How To Get Referrals: 10 Referral Marketing Strategies

Actively expanding your customer base can sometimes feel like a daunting—and expensive—task.

“There’s a cost associated with each and every step,” Jeremiah Curvers, co-founder and CEO of Canadian mattress maker Polysleep, explains on an episode of the Shopify Masters podcast. “Cost of advertisement, cost of having a team, a boots-on-the-ground retail store.”

But, according to Jeremiah, there’s a surefire, lower-cost way to bring your product or service to new audiences: leveraging the customers you already have (a.k.a. referral marketing). The power of a strong referral, he says, can’t be overstated.

“It’s extremely hard, from a marketing standpoint, to go after people who’ve been referred [to a certain brand] by someone they trust.”

A study from data analytics company Nielsen supports this, finding that the most trusted advertising channel for 88% of consumers is recommendations from people they know.

While some recommendations happen organically, you can encourage existing clients or customers to tap into their networks with a process that’s easy and rewarding. Let’s explore how to get referrals for your business.

What is referral marketing?

Referral marketing includes strategies for promoting your business and acquiring new customers by driving referrals from people who know and love your product. When someone raves to a friend or encounters positive feedback while scrolling through online reviews, it’s an informal referral. Referral marketing is a way to encourage and support more customer-to-customer interactions like these—and turn them into sales.

Referral marketing and word-of-mouth marketing both leverage customer loyalty and advocacy. They differ in that referral marketing offers incentives for business referrals and creates formal structures around the referral process. Not only is referral marketing proven to be successful, but the strategy can also be tailored to your specific needs and budget.

10 ways to get referrals

1. Create a customer referral program
2. Offer incentives your customers want
3. Make rewards go both ways
4. Educate your customers
5. Make the referral process easy
6. Look beyond one-off referrals
7. Know your goals
8. Monitor your progress
9. Prioritize the customer experience
10. Emphasize quality

There’s no single way to quickly generate high-quality referrals, but there are certainly proven strategies and best practices. Below are some of the most effective ways to encourage and facilitate authentic referrals, including a few examples in action:

1. Create a customer referral program

This approach involves soliciting customer referrals and setting up easy and trackable ways to do so, often offering incentives to encourage participation. Customers who come to you via a formal referral program are often more profitable than those acquired through other means. In fact, according to Extole, referred customers tend to have a 150% higher average order value than regular shoppers.

Existing customers know their friends best and help create a deeper connection between your company and those they refer. Those friends can also become referral sources themselves. In fact, they tend to make more referrals than non-referred customers, according to a Journal of Marketing Research study. This helps you reach second-degree connections of the original customer and potentially beyond.

2. Offer incentives your customers want

Encourage customers to refer friends and other connections by linking a referral to a compelling outcome. Referral incentives can look like a lot of things: discounts, complimentary samples, or donations to a specific cause. Your customers are the ones who will be driving the success of your referral program, so tailor it to them.

Referral rewards can also be incorporated into larger loyalty programs. Then I Met You, the Korean-inspired beauty brand, lets customers earn points on purchases and social media follows, but also for leaving product reviews.

3. Make rewards go both ways

A “two-sided” incentive structure rewards both the referring and referred customer, making participation mutually beneficial. You can also add conditions that require a certain dollar spend for the discounts or credits to activate.

OSEA, the sustainability-focused skin care brand, allows customers to give a friend $10 to use toward a purchase of $60 or more. The referring customer earns an equivalent number of reward points for each successful referral. Likewise, users of the laundry service Poplin can give $10 and get $10 when they refer a friend—or send $20 to their friend, if they’re feeling generous.

4. Educate your customers

Generating referrals is difficult if nobody knows you’re seeking them. Create a dedicated page on your website that’s easy to find. Oral health brand Cocolab highlights its Give $10, Get $10 program in its site footer, which appears on every page.

Then, educate current customers to get them on board. Spread the word across different marketing channels by linking out via social media posts, newsletters, or even the boilerplate employee email signature.

You can also make more explicit referral requests, especially after a purchase or other positive interaction. Consider adding a note on a confirmation page, a point-of-sale email, or via push notifications to remind clients and customers about the program.

5. Make the referral process easy

Even loyal customers interested in referring new business might be hesitant to refer friends if the process is too complicated. Create custom links or QR codes and personalized referral codes. Make these simple for customers to share with potential referrals by using programs to autopopulate an email or text message based on a template.

6. Look beyond one-off referrals

If you find certain referring customers are routinely bringing in new business, you can implement a tiered model—unlocking more rewards for high performers—or consider a commission-based ambassador program.

Jeremiah cites a local interior designer in Montreal, where Polysleep is based, who frequently referred clients interested in upgrading their mattress as part of a larger renovation. Now they work on a commission model and earn thousands of dollars a month.

7. Know your goals

A coherent referral marketing strategy requires identifying what you’d like to achieve or areas you hope to see growth. Be specific: Do you want to reduce your spend on traditional advertising? Increase customer retention? Reach more of a certain kind of client? Articulate your goals and set realistic, measurable benchmarks for evaluating success.

8. Monitor your progress

Referral tracking software is a game-changer for automating the tedious parts of a referral program. It can help with creating new referral codes, issuing rewards, designing reward tiers, and streamlining analytics.

Tracking new referrals and understanding the data can help you optimize and adjust your referral strategy by illuminating what works and what doesn’t. These insights are often so specific you can narrow in on the customers most successful at generating high-quality referrals.

9. Prioritize the customer experience

Jeremiah finds encouraging referrals isn’t just about having a great product—it’s about creating and leveraging a great overall experience. Just as customers may remember customer service failures, they also remember when you exceed expectations. Sometimes, the small touches that make up an exceptional service experience—a follow-up call, a handwritten note—can also be ways to ask for referrals without being pushy.

10. Emphasize quality

Obtaining referrals requires having a product worth referring, especially in competitive industries where margins are tight. Make your product referral-worthy, and it becomes its own best advocate.

“It’s all about how you can save money without compromising on the quality of the product for the consumer,” Jeremiah says. “In the long term, this is where you can have pretty solid wins and build a very strong customer base.”