A 7-step guide to creating a successful referral programme

A 7-step guide to creating a successful referral programme

Wednesday March 01, 2017,

3 min Read

It is said that the best form of marketing you can do is the one your customers do for you. Word-of-mouth is such a powerful medium only because it comes from experience and it isn’t a paid form of promotion. Companies are encashing this word-of-mouth promotion through referral programmes.


Image : shutterstock

They reward customers who bring them more business. This is one of the easiest ways a company builds its customer base. Even from a customer point of view, word-of-mouth makes sense. If you were in a new city and had to eat out, you would rather ask a friend about the local favorites than trust Google.

Companies like Ola,Uber, Box8, etc. have all built their referral programmes keeping in mind how to reward their customers. Businesses, especially startups, are benefitting a lot from the loyalty/referral programs. It is very important and the need of the hour to have a referral programme which ensures revenue generation with an economical cost per acquisition – all this and a valuable incentive for the customer. Here is how you can build a sound referral programme:

Webiste UI/UX

If your user interface and user experience, also known as UI/UX, are not up to the mark, there are high chances that the customer will not refer your product to a friend/relative. Few important factors here would be overall design, content on the page, real-life images, easy navigation, and smooth flow.

Placement of referral programme

Through your app/website you have a find an appropriate place for the referral programme which isn’t too on the top but also not too obscure. A well placed referral programme is one which takes less than a minute to find.

Incentive system

A successful referral programme is one which is well-balanced in terms of the benefits or value it carries. Current customers should get enough incentive to get their friends on board and the friends should also get enough incentive to actually try the product.

Communicate the plan

It is said that there are two pillars to a successful referral plan – incentives and promotion. It is very important for you to highlight the benefits of referral to your customers. If they are not aware of the incentives you are giving them, there is not point of the referral programme.

Communicate the plan outside the your customer base

Communicating to current users is one thing and communicating it to potential users is another. Brands just focus on both aspects of communication. Keeping your promotional efforts around your referral campaign even to a larger audience does the trick.

Customer service

Referral programs are often a source of getting a lot of customer interaction. As a thumb rule, always issue an FAQ note which should resolve all potential queries. And if there are still any queries, they should be handled by a dedicated customer service team.

Timely realisation of the incentives

This is the actual karmabhoomi for any referral programme. If it does not work, it speaks poorly of the brand. A referral plan which promises to reward its customers on referrals, it should do so within the promised timeline or say goodbye to the customer forever.

A referral programme needs nurturing in terms of time, resource, and manpower. It has needs careful deliberation failing which can be disastrous for the brand, especially if it’s a startup.