1 October 2019

by Spark Eighteen

How to execute referral marketing for your business?


No matter how big digital and outdoor advertising gets, word of mouth is always going to be one of the best performing networks for any business size. People trust their friends and acquaintances much more than any ad running on their Facebook feed. According to Forbes, here are some interesting numbers about word of mouth/ referral marketing 

Nielsen says that 92% of consumers say that they would prefer recommendations from their friends over an advertisement.

The Word Of Mouth Marketing Association ( WOMMA) and American Marketing Association ( AMA) conducted a study.It revealed that 64% of marketing executives believed that word of mouth was better than any other form of marketing.

The surprising fact is that only 6% of them believe that they have been able to master it.

This post talks about mastering referral marketing from a digital perspective. Let’s dive right into it!

1. Understand your customer base that can drive referrals.

In order to drive successful referrals, you need to present the opportunity of “spreading the word” to consumers. This must be done to the consumers who have shown a significant level of interest in your business. Here is how

Explore your email list and social media

If you have been doing digital sales for a while now, email marketing and social media would definitely be in one of your performers. Email lists are a marketing resource that has information about people who trust you. These people have made a buying decision with your company at least once. As of social media, it can help you identify people who want to stay connected to your business and products

The key here is to understand patterns and segment your audience. 

Let’s consider a B2C example of an e-commerce site that caters to women in the age group of 25 to 35.

In this case, here are some patterns you will look out for

  • People those who have ordered more than twice in 30 days for at least 3 months consistently are customers who are loyal to your website.
  • Customers who shared a custom referral link (if you had given them one or they simply forwarded your mail) with their friends right after their first purchase. They are also possible audiences who are happy to share your products.
  • People who have been retweeting and sharing your Facebook/Instagram content ( which was around products, contests , news about your company. They are also qualified customers who can drive referrals.

In a B2B example where you are Oilfield equipment supplier, I would recommend the following

  • Customers who have been using your product at least 2 times a week consistently for 90 days will make up for a great set of audience.
  • Customers who have clicked through at least 50% of the times on the email links in your promotional mail campaigns are another great set.
  • People who came on your website from organic search result due to your SEO are another great set of audience.
  • Followers of your LinkedIn page and twitter account who actively shared and interacted with your company news, product updates and other related post. These are another bunch that you should be targeting.

2. Segment these customers and decide the marketing channels you need to use

Once you have decided the patterns that you need to look out for, you should further narrow down by adding concrete numbers. These numbers must be added around the same like number of orders per week.CTR rate in mails, average time spent using the software etc.

The next step is to decide the marketing channels that you need to use to put across the messaging for referrals.

For this, you need to ask yourself a simple question : Where does your target audience hang out?

In terms of social media, your B2C audience would be more active on Facebook, Instagram and Twitter. In terms of B2B, LinkedIn and Twitter marketing should be your focus areas.

When doing email marketing, the B2C audience would be more likely to use their personal ID’s whereas with your. Here are some segments and marketing mediums that I have created which can help B2C and B2B firms.


3. Analyze and optimize for better conversions

Marketing campaigns need to be optimized regularly. You cannot rely on the fact that a couple of strategies/hypothesis will work forever.

To optimize properly, you should follow these steps

  • Note the important numbers with every campaign like referrals sent, referrals converted, email subject lines that worked, difference between different segments for targeting.
  • Tweak your marketing messaging and create A/B tests to check different subject lines, targeting options, time of launch and color scheme with social media.
  • Understand what works and what doesn’t. Use these insights to formulate the future campaigns and avoid the non-performing strategies.
  • The goal should be to maximize referrals at a minimum cost.

Some of the tools that will help you with the same would include

  • Google Analytics to understand user behaviour and goals
  • Email marketing tracking within your mail software ( like mailchimp etc) to understand numbers like Open Rates, CTR etc
  • Social media tools like TrueSocialMetrics, Social Bro, FB Business Manager etc to understand the impact of your social posts and their promotions.
  • Marketing automation tools like Hubspot and Infusionsoft that will help you send targeted mails and campaigns based on user behaviour and engagement with your content.

These are some of the strategies that have worked for us while executing referral marketing. We’d love to learn more about your experience regarding the same.

Spark Eighteen

Spark Eighteen is a brainchild of innovative young minds and a group of alarmingly out-of-the-box thinkers who happen to see the world of marketing from a new age perspective. With a proven expertise in the field of Brand consulting, Digital Marketing and Website Design and Development, our team of designers, developers, and creative heads work towards delivering maximum results, tailor-made to all your business needs.
Spark Eighteen

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