How Effective Referral Marketing is beneficial for your business

How Effective Referral Marketing is beneficial for your business

Referral marketing is one of the finest ways to expand your business. It’s not only valid for a particular industry, but it is useful for every industry.

In referral marketing, a customer refers to a product or service to his friends.

In a layman language, referral marketing means referring something to someone.

Traditionally, we all have done referral marketing, but not in an official way. Previously we used to call it word-of-mouth marketing, but now those days are gone when people meet each other and tell them about the products and services they are using.

Social media has connected people in a digitized way. Now, every friend and family member can connect through the internet.

Digitalization just not only has changed our social interacting ways but changed our lifestyle as well.

Now, we can do shopping through e-commerce. We can purchase groceries, clothes, day-to-day needs, and much more.

In this blog, we will learn how effective referral marketing works and how it benefits different industries.

In this blog, we will learn how effective referral marketing works and how it benefits different industries.

Referral’s popularity is increasing day by day. No marketing strategy can complete itself without the referral program.

Referral programs are not difficult to launch, but all you need is the right guidance.

Before dive into the effective referral marketing strategy, let’s learn some facts about effective referral marketing that makes it different from our methods.

  • Recommendations from friends help 84% of people to make their product-related decision.
  • 92% of people trust recommendations from their friends and family over an advertisement.
  • On average, 14% of people who come through referrals make the purchase.
  • According to the New York Times. 65% of the new customers or business comes through referral.
  • According to the Nielsen survey, people are four times more likely to purchase when referred by a friend.


 See how beneficial it is for any industry, how it can expand any business or industry by many folds.

If you want to do effective referral marketing, then follow this simple guide.

  • Target your advocates.
Target your advocates.

Advocates are those loyal customers that are already using your products. They have trust in your products and can easily refer to their friends.

  • Motivate them through incentives.
Motivate them through incentives.

 Your loyal customers or advocates like your services, but if you want them to go further for your brand, then reward is the most appropriate way to keep them moving.

If you give rewards to them, it encourages them to spread the right words to everyone.

  • Remind them about the offers.
Remind them about the offers.

Launching a program is not enough. You should keep updating the advocates regarding the offers, try to grab their attention. You can send them text messages, emails, or pop-ups on their devices.

  • Know your customer.

If you want to make your customers happy and want to beat your competitor, then know your customer in the first place. Track their movement on your website through heat maps. If you know your customers well, then it will be easy for you to attract them.

  • Make your customer support reliable.
Make your customer support reliable.

If you want your loyal customers to pay attention to your program, then firstly you need to make your communication healthy with your customers. Customers like when their favourite brand responds to their queries. So make sure you have an excellent customer support system.


Now, you are aware of some steps.

We will see different examples, one by one.

First of all, we will study the most effective referral marketing programs.

  • Dropbox

Dropbox is one of those examples that have gained a lot from effective referral marketing. Their idea was not unique but effective as well.

In their referral program, they use their product as a reward. Dropbox gave its referrers free space, and customers loved its idea. And its revenues increased by many folds. 

They have used both side gratification, in which they reward not only the referrer but also the referee. 

Results from the referral program.

  • There has been a 60% increase in permanent sign up.
  • Initially, they had only 100000 users, but after the referral program, they got 400000 users.
  • The referral program leads to 35% daily sign-ups.


2. Uber.


We all know about Uber and its popularity, but initially, it was difficult for them to make people aware of their presence despite fierce competition.

Thus, they used the referral program in which their tagline was Give 10 get 10.

And it worked for them, and they have gained a lot of customer base within the short span of time.


3. Airbnb.


Airbnb is one of those successful startups that has gained popularity through an effective referral marketing strategy.

Airbnb used its customer base of 2,161 and brought new 2107 members.

In their referral program, there were some conditions like

They will get $20 travel credit if their friends take a ride of $75 or more.

In their referral program, they involve stepwise incentives. Customers were able to earn up to $100.

These are three examples that take a referral program to another level. Their effective referral marketing program makes them the best in their respective field.

 Now, see how e-commerce platforms are using effective referral marketing and making revenues.

  • Fashion Industry. 
  1. GILT

GILT is an online retail store for designer clothing. They offer designer clothing for kids, men, and women. They use different incentives for referral marketing. In their referral program, they provided their referrers a $25 gift card. 

They use different ways to share the code. Referrers either need to copy the link and share the same to the friends, or their friend can also scan through QR code.

Their different ways of approaching customers helped them to attract a huge customer base.


2. WoolOvers



WoolOvers is an online clothing platform that sells wool’s clothes all around the world. 

WoolOvers makes its advocates happy by giving them attractive offers, and this makes their referral program a success.

They use two-way rewards in which they give advocates £50 and their friends 20% off.


  • Beauty and grooming industry.
  1. DORCO

It’s a razor’s blade brand that provides a different pair of blades. Since it was a unique idea. So, they approached a unique way of promoting it. They use a referral program to support their concept. 

In their program, they gave 20% discounts to referrers.


