How to get more referrals from your customers

If you’re not leveraging your top customers to get more referrals, you’re missing out on some low-hanging fruit.

Research finds that referred customers are more loyal than customers acquired in other ways and have up to 25% higher lifetime value. Mattress retailer Casper reached 7x ROI on its referral program compared to the average customer marketing investment. 

In this article, we’ll go over six ways you can get more referrals for your business, including a breakdown of how Casper did it.

What is a referral?

A referral occurs when an existing customer recommends your brand to a prospect who then converts to a new customer. This can be organic, such as when a customer raves about your brand to their friend in casual conversation. Or it can be incentivized, such as when an influencer promotes their referral code to their Instagram followers.

6 ways to get more referrals for your business

1. Offer an incentive that both the referrer and the referred want

Incentivizing referrals is all about choosing a reward people actually want. Tie referrals to your brand by offering your products or store credits as rewards. 

In a genius marketing move, online brokerage Robinhood incentivized referrals pre-launch by offering something website visitors wanted and couldn’t get anywhere else: early access to the trading platform. Getting creative with their reward won Robinhood one million potential users before it even went live.

When in doubt, however, money is a safe bet. In our cross-industry survey, we found that people prefer cash as a holiday gift from their employer. And your customers are probably no different. Additionally, in an experiment run by Friendbuy, gift cards boosted referral sharing more than discounts.

Cash ensures that both the referrer and the referred can spend it on something they want.

Tremendous makes it easy to reward referrals no matter where in the world the recipients are. Just send them a redemption link, and we take care of the rest, including automatically locating them, handling currency conversions, and providing recipient support.

2. Make it easy to refer

Build a “refer-a-friend” feature in your product. On your website, create a referral link along with a message encouraging customers to share it when they check out. In your physical product, include a referral code in the packaging it arrives in.

Take Casper, for example. The mattress brand encourages referrals at multiple touchpoints for its top customers, including:

• Communications when a customer leaves a positive review or positive NPS score

• A link at the top of the order confirmation page

• A printout inside the instructions that arrive with the mattress

3. See customer service as an opportunity to inspire referrals

Customer service interactions can spark a rant—or a recommendation. BarkBox knows this. The monthly subscription service for dog goodies regularly receives love on social media thanks to its customer service.

When subscribers contact the company about a destroyed dog toy, the customer service team replaces it free of charge. This turns what starts as a complaint into a compliment.

It also turns BarkBox’s customer service into a referral machine, inspiring recommendations on social media.

Train your support team on customer delight. And at the end of a positive customer service interaction, automate followup emails that encourage customers to refer their friends.

4. Perfect your promotional messaging

When encouraging referrals, the way you frame your messaging matters. In one study involving 100,000 customers, a pro-social message (e.g., “your friend will get 70% off their next order”) was more effective than a selfish one (e.g., “you'll get 70% off your next order”).

This is part of how Airbnb designed a wildly successful referral program. The company A/B tested its promotional emails to see which wording would inspire more shares: 

• Option A (self-interested): “Invite Your Friends, Get $25."

• Option B (altruistic): “Give Your Friends $25 to Travel.”

The winner? Option B, which appealed to one’s altruistic nature, encouraged a higher rate of customers to invite their friends to try Airbnb.

So when you’re crafting your referral messaging, be sure to highlight how recommending your brand to friends is like giving them a gift.

5. Launch a formal referral program

To consistently drive referrals at scale, nothing beats building a formal referral program. Brands from Airbnb to Casper have seen huge ROI from doing so. 

In the previous steps, you already laid the groundwork: Choosing the right incentive and perfecting your messaging. The final step to creating a formal referral program is investing in the right software. 

Friendbuy automates the creation of referral codes and links at scale, while Tremendous simplifies sending rewards in bulk. With the Friendbuy-Tremendous integration, you can easily manage both tasks in one place.

6. Leverage your loyalty program

Unlike a referral program, which aims to acquire new customers, a loyalty program seeks to retain existing ones. However, one can complement the other. 

Your loyalty members are your diehard fans and will usually be your most effective referrers, too. Integrate referrals into your loyalty program by making referrals a way to earn more loyalty points.

For example, Sephora occasionally runs time-limited referral promotions for its Rouge members—the highest tier in its loyalty program, reserved for those who spend $1,000 per year. Rouge members’ friends get 10% off their next purchase for signing up, and the referrers get 500 points. It’s a smart way to activate Sephora’s most loyal members while also winning over new customers.

Get more referrals with the right incentives partner

Even if you implement all six of these strategies to get more referrals, you still need the right incentives partner to send rewards hassle-free.

Tremendous simplifies sending referral rewards by:

• Making it easy to send at scale. Automate rewards with our dev-friendly API, integrate with Zapier, or do a bulk upload.

• Automating translation and currency conversion. Just tell us their name and phone number or email address, and we’ll take care of the rest. This includes automatically geolocating the recipient and offering redemption options that are locally relevant.

• Protecting your funds from fraud. We’re the only rewards platform offering built-in fraud prevention.

• Doing it all for free. With Tremendous, there are no hidden fees. Spend only what you send.

Book a demo to get a walk-through of how it works. Or sign up for free and get started in minutes.