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Referral marketing program

by Duc Nguyen
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Why is referral marketing program important? Someone talking about you is quite normal. A lot of people talk about you, that’s a big deal. With a business, many people talk about them (except for bad things), their business opportunity will be huge.

According to review42

  • 92% of consumers trust referrals from people they know.
  • Friends’ social media posts influence the purchase decisions of 83% of US online shoppers.
  • Consumers referred by a friend are four times more likely to buy.
  • When referred by other customers, people have a 37% higher retention rate
  • B2B companies with referrals experience a 70% higher conversion rate.
  • Referred customers’ lifetime value (LTV) is 16% higher than that of non-referred customers.
  • Referral leads have a30% higher conversion rate than leads from any other channel. 
  • Referrals account for 65% of companies’ new deals.

That is all referral marketing affects a business. When you participate in a referral program, have you asked these questions:

  • What is the nature of the referral program?
  • How does a referral program affect businesses and customers?
  • Can you make money with referral marketing and how much do you make?
  • How can I make a lot of money with referral marketing? …

Find out all of this in my posts below! Basic principles are always a stepping stone for development.

What is a referral marketing program?

The idea of ​​introduction must start with word of mouth. People use good products or services, they will talk, share with friends.

two friends introduced each other about new products

But this is quite limited because it depends on the psychology and personality of the user. Realizing that, what have businesses done?

Stimulating people to introduce their products with rewards, this is called incentive referrals

Reward from referral marketing program

Businesses will encourage customers to share products and services to their relatives and families. Of course there will be a preference for sharing customers, which can be large and small depending on the strategy of each business.

In short, a referral program is a reward program for you, if you refer someone to the product or service of the business. In fact, you are making yourself a “potential customer” of that business

What causes businesses to create referral marketing program?

The business creates a quality product, it suits you, you like and use. So would you recommend it to your relatives? May or may not?

A leverage created by the business to motivate you to take action, a reward for you when you introduce a relative to the product of the business.

You are the one who will understand the hobbies, behaviors, etc. of your friends, relatives, not businesses. And the referral program is happening on this issue.

So, the referral program relies on the trust of everyone together. Is that right?

Online marketing referral. How do you think about it?

The speed of information spreading online online is extremely terrible. Currently, everyone, whether relatives or friends are using their phones and computers to operate online online.

Applying referral marketing to online networks is something that countless businesses have been doing. In a way, referral marketing is viral. This person spreads to others, friends spread to each other, relatives spread to each other, … based on messages, email inbox, social networks …

What will businesses get from the referral marketing program?

Clearly, the clients included in the referral marketing are potential customers. They are the people who will buy, use the service or the worst happens, they will always follow you.

What will businesses get from the referral marketing program


The business will

  • Acquire leads file, get loyal customers
  • Products and services are widely advertised
  • Profits from the sale of products or services.
  • Brand enhancement in the eyes of the user, they will be famous

How does the referral marketing program work?

Nature: word of mouth

      1. Businesses create a good product, a great service.
      2. Provide customers with incentives, rewards and happiness. This is what motivates customers to introduce their business to their friends.
      3. Customers tell their friends about the business and get new customers
      4. New customers will be taken care of through tools such as email, whatsapp, Social network … Email marketing is the best weapon, it is used by most businesses and they are very successful.
How does the referral marketing program work

A software is used to track all these activities. Deep down in this workflow is a trust. Businesses and customers trust each other, trust between customers and their friends

The difference between affiliate marketing and referral marketing

The relationship between the introduction and customer

Affiliate marketing: Affiliates don’t know who their customers are, but the customers keep track of affiliates. Affiliates can be a publisher, a celebrity and an influencer, someone who can catch people’s attention.

So there will be a certain distance between the business and the customer. This relationship may break down at any time.

Referral marketing: Customers and referrals have a close relationship with each other, they can be friends, relatives and they trust each other.

When being introduced by relatives, the trust from customers to the business will be stronger, and a number of loyal customers will also be created.

Customer loyalty

Affiliate marketing: customers come to businesses because influencers recommend. However, the influencer does not know them, the relationship between the influencer and the customer is not tight, leading to the relationship between the customer and the enterprise will not be sustainable.