2. Julep.


Julep is an online cosmetic e-commerce store. They sell makeup stuff and even offer a monthly makeup subscription box. They used golden words that attract the females “for every bestie who joins,” and this makes their campaign more attractive.


See, we have seen some examples of how it helps in every industry to make it shine.

Referral programs are not just cost-effective, but also easy to adapt to every organization.

Businesses just need to plan their referral program according to their product type, their business size, and the incentive type.


Before we move forward to learn about some more examples, let’s read some features of the Referral program.

  • Trusted outcomes.

Referral marketing is a trusted source of outcome for businesses. They are based on old customers, who already liked your product, it means that there is a lot of scopes that they will promote your product.

Referral programs assure good ROI. Therefore, its outcomes are trusted by every industry.

  • Referrals are cost effective.

Unlike any other mode of advertisement or promotion, referrals are way cheaper than them. Referrals don’t require a large group of employees to promote it. Once you have launched your referral program, it will not require any extra efforts to promote it.

It is not just cost-effective, but easy to manage as well. You can manage it through a single dashboard.


  • The market already exists for launch.

For launching a referral program, businesses don’t require creating a market. Every brand or product already has a market. So, for starting a referral program, you need not spend a lot of money to promote it everywhere. Just use your advocates to promote it. 

Launching a referral program is easy because you have to use your assets, and they will bring potential customers for you.

  • It’s a way to make your customers happy.
It's a way to make your customers happy

Every customer wants their favourite brand to reward them occasionally. Loyal customers always purchase their favourite brands, but sometimes rewarding them makes them feel privileged. Therefore, through the referral program, you can make two shots. First, you will make your customers happy, and second, you will even get something in return.


Since we have learned about the features, now, they will help you to understand better.

Let’s see how InviteReferrals software helps businesses to establish their name.

Why should businesses choose InviteReferrals?

InviteReferrals is the most straightforward software to launch a referral program.

Let’s know about its features.

  1. It is fully customizable.
  2. It supports multiple platforms.
  3. It provides an in-depth analysis.
  4. It offers multiple referrals and social sharing options.
  5. It also provides personalized coupon-based programs.


How does it work?

 There are two types of flows.

  1. Mobile Application Flow.
  •  The customer invites his friends to join the referral program from a referral link.
  • Friends accept his invite and install the mobile application.
  • InviteReferral will forward an email regarding the reward for referral install.

2. Website Flow.

  • Launch the referral program on the website.
  • The customer joins the referral program.
  • The customer refers to his friends.
  • Reward the customers for their referral sales.
  • Customers’ referral panel.

Let’s see how InviteReferrals helps its clients in increasing revenue.

  • MylesCars

MylesCars is a self-drive car-sharing company. It is an initiative that will give a boost to the transportation industry. They work as a mediator between the car owner and the customer who wants to rent a car. It helps the customer to make a deal with the owner.

MylesCars wants to spread this initiative to such a platform where it can connect with customers and even expand its business. It aims to make every customer’s life easy.

Therefore, they approached InviteRefferals for launching a referral program for their customers.

InviteReferrals launched MylesCars program according to their need and, within a short span of time, made a huge success. 

After launching the Referral program, its revenue increased by 30%.


  • StarQuik

StarQuik is an online grocery store. It aims to provide day to day needed stuff to its customers. They want to make every customer’s life easy. They offer fresh vegetables, fruits, dairy products, and personal care products. It’s a platform that has the potential to solve every homemaker problem under one roof.

StarQuik wants to become the customer’s number one choice. But it is not easy because of the ongoing competition between different online retail stores. Therefore, StarQuik intends to use different and unique strategies for its business. StarQuik wants cost-effective methods to promote its products. 

StarQuik joined InviteReferrals to boost its sales. InviteRefferals to help them through a customizable program. 

InviteRefferals program helps to increase its yearly referral revenue by 4x.

StarQuik’s cost of a new acquisition got reduced by 30%.

  • Poker Nation
Poker Nation

The gaming industry has increased its base significantly. Now, people are addicted to online games. If we talk about games that we used to play offline, they have now revolutionized themselves and come up with online gaming marketing.

Poker is one of those games that are liked by so many people. So PokerNation has come up with an online Poker game.

Since it’s a popular game, PokerNation wants to spread awareness among people that they have come up with an online version. 

So, they approached InviteReferrals to spread those words.

With the help of InviteReferrals, PokerNation managed to increase its new engagements by 30%.

They were offering cash benefits that, too, in poker, that was the strategy adopted by them in the referral program, and it became a huge success.

InviteReferrals has launched its Referral Program in which PokerNation gives INR300 for every referral.

So in this blog, we have learned so many things about an effective referral marketing program. We not only study the referral program examples but its importance and its role in different industries as well. InviteRefferals role in making their clients meet their goals. 

So, after reading this, we have found out that the referrals program is today’s need. If any business wants to survive in such a competitive environment, one should give a referral program a chance and see its effectiveness. 


Shivani is a content writer at InviteReferrals. She writes SEO articles, blogs, and guest posts for businesses to improve website ranking on SERP. She follows a balanced approach for the quality of content and its marketing. She loves to do creativity, although she had an English major in her graduation.