8 Simple Ways to Increase Customer Referrals

Larry VanDenHandel on November 04, 2019

Whether you’re an e-commerce store, brick-and-mortar, B2C, or B2B, referrals are good for the business. Out of all lead-generation methods, customer referrals are the greatest way to drive sales.

Compared to other leads, people who have been referred to your brand have a higher chance of buying. They’re 4x more likely to buy than non-referred customers. In addition, referrals have 16% more LTV (Lifetime Value) than non-referred customers. It’s no wonder big companies spend so much money on customer referral techniques — it always drives great returns. 

In this article, we’ll show you 8 ways to increase customer referrals

1. Simply ask

It’s natural for loyal and satisfied customers to share how they feel about your product or business. And if you’re product or service is as good as how you market it, referrals happen even without your intervention by word-of-mouth.

Unfortunately, it isn’t the case all the time. Sending referrals your way, even if what you’re offering is excellent, doesn’t come as easy to some other customers. Even loyal customers, though they are willing to refer you to others, not everyone actually does.

But of course, you shouldn’t just ask them out of the blue. Ask at the right time — either after your customers send you a positive response, or right after purchasing. If possible, throw in incentives as well to encourage them to do so.

Here’s an example of how Dropbox asks for a referral and offers more space in return:

2. Go above and beyond with customer service

At the minimum, your customers expect you to care in case there’s a problem with your product or service, and they expect you to treat them right every step of the way. But why stop there? Though it’s true that you can’t please everyone, you have to prove to your customers that your business is also referral-worthy.

In a sense, brands build relationships. And more often, people refer people and not just the business itself. That’s why you have to do whatever you can to make your customers talk about how awesome your customer service is.

3. Give referrals to others

The golden rule applies to brands as well: give referrals unto others if you want to receive referrals too. Giving referrals to others is one of the best ways to boost your referrals considering that referrals from businesses have a 70% higher conversion rate. However, be sincere and don’t do it just for the money.

Receiving referrals in return is part of the process. But don’t be pushy and expect a return right away. Be understanding if the business you’re giving a referral to can’t give you a referral right away. Extending the gesture of referring would influence those businesses to think of your business when there’s a potential referral they can refer to you. This could also start a domino effect and branch out to other businesses as well.

4. Create case studies

A case study is a great way to market your brand. Showcase a customer’s problem and present how your solution helped them, and share the details of the results. Though it’s your customers that are in the spotlight, it’s your brand that gets the praise.

For example, here’s the case study Lootly made for Audi Mods:

Though this takes a bit of effort, what you’re getting in return is worth it — social proof, reputation, marketing, a showcase of your work, and most of all, referrals. You can expect the business or brand to share the case study with its network.

5. Use social media

You’re certainly missing a lot if you aren’t using social media in your business marketing. Engage with your customers on social media platforms and encourage them to refer a friend. Of course, it works best if you can provide incentives for every referral you get.

See this Facebook post from MealPal informing their fans about their “Refer-Friend” program and its rewards:

Don’t forget to make it easy for your customers by putting links in the post. That way, they don’t have to find the referral link themselves.

6. Give rewards

Rewarding the referrers and their referrals is a great way to increase your customer referrals. You can give out discounts, coupons, movie tickets, gift certificates — almost anything. When done properly, you’ll be turning the referrals to referrers — creating a cycle. 

Offering incentives to both sides (referrer and referral) is very appealing. With the rewards building up, referrers would gather more referrals to get more rewards. And you won’t need to worry about the cost, because the more referrers there are, the more business your brand will get. 

7. Gamify your program

Lastly, hold a game or a contest to encourage shoppers to refer your business to friends and families. Make the competition online and spread it to all your networks. If your business is brick-and-mortar, inform your buyers by setting up posters and boxes where they can drop their referrals off.

Prepare appealing prizes to make the contests attractive. The higher the reward, the greater the effort will be of your customers to refer people to your business.

8. Make things easier with Lootly

There’s no need to do everything from scratch by yourself. Lootly is an incentive platform you can use to help grow your brand. You can easily install this app in one click for your online store. One of the features of Lootly is a referral program.