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A Complete Guide to Referral Marketing Program

A referral marketing program is the best way to propel your business by accomplishing new acquisitions and sales through Referrals.

A referral marketing campaign motivates customers to share your business with their peers, which increases your customer base organically.

By offering rewards for sharing your business, you foster loyalty and retain your customers. These are just a few benefits of referral marketing.

Let’s dive into this article to understand the true extent of Referral marketing. We’ll discuss the best Referral marketing strategies, the benefits of Referral marketing, and more in this ultimate guide for referral marketing program.

Boost customer referrals, drive sales, and accelerate your business growth. Start your Referral marketing journey today.

What is Referral Marketing Program?

Referral marketing program, also known as referral marketing or word-of-mouth marketing, is a strategy implemented by businesses to encourage their existing customers to refer new customers to their products or services. It leverages the power of personal recommendations and trust to acquire new customers.

Referral marketing program

Referral marketing is one of the few organic lead generation mediums, and it has proven to be more effective than traditional marketing mediums in terms of sales and conversions.

Benefits of a Referral marketing

Referral marketing builds trust and is more reliable than advertising because people tend to believe their friends and family more than the brand.

Let’s discuss what an eCommerce store can get by running the best Referral marketing campaign in their store.

Increased sales

When you run a referral marketing program, you can reward your customers for referring their friends to your store. Offering rewards will help you retain your customers.

Loyal customers are the ones that’ll purchase more, so retaining them will help you double your sales.

Increased sales referral marketing

Also, for new customers, these rewards will motivate them to return to your store and drive repeated sales. This is one of the major referral marketing benefits.

Referred customers generally purchase 10-20% more, which is why Referral marketing program is an efficient way to increase your sales and revenue.

Improved exposure

Refer a Friend campaign is all about getting the word out to the masses. And it can be done so effortlessly using your existing audience.

Since people trust referrals from their friends, your word-of-mouth strategy will bring in new leads. If your service is good, the new customers will start recommending your store to their circle.

Thus the process keeps going on and on until you put an end to it, this is why Referral marketing campaign is the most organic medium for lead acquisition.

Saves your expenses

Acquiring new customers is expensive. This is where a Referral marketing program can be a great help for you in achieving new customers effortlessly.

Save expenses

Also, a successful Referral program provides you with a better chance to retain your existing customers and keep your revenue steady.

All you have to do is run a referral marketing program and reward customers. When they complete a successful Referral, they get a reward, and you get a lead.

Increase customer loyalty and retention

One of the major benefits of referral marketing is its ability to increase customer loyalty in your store.

By offering rewards for successful referrals, you gain their trust, and in turn, they stay loyal to their store.

Retaining customers magnet

At the same time, rewards increase your credibility and encourage your customers to return for more, thus boosting your customer retention rate.

Better customer engagement

The longevity of a customer depends on how you engage, and Referral marketing campaigns increase your chance of engagement.

It helps you to engage with your customers for Word of mouth marketing. Through engagement, you make your customers feel that they are crucial to the success of your store.

You can also give a shout-out to them on Social media for helping you acquire new leads. These engagements are key to increasing referrals.

These are some of the major benefits of Referral marketing; if you aren’t sure whether it’ll work for you, then the next section of this Referral marketing guide is the one you need.

What do you need to run a successful Referral Program?

The most common question that most store owners ask when we speak about a Referral marketing program is, will it work for my store?

So, here are a few reasons why a Referral marketing campaign will work for you.

Loyal customers

If you are in the eCommerce business for a considerable amount of time, then you would’ve gained a plethora of loyal customers by now.

It’s a fact, isn’t it?

So, if your store has many loyal customers, then a customer referral program will definitely work for you. This is because loyal customers will listen to the ideas that you pitch out.

If you want them to take part in a contest, they’ll do it. If you ask your customers to refer their friends to your store, they’ll do it instantly.

Some might’ve already been doing it, now it is your time to acknowledge their efforts and offer them Referral rewards. This will also help you boost your customer retention rate.

Many overseas customers

Referral marketing programs are the best option for your store if there are many overseas customers.

One of the major reasons for cart abandonment is the high shipping rate, so if you offer free shipping as a Referral reward, overseas customers will be encouraged.

They’ll refer their friends to earn free shipping rewards, which eventually increases your sales and you can acquire new customers too.

Type of referral reward

Retainful is one of the very few Referral plugins that offer Free shipping as a Referral reward.

