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5 Characteristics of a Strong Referral Program

When done right, a referral program can be a beneficial part of your business marketing plan.

Despite all the new communication technologies, word-of-mouth recommendations remain one of the most powerful ways to generate business, with 84% of consumers saying they trust recommendations from people they know.* Obviously, any good marketing strategy will try to take full advantage of those recommendations. But what’s the best way to do that?

For many companies, the answer is to create a referral program. By incentivizing customers to send you more customers, you can convert word-of-mouth into sales. Of course, not all referral programs are created equally. If you want to increase the chances of your referral program succeeding, you should incorporate these five characteristics:

5 Characteristics of a Strong Referral Program

If you’re going to invest in a referral program, don’t hide it on your website or other marketing material. Develop a media strategy that promotes it relentlessly. In particular, take advantage of social media marketing, regularly posting about the program on Facebook, Twitter, and Instagram. That way, customers can easily share info on the program with others, expanding your reach.

When you’re selling your product or service, you have to convince people to spend money. But your referral program only has to convince people to provide some information in exchange for a reward. As such, the marketing for your referral program doesn’t have to be sophisticated. In fact, it will work better if it’s as straight forward as possible. For instance, if you run a vacuum cleaner company, your message could be as simple as: “When your friend buys a vacuum, we’ll give you $25 cash.” The clearer you make the message, the better.

Referral programs work by incentivizing referrals. But if your incentive isn’t enticing enough, you’re likely to see a poor return. When deciding on what you’re going to give customers in return for them referring your business, take time to consider/research what form of incentive will motivate the largest number of people who use your product or service. In many cases, cash is a good option, but depending on your specific business, you could also give out gift certificates, products, or collectible specialty items. The key is understanding your customer and what will motivate them.

If you make signing up for your referral program complicated, you’ll lose a lot of referrals. Whether using a dedicated URL or pieces of paper to sign people up for your program, you want to keep to a minimum the amount of info a customer has to enter. When you contact those who’ve been referred, make it easy on them as well. Provide direct links and/or clear contact info and, if you’re including some form of discount, make it easy to claim.

The last thing you want is to invest in a referral program that doesn’t integrate well with your current business structure and operations. For instance, if you have a sales force, you’ll want to make sure referrals generated from your program are referrals your sales force can actually use and are delivered in a streamlined manner so they don’t get lost. Every business functions a bit differently, so you’ll want to tailor your program for your company’s specific needs and operations.

How Can You Learn More About Business Marketing?

Referral programs are just one of the many marketing strategies you can use to improve your business. If you want to make the most of marketing opportunities, you should consider earning a marketing degree, like an MS in Marketing. This master’s degree can help you gain an in-depth understanding of marketing practices and prepare you to successfully market your company or start/advance a career in marketing.

While earning a graduate degree from a top business school used to be inconvenient for working adults, online education is changing that. Now, many of the best business schools offer online marketing degrees, including a master’s in marketing. Instead of having to upend your life to earn an MS degree, online learning allows you to complete your coursework from home and on a flexible schedule that gives you the power to attend class at whatever time of day works best for you.

Earning an MS in Marketing online can help you learn how to make the most of marketing initiatives like referral programs. It’s a great way to improve your chance at success.

Walden University is an accredited institution offering an MS in Marketing degree program online. Expand your career options and earn your degree in a convenient, flexible format that fits your busy life.

*Nielson, Under the Influence: Consumer Trust in Advertising, on the internet at

Walden University is accredited by The Higher Learning Commission,