How to Use Customer Referrals to Grow Sales

5 Ways to Use Customer Referrals to Grow Sales

Hello Business tycoon! The chances are that you’ve been trying to do everything possible to grow your sales (who doesn’t like huge sales?) Perhaps you’ve tried several other methods such as Facebook Ads, sponsored posts, and the likes. And the chances are that the return on investment is making you quite baffled.

While you might have tried other methods and received only a slight boost in revenue, have you tried referral marketing? Of course, you may have dabbled into it at one time or the other but is doing it the absolute wrong way! Or, perhaps, you’re not milking as much revenue as you should from this golden sales technique.

An essential aspect of a good customer acquisition and retention strategy is to have excellent customer referral programs. Good referral marketing programs provide customers with a means to refer their friends to a business and reward their action. There’s no denying that word of mouth is still hands-down one of the most potent growth agents for any business. Get your business some passionate advocates, and the results will blow the roof off!

Therefore, the art of turning your happy customers into brand advocates is a skill you must possess. And why? Because this is one of the cheapest – and yet most effective – ways of acquiring new customers. So, the critical question is: how can you use customer referrals to grow sales?

What Does Referral Marketing Mean?

Referral marketing is a strategy that leverages recommendations, individual connections, and influences to grow your customer network. Simply put, in customer referrals marketing, your customer base does most of the marketing for your brand, usually based on their experience with your brand. Referral marketing can take several forms. However, at its core, it involves getting your most loyal customers to market your brand to their circle.

Referral marketing in business is a strategy that has been in use for several years. This business strategy helps companies stand out amidst competition in their industry. This article goes through the fundamentals of referral marketing and how you can optimize this strategy in growing sales for your business.

Does Referral marketing work?

So, does Referral marketing work? The short answer? Yes, it does! Referral marketing has been in use for several decades and has proven to be an effective marketing strategy over time. One of the main reasons referral marketing is so effective is that many people trust word-of-mouth marketing strategies, especially from familiar faces compared to paid impressions.

This makes referral marketing relatively more cost-effective compared to other marketing strategies.

Optimizing Customer Referrals

Did you know that you can optimize your customer referrals to gain an advantage over the competition? Let’s talk about that! It is relatively easier to run a business nowadays than it used to be. This is due to the several technological developments around. And with these technological developments, you can improve access to the prospect and compete on even fiercer grounds.

In a sea of options available to the prospect, all they may need is a word-of-mouth nudge or affirmation from a trusted person to choose a particular brand among the several options available. In most instances, offering top-quality service to your customers is enough to make them convincing cheerleaders of your brand. Once most customers get good return-on-investment on products they purchase from your brand, there is a high likelihood that they would recommend your brand to other people.

One of the significant ways to exploit the referral marketing niche is by the use of incentivized referrals. Incentivizing the referral marketing process and creating one of the best customer referral programs is a gold mine you must not forfeit. By attaching referral incentives to your business, more satisfied customers are more likely to spread the word about your business. The incentive placed on referrals can range from special discounts to cash and gift prizes.

Tips for Effective Customer Referral Marketing Programs

Here are some tips to help you effectively use customer referrals to grow your sales!

  1. Know When to Ask

Like most other marketing strategies, the timing of your request for referrals has to be perfect to be effective. Asking for referrals at the wrong time can backfire. This is why it is best to observe when customers are most satisfied with your brand and then leverage that opportunity to get them to refer your brand.

Some of the best time to achieve this include:

  • Immediately after purchase: Studies have shown that personalization in customer service helps achieve a better-engaged customer base. The better engaged your customer base, the higher the chances of referring you when the opportunity arises. So, if your customers are engaging with you, you can make special offers that promise incentives based on their purchase. For instance, a special discount on their next purchase if they share a referral link or meet a referral target.
  • After positive feedback: Another adequate time to have your customer refer you is after positive feedback or rating. Most of your satisfied customers would not have any problems sharing your brand on social media at the slightest opportunity. However, one of the best times to achieve this is after getting positive feedback from them. At this point, you can easily engage them on social media and have them share a referral post with their friends.

    Also, you can use the incentivized approach to referral marketing. For instance, after positive feedback or a high rating, you can simply say something like, “We’re glad you’re satisfied with our service. Share your thoughts with your friends to enjoy a 20% discount on your next purchase.”
  • After Customer Service: If your brand offers customer service or support to customers, then optimizing this channel for your referral marketing might be a good idea. Once a customer’s problem has been resolved, your customer service agents can have a closing line that encourages customers to refer to your brand.
  1. Simplify your brand message

If you will be using customers as foot soldiers in marketing your brand, it is essential to ensure that your brand message is simple enough. If your brand message is complicated, it becomes more challenging to share and makes your referral marketing less effective. To achieve desirable results from your referral marketing, keep your brand message simple and memorable. This way, customers find it relatable and can easily share it when the opportunity arises.

Apart from the brand message, your referral system should also be simplified to make the process easy for your customers. If your business is offline, you can have printed materials about your brand that you share with customers on their way out. However, if your business is online, it becomes even easier as all you need to do is have a button that allows users to share your brand with their contacts and connections across different platforms.

  1. Leverage on your brand loyalty system

To carry out an effective referral marketing program, it is essential for you to effectively identify your brand’s most loyal customers and keep them engaged. An excellent way to achieve this is through a customer loyalty system. Once you can classify your customers based on their loyalty levels to your brand, you can directly target the most loyal customers with any special referral offers as they are more likely to take action on these types of calls.

If you have a mailing list or direct contact with this set of customers, you want to notify them of new incentives and remind them of existing ones.

  1. Build a community around your brand

This is another effective strategy for effective referral marketing. By building a community around your brand, you give your loyal customers a better sense of inclusion. This makes them feel like a part of the brand and gives them more reason to refer you to their influence circle. It’s easy to build a community around your brand through social media. Use all social media platforms to your advantage and make your brand a household name!

  1. Make it easy to refer others

It would be best if you made your customer referral programs easy to find and readily available. Make your customers know that there is a referral program in place. Conspicuously display it on your website’s landing page and after customers make their purchase. So, never assume that people already know about your referral program. Push it to them even if they are repeat customers or visitors. Don’t bury the info in a corner on your website – feature it prominently! 


When you invest your time and effort into your company’s referral program, you’ll be in a favorable position to reap the benefits of pivotal low-cost-per-acquisition marketing methods available! Support active social media conversations about your brand and increase your customers’ trust. What you then get are increased sales and revenue numbers! Referral marketing is one of the most cost-effective ways to market your brand. If done correctly, you are sure to increase your sales without breaking the bank!