them to have a similar experience too. The same is true if we have a bad experience too as you would like others to learn from your mistakes and not suffer like you just did. To elaborate, here is a research fact, Neilson says that around 92% of consumer trust recommendations. In addition, according to McKinsey, referrals influence up to 50% of all buying decisions and surprisingly, it generates sales two times more than paid advertising.


Well, you might have to get some assets for the initial stage but when it spreads, it will spread like a virus. As in its simplest form, this is just friends recommending stuff to their friends and so on. Many companies have earned millions of dollars from different referral marketing strategies. An example of this is the Dollar shave club which is a subscription-based company that got its initial big push from a referral marketing campaign.

Moreover, in 2012, they released a youtube add with some good sarcasm. This add has whopping 26 million views. Just 2 days after this video was uploaded 12000 new people had signed up and by the end of the week, the number grew up to 25000. What basically happened was that the initial customers loved the add and told others about it and hence it went viral. In 2016, it was sold for a whopping billion dollars.


This is another example of a company that used the power of referral marketing to make it big. Well, their referral program went surprisingly well as they went from 100000 users to 40000000 in a span of 15 months

On another note, here is a reason why you might not be getting such big responses. Though, according to advisor impact study, 83 % of your satisfied customers are willing to promote your products only about 29 % do. This is because you need something surprising, something that amazed people and plays a bit with their emotions. A Wow product, a product that prompts conversations itself and forces people to talk about it. The real problem is actually making a wow product which requires a lot of research and hard work.


This is mostly done through innovation. It could either mean creating something brand new or dealing with an already existing problem. Examples of this are Tesla model X and iPhone. Tesla Model X redefined the image people of electric cars in people’s minds and changed its whole perception. People believed that electric cars were always going to be ugly but this model completely shunned that point of view and completely sorted that problem out.

iPhone, as we all know, revolutionized the whole view of phones at the time which, back then was just believed to be useful calling and texting. iPhone, on the other hand, gave a whole new dimension to that. The phone could cow take photos, play music and had a touchpad.

The Referral Program

A meaningful Story

It’s not necessary to have a wow product, the expensive way. You can add an interesting story to your product which can act the same way more or less. It could be a story about how your product came into being and how much effort you put into providing customers with what they actually want. Here are a few examples of companies that have made stories that work


This is a shoe company that donates a pair of shoes on every purchase. The story began when the founder of this business, Blake Mycoskie went to Argentina and saw some people not even able to afford shows. Hence walking barefooted on roads. This basically means that whenever someone buys a product, they are not just buying the product. They are actually buying the idea and helping out in Blake’s mission of making this world a better place. Toms is now worth nearly a billion dollars


Debbie Sterling, Its founder while studying at Stanford noticed the small number of women in her engineering classes. Which shocked her so she decided to make interactive toys for young girls and hence Goldieblox came into being.

In summary, referral programs can work very effectively for your business. But, it’s the product you sell might just sell products that are plane out boring. You yourself in someway have to add something that’s eye-catching and hooking. An example of a business that dod this phenomenally well is Blendtec. They basically sell blenders, which is well quite boring for a product. But, its advertising was the cause of it getting nearly 880 thousand subscribers on youtube. They show videos of blending iPads, iPhones, golf balls e.t.c

So do your research and make your product something that stirs talks and actually intrigues. This way, you yourself will have a good referral program that will hopefully help you earn a lot of revenue. Best of luck!!