New customers

If you’ve just launched your store or if your store is not getting enough sales then the customer referral program will work for you.

Referral marketing program is one of the cost-effective ways to acquire new customers through WOM marketing.

Offering Referral rewards will help you drive repeated sales as customers will keep referring their friends again and again to receive the rewards.

So, simultaneously you can acquire new customers and boost your sales.

Good products and service

This logic is pretty simple.

Word of mouth is possible only when there is something amazing to talk about. If your product isn’t good, then Referral marketing won’t work for you.

But if you offer some of the best products in the market and provide great service, then people will vouch for you.

So, the key to a good Referral marketing program is having the best products and services.

Social Proof

Customers trust the words from other customers, that trust cannot be broken.

So, if your customers have shared good testimonials and stories about your product then share it on your website and social media.

Social proof statistics

This will motivate other customers to participate in your program and refer their friends. You can also give a shoutout for their efforts and boost your engagement with your customers.

Best Referral Marketing Strategies

Alright, now you know whether a Referral marketing program will work for you. So, let’s get to the campaign itself.

Before you initiate a Referral campaign in your eCommerce store, there are a few things to keep in mind.

These are more like Referral marketing strategies that are followed by eCommerce stores around the world before they set up a customer referral program.

Offer rewards

The first Referral marketing strategy that you must follow to make your Referral program successful is offering rewards.

There are many Referral programs out there that don’t offer Referral rewards, don’t be one of them.

Referral rewards

Offering rewards is a way of acknowledging or thanking your customer’s efforts for bringing in new customers. Also offering rewards will increase your WOM and credibility.

More customers will take part in your program without you even promoting it. Offering rewards save promotional expenses.

Surprise your customers

Surprising your customers doesn’t mean launching a Referral program at midnight.

What we’re trying to say here is to exceed their expectations.

Yes, customers are smart; once they get to know that there are many people who purchase from your store, they’ll be expecting a Referral program from you.

Customers know that, so a customer referral program is not a surprise to them anymore. But what they don’t know is the reward they’ll be earning,

Invite customers

Customers will not be expecting lucrative rewards, so go ahead and surprise them with rewards that they weren’t expecting.

To do this, you must know what your customers like and what are their interests. So, build a buyer persona before you decide your rewards.

Only then your rewards will be able to resonate with them. Always go beyond your customer’s expectations to keep them satisfied.

Easy referring process

The most crucial Referral marketing strategy is making the process simple.

Many stores run a Referral program but wonder why it is not converting enough. The reason is the complex Referral process.

When you make costumes navigate to multiple pages just to refer their friends, they’ll probably quit.

Easy referring

Here is a Referral program example from Airbnb, you can see how easy the Referring process is. All a customer has to do is enter their friend’s email and they are good to go.

If you want to run a successful customer referral program, then make the process simple.

Referral emails

Another hard-to-skip Referral marketing strategy that every store owner must follow is sending Referral emails.

This is often overlooked. Store owners ask why is it necessary to send Referral emails? Well, the answer is, to increase engagement.

Not every time will a customer be entering your website and look for a customer referral program. Sometimes you’ve got to take it to them, so the best medium to use here is emails.

Send Referral emails to your customers and inform them about the Referral program that you are running.

Bombas email template

Explain to your customer about the program and what they can earn from it, but instead of redirecting them to the website, place a CTA button in the email to convert them right away.

This will save a lot of time to your customers. Look what Bombas has done here.

They’ve explained their program and the rewards carefully. They’ve also placed a ‘Refer a friend’ CTA to convert the customers easily.

This is why it is crucial to send Referral emails, you can engage and convert your customers effortlessly.

Leverage credibility

Leveraging your credibility is one of the best Referral marketing strategies used by store owners.

If you want to increase the rate of Referrals, then you must showcase how credible your store and products are.

There is a term that you must remember, Reputation risk. It is where a customer refers his friend to your store but the friend dislikes your store for various reasons.

Customer care about their reputation, so if you want them to refer your store then you must prove that you are credible.

This illustration will show you how to make your website credible. Like we said earlier, credibility is key to Referrals so don’t lose it.

Showcase your testimonials, reviews, trust badges on your website, this will encourage both your existing and new customers to develop trust in your store.

These are some of the best Referral marketing strategies to follow before you set up your Referral program.

Best Referral marketing examples

Hope you now know what are the best Referral marketing strategies and how to implement a Referral program in your store.

Here are some Best Referral marketing examples by prominent brands to clear your perspective.


