Your Best Marketing Channel Is Your Existing Customers
Referred customers have 16% higher lifetime value, 18% lower churn, and cost a fraction of customers acquired through paid channels. A structured referral program turns word-of-mouth — already your most trusted marketing channel — into a predictable, scalable growth engine.
Types of Referral Programs
Dual-Sided Rewards
Both the referrer and the new customer receive a reward. Dropbox’s famous program gave free storage to both parties. This approach incentivizes both sides and feels fair.
Points or Credit-Based
Referrers earn points or account credits redeemable for products, services, or discounts. This encourages multiple referrals over time.
Tiered Programs
Rewards increase with more referrals. One referral earns $25, three earns $100, five earns $250. Tiers motivate continued advocacy.
Cash Rewards
Simple and universally appealing. Cash rewards remove any ambiguity about value. Particularly effective for B2B referrals where the referrer may not use your product themselves.
Building Your Program
Make It Easy
Give referrers a unique link, code, or simple form. The more friction in the referral process, the fewer referrals you’ll get. One click to share, one click to redeem.
Choose the Right Reward
The reward should be meaningful but sustainable. For B2C, 10-20% of customer acquisition cost is a good benchmark. For B2B with higher customer values, rewards can be more generous.
Promote It
Don’t just create a referral program and hope people find it. Promote it in post-purchase emails, on your website, in your app, through social media, and in customer communications.
Ask at the Right Time
The best time to ask for referrals is right after a positive experience: post-purchase, after a successful project, or after receiving positive feedback. Timing matters enormously.
Measuring Referral Success
Track referral rate, conversion rate of referred leads, cost per acquisition via referral, lifetime value of referred customers, and program ROI.
Build Your Referral Engine
Brandastic helps businesses design and launch referral programs that drive predictable growth. Get a free marketing consultation.
