The Power of Online Referral Marketing

First it was newspapers.

Then it was radio and television.

Packs of coupons in the mail.

The yellow pages.

Advertising has always been a necessary way for commercial services to gain new customers and grow their business.

But in the last 20 years, advertising methods have evolved faster than they have at any previous point in history.

With the advent of the internet, marketing has gone through several phases, from pop-ups, to sidebars, email campaigns, and now user-reviewed sites such as Yelp!

If you don’t stay on top of things, you may fall behind on your marketing efforts, and that’s never good for anyone.

Just in the last two years, a new shift has occurred, and referral marketing is now the biggest slice of the advertising pie.

What is Referral Marketing?

Referral marketing is as simple as it sounds; it drives traffic to your website through referrals from other sources.

We’ve always relied on word-of-mouth when selecting products and services we wish to spend our money on, and this is just a tech-centered version of the same thing.

And though it’s simple, the ways in which you can gain referrals can be a lot more complex.

You can have social media users share content, link to it from their own page, rave about a product online, or post a review of your product on a website.

These are all different versions of referral marketing.

Referrals in Numbers

In 2014, 31 percent of traffic to sites came through social media sharing, as opposed to search engine results.

That’s, by far, the largest share of traffic being generated through social media sharing, and it shows no sign of backing down.

At the same time, 45 percent of marketing budgets are still spent on search engine advertisements, as opposed to 13 percent that is spent on social media advertising, with similar results.

This infographic from Buzzfeed shows that, while businesses spend more than three times the amount of money on search engine ads, social media ads still manage to return a slightly higher number of referrals.

How to Use This Info

If you wish to get the best ROI for your advertising budget, you should shift the lion’s share of it into social media advertising.

There are dozens of tricks you can use to boost the number of shares that your content gets—there are literally hundreds of books and websites devoted to this, such as The Like Economy and Killer Facebook Ads.

Many of them are free and cost nothing more than some time and research.

If, however, you do have a bit of a marketing budget that you can shift, there are some great ways to boost your sales through referrals, such as joint venture or affiliate marketing.

Study Your Analytics

You want to define your market as closely as possible, and find out how and where they are most likely to spend their online time.

Primarily, what sites do they flock to, and what influential people do they follow?

Who do they listen to?

This 2013 study from Nielsen showed a whopping 84 percent of people put the most trust in products based on the opinions of people they know, the highest of all of the sources.

In the number three spot was in consumer opinions posted online, with 68 percent of people saying they trust that information.

The best way to get your market to buy your product is to get people like them to say they like it.

Start a Referral Marketing Program

If giving away a reward or a gift for a referral gets you a new customer, it’s worth it.

There are numerous ways you can do this.

One is, of course, to present your customer with a free gift when they refer a friend.

Another is to award “points” in a rewards program, and to offer points to your customers for the referrals they send your way.

There are numerous apps that can help you set this type of program up, such as Ambassador, Invite Referrals, Campaigned, or Expect Referrals.

Some of them are free, and don’t cost anything, but if you have some money to spend, it may be worth it if the app comes with added features such as tracking results.

Pay Someone to Plug You


One of the primary ways to get someone to spend money is to get someone they respect and whose opinion they value to tell them that they absolutely MUST have this new thing.

Remember earlier when you were studying your market to find out who they follow?

Find the individuals, celebrities, blogs, and channels who have the highest numbers of followers from your market, and make a deal for a sponsored posting.

Generally, the more followers they have and the more influential they are, the more it will cost, but it’s worth every penny.

Sometimes, you can even get someone to do a full-out review of your product and share it, simply by sending them a sample.

Just make sure your product is worth buying before you send it, or a bad review can ruin you.

Flattery Works Wonders

Reach out to an influencer in your niche and tell them you’re a fan, and you’d love to have their opinion.

Send them a sample and ask them for a quote about your product if they like it.

Not only are you likely to get a quote, they’re also not likely to resist sharing your blog post or site when they find out they’ve been referenced, which is a great way of getting someone to plug you without paying.

It’s not a guarantee, but you have everything to gain, and not much to lose.

Getting high-profile referrals is a fantastic way to increase your revenue. Investing a large chunk of your referral marketing budget in social media programs is a pretty good bet.

Take advantage of it while so many are still trying to invest in search engine advertisements, and you’ll have a jump start on your competition, as well.

image credit: shutterstock

Susanne Loxton

Susanne Loxton is a business enthusiast who combines her interest in career and personal development with a passion for writing. On a daily basis, Susanne works for Aubiz, a compendium of knowledge about companies in her native Australia.

View all posts by Susanne Loxton