Referral marketing is a very powerful strategy for promoting yourself and finding new customers: here's what it consists of and why it is so beneficial.

Think about it. If you have had a good experience and are happy, wouldn't you want to share it with everyone you know?

What do I know, maybe you discovered the place where they make the best pizza in the world: wouldn't you invite your friends there for dinner?

I bet they do.

As we often hear, word of mouth is the best form of publicity.

Here, you could apply the same principle in an identical way to promote your business, whatever it is. The idea is this: instead of simply hoping that people will speak well of you, you can voluntarily influence this process so that they are stimulated to do so in a more systematic and concrete way. 

It is what is called Referral Marketing: your products or services sell because someone recommends buying them.

But does it really work? Yes, it does: people value the opinions of others; they pay attention to the advice of family, friends, and influencers; and they trust the recommendations of those they know.

Not surprisingly, Referral Marketing is the secret weapon behind the growth of some of today's big brands and is considered one of the most valuable methods in terms of sales and conversions. Not only that, in the age of digital, where the goal is to create content that goes as viral as possible but at the same time the consumer's attention is increasingly dispersed, it offers a targeted, qualified, personalized and highly differentiating approach.

But let's go in order: let's see exactly What is Referral Marketing, why is it so powerful and what are the main benefits. In next article you will then find a whole series of strategies for implementing it in your business 😉

What is Referral Marketing

All strategies, from the brand positioning at brand awareness, from the public relations to becoming a thought leader e acquire authority, are based on a simple common factor: transmit value.

Marketing, in general, has just that as its goal, and sometimes you can achieve it even without making any conscious effort: if your content is good, people will spontaneously share it with others.

But this does not always happen.

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You, however, can take action by leveraging Referral Marketing itself!

What exactly is it? It is simple: it includes all the practices of promoting and sponsoring a company by word of mouth. It is a real strategy, the purpose of which is for your current customers, through their satisfaction, to encourage other people to come to you or buy your products. This is in exchange for a gift, perk or small promotion.

It's like you create some ambassador of your brand, which help you advertise your brand, thereby increasing your visibility and, as a result, leads, conversions and sales.

But in what way?

Identifying loyal customers and pushing them, with discounts and promotions, to entice others to buy. It can be with classic word of mouth, positive reviews or sharing links via social, e-mail or other platforms.

The mechanism is obviously that of the persuasion, where the advertising, however, is done by your audience and not by your company (here find the various strategies you can implement in this regard).

Mind you, this is not to be confused with affiliate marketing! This is a similar concept (it is always someone outside the company who recommends your products), but it is based on a purely commercial relationship, where the person who sponsors you does so in exchange for a commission, but without necessarily being your customer. We will also deal with this in more detail in due course 😉

Why Referral Marketing is so powerful

As I told you at the beginning of the article, we human beings are, by nature, social creatures. We naturally share our experiences with our friends, good or bad.

And that's why Referral Marketing is so powerful: it leverages something inherent in us. And since you can't stop it from happening, you'd better act on it on purpose, harnessing its full potential (and, of course, making sure it's mostly saying positive things about you!).

referral marketing

 Besides that, there are a couple of other good reasons why it works so well:

  • unlike classic advertising, which is obviously not perceived as neutral (because a company operates in its own interest by emphasizing the benefits of its offerings), Referral Marketing is based on authentic judgments and experiences expressed by real customers;
  • allows you to reach a "cold" audience, that is, one that does not know you, quickly, effectively and free of charge, avoiding the costs and complexities of promotional lead generation campaigns and overcoming the hurdle of mistrust and competition;
  • is based on consumer trust in your brand, which is expressed, for example, in positive comments or reviews; if you know and like a person, you are likely to trust his or her opinions, especially compared to a salesperson working on commission-and that really makes a difference when it comes to convincing someone to make a purchase.

The Benefits of Referral Marketing

Referral Marketing is a natural practice; recommending a good product to a friend is done anywhere, anytime. Can you see how effective it can be?

If I haven't convinced you yet, here are the main advantages.

#1 It is targeted

It solicits a niche, a well-defined audience, because it involves people who think alike and have similar tastes. You know what they say? "Likemakers get like-minded!" This is advantageous because, compared to advertising or other marketing channels, it allows your message to spread more effectively and reach your target audience more easily.

 #2 It has a very wide range

In the digital age in which we live, the possibilities are enormous: with a Facebook post, a story on Instagram or a review, the average consumer can reach hundreds if not thousands of friends (who, as noted above, trust his or her opinion) in a matter of seconds.

#3 It costs little

Doing word of mouth doesn't cost your current customers anything (of course there are ways to entice them to do so) and they can use any tool: social, the company blog or reviews on your site. It is one of the cheapest acquisition levers on the market because its strength comes from your customers themselves.

#4 Builds trust and increases loyalty:

Trust is fundamental to any business; the higher it is, the better your chances of being able to gain customers at the expense of your competitors. Likewise, it allows you to build a base of loyalists who will stay with you for a long time; this helps you consolidate your role as a thought leader and increase your authority.

#5 Increase brand awareness

It's a vicious cycle: the more people talk about a brand, the more awareness of it increases; consequently, traffic increases and so do sales. More sales correspond to more customers, and more customers lead to more satisfied people talking about your brand.

#6 Increases conversions

Leads that come from referral marketing are easier and faster to convert because they are about an already defined target audience whose trust is already established through the recommendations of those they trust. 

#7 It is easy to implement

It can be activated on all communication channels and integrated into existing campaigns without a major expenditure of cost, time and resources.


Well, I would say it is pretty clear: a Referral Marketing strategy not only stimulates trust and credibility, but also increases the number of relevant customers and improves their retention in the long run.

Do you agree?

To date, it is one of the most powerful and cost-effective ways to promote yourself and achieve maximum results, in terms of image and conversions, with minimal effort-that's why you absolutely must consider it in your marketing mix, no matter what industry you're in or what stage of development your business is in.

With this article, I hope I have inspired you to embark on your own Referral Marketing strategy: be sure not to leave anything to chance, but take action now and reap all the benefits.

Photo by Brooke Cagle on Unsplash

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