More Friends, More Sales: How to Run a Social Referral Campaign?

Every business enterprise has its own set of objectives. However, the main goal of every business, be it a Fortune 500 company or a local barista is to increase sales and ultimately profits.

Business owners must keep improving their marketing tactics to acquire new customers and grow their business.

When it comes to increasing the size of the customer base, the first people you should look towards are your most loyal customers. According to the New York Times, 65% of all new business comes from referrals. On an average, two-thirds of consumers make purchases because someone they know recommended a particular product or service.

It also clearly shows that all your marketing efforts – ads, social media, email or content are not as powerful as a recommendation from other customers. According to Nielsen, a consumer is 4 times more likely to buy a product if it is referred by a friend.


These stats prove that referral programs work. Don’t you, for instance, give higher priority to a restaurant that was referred by a dear friend of yours than ratings of successful websites like Zomato or TripAdvisor?

What is Referral Marketing?

Referral marketing is spreading the word about a product or service through a business’s existing customers, rather than traditional advertising.

According to Wikipedia:

“Online referral marketing, using digital marketing as a platform, is the internet based approach to traditional referral marketing.”

Benefits of Social Referral Campaigns:

Not including referral marketing in their marketing strategies is something that no business can afford. In fact, word-of-mouth (WOM) referrals are powerful in more ways than one:

  • Social referral programs often translate into ‘low-cost’ advertising. For any start-up that is cash strapped, this is a really good move.
  • Research shows that referred customers are more profitable and loyal than other customers.
  • Referred customers are typically less price sensitive. Most referrals don’t think twice about paying the full product price because they trust the opinions of people who’ve referred them to a product on your site; your existing customers have already conveyed the credibility of your brand.
  • Social referral campaigns can be highly effective and can potentially spread faster and to a wider audience because of the popularity of social media sites.

In spite of offering such advantages, some businesses are still skeptical of incorporating a referral strategy as a part of their marketing efforts because of the possibility of negative publicity. One bad comment or tweet while running a social referral campaign can derail the sales network;it can become difficult for a business to recover from the resultant loss.

However, if a social referral campaign is implemented correctly, it can bring remarkable success to your business.

Let’s look at an example to understand this phenomenon better:

Example of Successful Social Referral Program:

Dropbox is a cloud storage company that offers both free and paid services.

For Dropbox, traditional online marketing tactics such as AdWords and display advertising were not helping it grow its customer base. Through their own user ethnography, marketers at Dropbox came to a conclusion that they need to implement a referral program in their marketing strategies. This led to the integration of social sharing features into the Dropbox product.


Leveraging their userbase by adding simple incentives and integrating with other social platforms (namely Facebook and Twitter), Dropbox implemented a killer referral marketing program in 2009.

Dropbox’s referral program is terrific. It is:

  • Simple (one click push to Facebook, Twitter and email).
  • Provides clear benefit to the user (increases their storage).
  • Is tied directly to the core product.
  • Is well-designed.

Strategies to Run a Social Referral Campaign:

The following marketing strategies will help your business determine how to generate leads via referral traffic and ultimately boost overall visibility of your brand:

Setup Friend Invite

The best way to increase social media referrals is to enable ‘friend invite’. Accessing your customers’ social network by giving them the chance to act as brand ambassadors is more likely to attract high quality referral traffic.

Research has shown that 75% of usersclick on a product or services link shared by friends on Facebook and 90% will recommend a brand to others after interacting with the company on social media.

Create a Referral Rewards Program

Another neat trick to increase social media referrals is to offer incentives. Make users want to share your content or product. Social sharing widgets make it easy for users to share. Incentivize your customersfor sharing your content or product with their networks. You can offer an incentive related to your product or a gift coupon of your online store. Encouraging users to share will increase your referral traffic and ultimately grow your customer base.

Offer A Double Incentive Reward Program

In the double incentive approach, both the referrer and referee get an incentive. It is considered to be the most effective tactic to bring in new users and reward existing customers. For example, give the referrer a $5 coupon that can be redeemed at your online store and offer the new person a product or service discount. This will instill loyalty and goodwill before a new customer has even bought a product on your site.

Use Cross-Promotional Networking

Look for businesses that have the same target audience, but are not your direct competitors. Form partnership with such businesses to gain exposure among their followers. You can then share your content or promote your product on their social channels. This will increase your reach and brand awareness.

Track Your Efforts

The only way to know how your social referral campaign is doing is to track it. After executing the social referral program, company’s marketing department should figure out which strategies are generating the most referrals and concentrate all efforts on the best strategies.

Social referral marketing campaigns should be implemented in your sales process and should not be a one-off marketing campaign. Make sure all new customers are asked for referrals to ensure you have a flow of fresh leads all the time!

Author Bio:

Michael Georgiou is a dynamic business professional and entrepreneurial guru with a proven success in creative strategy, online branding, project management, and communication projects in both the public and private sectors. He drives Imaginovation’s rapid business growth in marketing and sales due to a multifaceted and versatile communications experience with a reputation for providing innovative turn-key digital solutions, and a steadfast approach for managing teams to provide high quality web products and services in numerous industry verticals. A large portion of Michael’s experience is working with reputable clients in delivering a wide range of solutions for web design and application development projects, as well as managing the user interface and user experiences on a high level marketing perspective. Michael holds an international Master’s degree in Business Communications Marketing from Bond University in Australia, and a Bachelor’s degree in Public Relations and Marketing from UNC Pembroke.


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