Referral Programs and Why Your Store Needs One​


A referral program is a cost-effective marketing tool that incentivizes your customers to share your brand with their friends and family. By using a referral program, your business can strengthen its marketing strategy by relying on its customers to spread brand awareness and bring your business to new customers.

Here are eight advantages of referral programs and why your store needs one.

Referral programs turn your customers into
brand advocates

By asking your customers to share your brand with their close friends and family, you are effectively turning them into brand ambassadors that spend more time thinking about your company. This allows your customers to use your brand to define a part of their life and share that with those around them. By rewarding customers who adopt this relationship with your business, you can easily strengthen your word-of-mouth marketing and expand your customer market.

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Referral programs deliver your advertisements in an authentic way

In a world where we constantly encounter advertisements, it becomes easy for people to ignore ads as white-noise and move on with their day. In contrast, we are much more interested in new products when we hear about them from our friends and family. By having your customers share your product, your advertising can be delivered in a way that is more captivating and more likely to bring you new customers. 


Referral programs build your brand's

According to a study, 92% of consumers are more willing to trust their friends and family. By using a referral program to turn your existing customers into brand advocates, your business is able to deliver reviews  to potential new customers in a way that is trusted. 


Referral programs increase your retention rate

By rewarding your customers to engage with your business and share it with their friends, you motivate them to continue using your services. Customers become connected to the points they acquire incentivizing them to choose your business over its competitors. Because of this, referral programs inherently drive repeatable purchases and strengthen your business’s customer retention.

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Referral programs bring
your brands promotion to
social media platforms

According to a study, 65% of social media users learn about new products on social media. By having your customers share your brand on social media, your business easily targets like-minded potential new customers with little effort. Because social circles often share preferences in products, it is likely that an existing customer sharing your brand on social media will lead to new customers. 


Referral programs bring high

The price your business pays for a referral program are a small investment to make compared to the revenue it can generate. Referral programs offer businesses a low-cost tool that effectively targets potential new customers bringing them brand awareness through conversation or social media posts. If done correctly, the price of rewards and discounts you offer is always much lower than the revenue it generates.



Referral programs help your business engage
in market segmentation

By implementing a referral program that can rank customers according to their referral score, your business can easily organize its customers according to loyalty. This tool can be used in many ways and can help your business engage in market segmentation. This allows you to divide your broad consumer market into different groups like age, gender, interests, and spending habits allowing you to create more specified marketing strategies for each audience.

Segmentation is one of the most underrated referral program perks as it will help you understand better your audience.

loyalty customer

Referral programs bring
automated growth
to your business

Once your business is well-established and you’ve developed a reward system that has been proven to work, you can begin depending on your referral program to create automated growth. If your business has a healthy base of existing customers that work towards unlocking the rewards your referral programs offer, your business will be consistently advertised, bringing you brand awareness and new customers.

Referral programs and why your store need one

A referral program is a cheap and highly effective tool to generate new business while nurturing your existing customers. With a little bit of effort, you’ll understand your audience and grow your business more effectively.


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