Not including Dropbox when talking about the best Referral program examples is a grave mistake.

Dropbox revolutionized Referral programs, and they built a unique refer-a-friend campaign that offers different Referral rewards.

Dropbox is a cloud storage platform, so they offered their product(space) as a Referral reward.

Referral marketing examples:


Their Referral program is simple. When you refer a friend to Dropbox, they’ll offer 500MB of storage as a Referral reward for both the Referrer and the Referral.

Their signups increased to a record 60 per day after they launched this Referral program.


How many of you know that Google has its own refer-a-friend campaign?

Shocking, isn’t it?

Yes, you can earn up to $7.50 when you refer a friend to Google apps for work, and he subscribes to G Suite.

Referral marketing examples:


You can offer exclusive discounts to your Referrals, and when these referrals activate their Google App for work account, the person who bought the Referral gets rewarded.

Always remember to reward your advocates for their efforts. This will help you increase your engagement with them. It’ll also motivate the advocates to bring in more Referrals.


Airbnb, a popular internet lodging mogul, also has a Referral marketing program to grab more customers.

Their refer-a-friend campaign is an enticing one that serves as a two-way incentive program to customers.

The Referrer can up to $25 when their friend finishes his first trip, and he can also earn up to $75 when the friend hosts somebody.

Referral marketing examples:


We’ve just grazed the surface of the best Referral program examples. Many eCommerce stores have initiated successful Referral marketing campaigns in their store, which you can find here.

Referral marketing best practices

So far in this Referral marketing guide, we’ve seen some of the best Referral marketing strategies used by eCommerce stores. Now let’s see how to use those strategies and initiate a Referral program in your store.

We’ll be listing the Referral marketing best practices to help you initiate a customer referral program.

Identify target customers

Identifying your target customers before launching a refer-a-friend campaign is one of the Referral marketing best practices.

Why should I do that?

Not every customer in your store will be willing to join your Referral program, so a little audience research will help you find suitable customers for your task.

You’ve got to identify customers that can bring you conversions effortlessly, aka your loyal customers.

To get those data, you must define buyer personas beforehand.

Buyer persona

This audience research will help you segregate your customers based on their engagement, purchase history, and behaviors so that you can tailor the content precisely.

Creating buyer personas will help you fish out your loyal customers and target your refer-a-friend campaign to them.

Maximize your customer base with Referral Program by Retainful. Start acquiring new customers now.

Choose the Referral rewards

Once you’ve defined your loyal customers, it is time to step up your game, you have to choose your Referral rewards. We have included a few referral marketing examples for your inspiration.

We’ve already discussed choosing the Referral rewards here. Here is a quick recap of what to expect.

Popular Referral programs around the world offer 5 types of Referral rewards.

Flat amount – The customer will be earning a cash amount of $10, $20, etc. as a reward. Probably it’ll be sent through Paypal.

Leesa cash discount

Cash discount – Instead of flat cash, customers will earn a cash discount like $10 Off, $20 Off, etc, from their order total.

Discount template

Percentage discount – Most common Referral reward, the customer will earn a percentage off like 15%, 20%, etc from their cart total.

Percentage discount template

Credit Points – Many prominent eCommerce stores offer this type of reward. Customers will earn credit points for referring their friends.

These credit points can be used for various purposes like purchasing, renewing their subscriptions, etc.

 Referral points

Free shipping – As we said earlier, eCommerce stores with overseas customers will offer Free shipping as a reward.

The shipping cost will be free for customers through this reward.

free shipping

So, these are the types of rewards that you can offer through your refer a friend campaign.

Choose who gets the Referral rewards

Don’t get confused. This is where you choose whom you want to offer Referral rewards.

There are three major categories.

  • One-sided Referral rewards
  • Double-sided Referral rewards
  • No Referral rewards

One-sided Referral rewards

Either the Referrer or the Referral gets the reward.

If your only motive is to retain your existing customers by increasing customer loyalty you can reward only your Referrer.

Likewise, if your motive is to acquire new customers only then you can only offer rewards to the Referrals.

Refer a friend

Double sided Referral rewards

Both the Referrer and the Referral will be rewarded.

If you want to acquire new customers and retain your existing customers simultaneously you can offer Double sided rewards.

Most eCommerce stores offer this type of reward. You can see it in the below referral marketing examples.

Cole haan

No Referral rewards

Don’t be surprised, there are many eCommerce stores that run Referral programs with no Referral rewards.