Confidence level is not high. So, in the long run, there’s the potential to lose customers over time. Therefore, customer loyalty is not high

Referral marketing: Customers are referrals, they are also loyal customers of the business. Referrers will recommend to friends, relatives … trust is very high. So, according to the chain reaction, the introduced people will completely trust the business and will become a loyal customer of the business again.


Affiliate Marketing: The reward is cash, which is the commission earned when a customer buys the product, as a percentage of the value of the product.

Referral Marketing: To encourage referral marketing, businesses can pay a lot of different rewards. It can be discount codes, free products, refunds … even exchanging rewards in cash.

How to Promote, Share

Affiliate Marketing: You need to have a quality blog or social media channel related to the product you want to recommend. It will be clearly stated by the business in their affiliate page.

Referral marketing: you can somehow place referral links anywhere. On social networks, blogs, inbox or simply chat box with your friends.

Who does the promoting?

Affiliate Marketing: Referrers are largely not the customers of the business, they operate because the business pays them a commission. The majority will be website administrators, bloggers, publishers … they will enter into the affiliate marketing agreement

Referral Marketing: Referrers, themselves a loyal customer of the business, they want to bring the company’s products to their relatives. For the sake of simplicity, they used and trusted the product


Affiliate marketing: because the problem of the customer and the business is not too close and not to the level of loyalty, so with an affiliate marketing program, anyone can buy the business’s products. This is the reason why it is difficult for businesses to control their customers

Referral Marketing: Referrers will recommend to friends or relatives. Referrers are loyal customers. With a referral marketing mechanism, new customers also gradually become loyal customers of the business. And more importantly, businesses know who their new customers are. So the management and control of customers will become simple.

Advantages and disadvantages of the Referral Marketing Program

Advantages of a referral marketing program

Word of mouth is allowed

According to Bigcommerce, 74% of consumers identify word of mouth as a key influencer in their purchasing decisions. So word of mouth is a strong point?

Target customers exactly

Referrals are loyal customers. They understand the product, trust the product and trust the business

New customers are acquaintances of the “referrer”. Or simply people who follow “referrer”.

Customers who are participating in the referral program, they will know who is in need of the product
>> Businesses get customers exactly and match their products and services.

Reward – Commission [Motivation]

Reward – Commission is leverage to promote a referral program. When businesses pay a commission for a conversion, the reward recipient will be satisfied, they will be motivated to join a referral program. It is best if the reward recipient is both a referral and a customer.

Create more loyal customers

“Referrer” are loyal customers who use the product, understand the product, believe in the business, and receive a referral reward.

New customers trust in referrer. They use the service again and are satisfied. They again participate in the referral program, they receive referral rewards, which are taken care of by the business.

Businesses get a potential customer, loyal customers.

You are supported by many different channels

The essence of referral marketing is word of mouth. But your friends are too far away, or you simply want to recommend the product to many people.

      • Social networking site many followers
      • Blog many people read
      • Youtube channel has many viewers ….

They will help you! That is the advantage!

Weaknesses of a referral program.

In my own experience, a referral program has 6 deadly weaknesses. It’s also easy to see the problem, here are the weaknesses

      1. Not enough money to pay bonus for referrals. Think of this, your capital is not much, the program spreads too fast, you do not have enough money to pay bonuses to referrals. Belief will be lost!
      2. Delay in paying bonuses: Referrer will think scam program. So the referral program of the business will be worse.
      3. The referral reward is too bad: the referrer will not be interested to participate
      4. Poor product: you won’t have customers, don’t talk about referrals
      5. Poor marketing strategy
      6. Uncontrollable customers

How do I make a lot of money from referral marketing?

A lot of referrals program are going on, but I always have my own options. The referral program must satisfy it.

      • Pay prizes in cash or convert them into cash
      • Rewards apply to both referrals and clients.
      • It is possible to withdraw money and many people appreciate it.
      • There is no limit to referrals or limits but a high reward value
      • Can apply many forms of marketing (including on blogs)
      • Does not require you to pay to join.
Select a referral marketing program

Here are the steps that I have taken, which is a bit personal but can help you.

