What is referral marketing

Referral Marketing
All startups, e-commerce platforms, and large corporations aim to reach customers referred by others, as this already includes the trust vote of those recommending a brand or product. It’s one of the main reasons why verbatims are used in marketing.

A referred lead moves much quicker through the conversion funnel towards sales. It’s a much more qualified lead. Look into the meaning of lead scoring.

Referral marketing is an excellent digital marketing strategy that seeks to capture more leads or prospects by incentivizing customers, suppliers, partners, or employees to refer people within the target audience profile.

Referral marketing has been used since long before in traditional marketing, gaining much more potential with the advent of the Internet and the development of digital marketing strategies.

In traditional marketing, different forms of referencing are applied, functioning on a smaller scale.

For instance, word-of-mouth, or business cards with small discounts (or with a point-earning system) for each referral, etc.

This is exactly what equates to referral marketing in the digital era.

Marketing utilizes these same mechanisms, implemented by encouraging clients to recommend the website, product, or service through social networks, WhatsApp, LinkedIn, etc.

By referring a brand to their social or professional circle, it enhances the reach of more leads and guides them swiftly towards purchase.

Benefits of Referral Marketing

According to some research, 78% of companies indicate that referral marketing programs provide leads at a good to excellent level, meaning they are more stable in staying within the conversion funnel.

Similarly, 54% of these companies consider that referral marketing has a lower acquisition cost per prospect than other advertising channels.

This is mainly due to the trust provided when a client directly recommends a product, and this way, customer loyalty can also be achieved when combined with other inbound marketing strategies.


We all know that the first thing to always consider is that the shopping experience has been satisfactory for the customer. Without this, the techniques you apply for referral marketing won’t work.

Moreover, no one wants negative advertising, as it has a significant impact on consumers’ minds.

What Do We Need to Design a Referral Marketing Strategy That Suits Our Needs?

Here we show you some referral marketing techniques that you can use in your e-commerce or startup!!”

Don’t Wait Too Long

One of the recurring mistakes in referral marketing is waiting to establish a solid relationship with clients before motivating them to refer others.

This approach is not advisable, as there’s a significant chance that the customer is no longer excited about having purchased your product.

Maybe because it’s no longer new or they no longer feel the thrill and satisfaction of that first purchase experience. This can happen even if it was the best investment for them because they use it all the time, or because it’s extremely useful for meeting their needs.

So, you need to keep that excitement alive!

Don’t hesitate to persuade your clients to refer you to their friends or colleagues.

Encourage your customers to leave reviews on their social networks.

This is a key activity in the social media management of our agency.

Social networks play an important role in marketing strategies. Although they are not the only channels, it’s true that people interact much more with their acquaintances through these platforms.

Therefore, reward those customers who leave comments and testimonials about their purchase experience, the product, or the brand.

If you already know that you provide a high-quality service or product that adds value to your users, it’s likely that these recommendations will come more naturally from the customers.

A testimonial or verbatim can significantly increase the trust of an audience that is not yet in the conversion funnel.

The statistics are clear on this.

According to a 2020 MentionMe study in the United Kingdom, 51% of consumers consider friends to be the most reliable source of brand or product recommendations, followed by partners or family members.

Use Creativity Offline and Online

Another strategy in referral marketing that has been implemented, combining offline with online marketing, involves giving clients a business card with a personalized QR code. This allows referred individuals to access content or a website by scanning the code.

At the same time, the company can identify the client or partner who made the referral and implement a points or discount system for each time their code is scanned.

Using analytics tools, it has been observed that this strategy leads referred individuals through the conversion funnel, from lead to customer, much more quickly.

Discount Coupons, CRM, or Points Systems

You can enhance customer service with a CRM strategy. Do not hesitate to offer redeemable points for each referral sent by a satisfied client.

However, it should be worthwhile. Providing some discounts on the next purchase to the person who made a referral can be a great incentive for clients.

In this case, the referred individual is a new lead who can be attracted with a discount on their first purchase.

An example of this technique can be seen in companies like Uber or Didi, or similar transport platforms, which offer discounts or coupons for referred clients who sign up through a friend’s reference.

This strategy works as a win-win for both the company and the old and new clients, who receive valuable rewards based on the product or service.


Referral marketing is a very effective strategy for attracting new leads with a lower acquisition cost.

Ideally, this should happen organically and voluntarily by satisfied customers. However, companies can implement strategies to further persuade clients to make referrals to their acquaintances.

Lose the ‘Fear’ of Asking for Referrals. Many e-commerce businesses or startups believe that it’s not good to ask their clients to recommend them to others, perhaps considering it too pressuring.

However, as you can see, this is one of the strategies that bring the best results in attracting new customers and, why not, in retaining those already in the conversion funnel.”

viernes, 24 de marzo de 2023

Juan Esteban Yepes

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