You can do this if your store has many loyal customers who’ll refer their friends without expecting anything from you.

But also remember, a non-incentivized refer-a-friend campaign might not motivate the customers to participate in it.

Alright, this is a crucial Referral marketing best practice. Once you select the rewards and choose who should earn them, you can launch your Referral program.

Launch the Refer a Friend campaign

Once you’ve made your decision about the rewards, it is time for you to launch your Referral program.

The simplest way to do it is by using a Referral plugin. These plugins are automated, they can do the work for you, and they also have every resource you need pre-installed in these plugins.

So, your work here is to choose the right Referral plugin based on your preference.

retainful customer referral program

To save you time, let us suggest Retainful, an automated Referral plugin that does everything mentioned in this article.

It can offer a cash discount, percentage discount & Free shipping coupon as Referral rewards. It comes with pre-built email templates which you can send to your customers for engagement.

Retainful dsashboard

Retainful also lets you track every aspect of your refer-a-friend campaign in real time through its insightful dashboard.

So, if you are going to launch a Referral program, install a Referral plugin in your store and watch the magic happen.

Display it on your website

Once your Referral program is up and running, you’ve got to display it on your website.

Probably, design a separate landing page for your refer-a-friend campaign. This will help you engage with your customers better and also increase your traffic.

Promote your Referral Program

Everything is set, you’ve launched your Referral program and now you’ve to take it to your customers.

Promoting your refer a friend campaign is a crucial task, you can’t skip it. You need to create various resources and promote it.

It can be promoted by,

  • Featuring it on the website
  • Creating a separate landing page for the Referral program.
  • Creating and sending Referral emails
  • Create blog posts related to your Referral program.
  • Advertising(PPC) on the search engines.
  • Through guest posts.
  • Invite your email list.
  • Run a Facebook ad campaign.
  • Call to action in blog posts.

These are some of the resources you can use to promote your Referral program. Create these resources beforehand and start promoting it once you launch your Refe a friend campaign.

Join Retainful now and unlock the full potential of referral marketing to propel your business to new heights.

Wrapping Up

Almost every eCommerce store needs a Refer a Friend campaign these days to keep their presence in the market. It is not hard, if you follow the right strategies and Referral marketing best practices like the ones discussed here, you can succeed effortlessly.

So, what are you waiting for? We’ve given you the hacks in this ultimate guide for Referral marketing, now it is time for you to use them and create the best Referral marketing campaign for your store. Maybe the referral marketing examples we provided can inspire you to launch a referral campaign right away.

What is a referral marketing?

Referral marketing is a strategy where businesses incentivize their existing customers to refer new customers to their products or services. It relies on word-of-mouth recommendations to acquire new customers and can be a cost-effective way to grow a customer base.

What are the 3 types of referral?

The three types of referral marketing are incentivized referrals, organic referrals, and experiential referrals. Incentivized referrals offer rewards or incentives for referrals, organic referrals rely on natural word-of-mouth recommendations, and experiential referrals are based on customers’ positive experiences with a product or service.

What is referral marketing strategy for B2B?

Referral marketing for B2B involves leveraging existing business relationships to generate new leads and customers. This strategy relies on building strong partnerships, incentivizing referrals, and delivering exceptional customer experiences to encourage recommendations within the industry.

How do you create a referral marketing strategy?

To create a referral marketing strategy, businesses should identify their target audience, choose referral incentives, establish referral tracking systems, and promote their referral program through various channels. Additionally, providing exceptional customer experiences and building strong relationships with customers and partners can also help drive successful referral marketing.

What is referral marketing strategy?

Referral marketing strategy is a marketing approach that relies on word-of-mouth recommendations to acquire new customers. It involves incentivizing existing customers or partners to refer new customers through various channels, and can be an effective and cost-efficient way to grow a customer base.

What are 4 types of referrals?

The four types of referrals are professional referrals, personal referrals, self-referrals, and informational referrals. Professional referrals are from other professionals, personal referrals come from friends or family, self-referrals occur when an individual seeks out services on their own, and informational referrals provide general information or resources.

What is an example of referral marketing strategy?

An example of a referral marketing strategy is offering current customers a discount or free service for each new customer they refer. This incentivizes customers to spread the word about the business to their network and can result in increased customer acquisition and loyalty.

How do you create a referral marketing program?

To create a referral marketing program, first set goals and decide on rewards for referrers and new customers. Then, establish a simple process for customers to refer others, keep track of referrals, and provide timely rewards.