      1. Find out if the program offers cash rewards or is redeemable for cash? Are there many good reviews? Is there enough trust or not?
      2. Buy a service, try it yourself, or join the program (you need to know if the product is as good as many people say and understand it)
      3. Research product market and user habits. Choose the right marketing channel to promote (can’t stop at word of mouth)
      4. Detailed instructions for people on the effects, features and benefits when using the service. Or maybe give them detailed instructions on how to make a lot of money from the program
      5. Show people your experience of “service, product”. Must be realistic
      6. Calling people to join the program (register for the referral link provided by the business), what will they get after registration? Maybe a $ 1 bonus after signing up, for example.

I will only do programs that are useful to users, this way it is recommended not to apply to products that are lousy, fake or anything harmful to users. After the service has a problem or scam needs to notify them immediately

Summary of ways to help you promote the referral marketing

It’s time to run your campaign, spread the word about the referral marketing. However, which method is effective? Here are ways to help you promote your referral marketing

Email marketing

Lots of tactics are created around email. Everyone uses email to communicate, receive newsletters … why don’t you get into this problem?

      • If you create a landing page, use a magnet (something attractive and free) to get people to sign up. you’ll receive user emails and then apply customer care campaigns. Why not ?
      • Include referral link in email signature, that’s not a bad idea, right. This tactic works especially well for those who interact with customers via email
      • Add a referral link to the thank you or confirmation page when customers sign up to receive something. You need to maintain insert referral link for the next email sending, should not break. Make customers trust in your program with periodic mailing.
      • Let your campaign work automatically instead of having to send it manually. You do not need to monitor too much, tired and time consuming. Using automatic mailing, you can send according to schedules, habits and customer behavior …

Social marketing

Social is essentially a place for people to share, exchange and follow their friends. The number of people on social networks is very large and can include Twitter, facebook, instagram … What I want to mention here is that the referral link can be placed and shared on social. Here are some ways to help you:

      1. Build a profile or Page social in the form of an expert standard, which means you have to show you’re knowledgeable and in-depth about the product you’re introducing.
      2. Make friends with many people in the field in which you are participating in the referral program
      3. Post to the binoculars and related pages (may include an introductory link)
      4. Each social has their own advertising program, take advantage of this. A lot of people are on social channels, but these channels have clear and precise targeting. This is an opportunity to help you reach the right customers.
      5. It’s also a good idea to insert the referral link into the media bios. When social media sites have tons of news out there, Bios is where they can easily see you most.

Build a blog or landing page

People go to google to find what they need and a informative blog or landing page will help them do that. And what you do yourself, build and optimize yourself is a blog. So what are some strategies for your blog:

      1. Put a referral link on the homepage, footer or sidebar. Where people can see the link you share.
      2. Write an in-depth article about the service you are recommending and place a referral link in that review. The best for this is you use a call to action, put the referral link below it, great!
      3. Using google adword and social ads, pull traffic to the page you placed the referral link
      4. Using SEO to push the blog to the top with the main keyword in the introductory product review article.
      5. Combine email marketing on your blog or landing page

Video marketing

Many video channels can help you connect with people and bring referrals to them. Inside are YouTube and Vimeo. So what is the strategy for these video channels?

Post a lot of videos on the topic of introduction, especially real videos, videos that prove you’ve earned a reward. Please also record the instructional videos for them to follow. The trust will stem from that.

Next, ask people to subscribe and what they will get from it. Put the introductory link below the description, including the first comment so people can easily see the referral link

Rely on influencers

The people who influence them all have big channels, with a high following. Based on them you can give your referral link to a lot of people.

Nothing is free, let the influencer use the product or split the reward from the referral program for them.

Facebook Messenger – Telegram, WhatsApp or WeChat

These are very popular chat apps currently. Do not underestimate them, they help users to promote conversations, increase intimacy with each other.

Each application itself is currently blocking link spam, so don’t think about it. The key to success with the referral marketing program are these apps. Use unwise strategies. You will see a bright spot at the end.

These are common ways to introduce links to people. I do not recommend the way to spam phone messages, emails or on social channels. The above methods try to guide you towards pricing for the product you recommend. Please try not to disturb the user

The whole article is based on my way of thinking, if something goes wrong or has more useful information, please comment below so I can improve.

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