7 Reasons your Business Needs a Referral Program

The digital landscape has changed the way the world communicates. People exchange ideas, share information, and consume advertising through text, email, forums, chatbots, and social media rather than phone calls, door-to-door salespeople, billboards, and fliers. But when it comes to growing your business, word of mouth continues to stand the test of time as your best sales strategy. Referral programs are built around word of mouth, and here are seven ways your business can benefit from them.


Would you be more likely to purchase a product because a sponsored ad on a website you were browsing recommended it, or because your coworker came to work raving about how much they loved it?

People are more likely to buy something if it is recommended to them by someone whose opinion they trust. We know how paid advertising works, and while it’s useful and can definitely produce results, there’s an element of skepticism that can be avoided in a referral program. When you market through referrals, your customer trusts you, and their contact trusts your customer.


Strong feelings spread fast and inspire action. When someone is unhappy with a product or service, enough options exist in most markets that they can jump ship quickly to a competitor. When someone is happy, they have no reason to shop around. People like to stick with what they know when they are satisfied, and they share that satisfaction with others. One happy customer can refer your business to a new customer, giving you the opportunity to hang on to both of them and establish a solid foundation of long-term customers.


Referrals stem from positive experiences, so your reputation will grow as word spreads that you are creating those happy customers we mentioned above. That reputation you worked so hard to build spills over to new potential customers through referrals, so you don’t have to start back at square one every time you want to expand your reach.


Your customers are more likely to be loyal if they feel valued. People love perks, and referral rewards are a way to give back. If customers know they will continue to get incentives for being a loyal customer and recommending your brand, they are more likely to 1) stay put and 2) tell their friends and colleagues about those perks.


You already know that the only way to get new customers is to expose your brand to new people. Referral exposure isn’t just any exposure, though. Leads you earn through referrals have the most potential because they are brought in through networks of people already using your product or service. You don’t need to throw spaghetti at the wall to see if it sticks when people are already enjoying the pasta you have made.


Most advertisements aren’t free, especially if you want to make sure your message and offer gets in front of the right people. Sometimes you can drop significant dollars just to generate one new lead or gain one new customer. When you draw people in using a referral program rather than more paid advertisements, your customer acquisition cost can drop significantly.


Conversation boosts awareness, and nothing gets people talking about your brand more than positive experiences and loyalty perks. Engagement is the foundation of a referral program. As people recommend your product or service, conversations are sparked that can build traction and generate buzz around your business.

Most companies don’t ask their own happy customers to promote their business via referrals. Even if they do, it’s not done automatically or consistently, and rarely measured or quantified.

With WarmUp, your business can:

  • Automate trackable referrals for existing and new customers with automatic reminders and triggers.
  • Track shares with customers’ personal networks through customized emails, social media posts, and text messages.
  • Automatically add new referrals to your CRM pipeline.
  • Rewards customers who provide referrals with monetary or non-monetary incentives.
  • Launch a robust and comprehensive referral program in as little as 30 days.

To learn more about how a referral program can help you grow your business, click the button below to get started with WarmUp.