Refer A Friend: How to Increase Customer Acquisition

Alex Hill Mar 28, 2017

There is a unique opportunity at the intersection of new customer acquisition, and nurturing current clients. This opportunity is the often overlooked “refer a friend” program.


Getting your current clients to advocate for your brand and to reach out to their network of connections provides two clear advantages:

  1. It brings you new business. (At a much higher conversion rate than other acquisition channels BTW–more on that later.)
  2. It deepens the loyalty and commitment of that current client who is doing the referring.

Conversion rates for referrals are higher compared to other sources. According to Boston Consulting Group, “Consumers rely on word-of-mouth 2x to 10x more than paid media.” With referrals, much of the uncertainty and need for more research is removed for the potential new customer. We generally have more trust in the people we know, and therefore, we trust their recommendations more too.

People like to tell other people about the companies that they buy from and use. They get excited about it. And as they make the case to others about your brand, they are not only selling others on your behalf, but also reminding themselves of the specific reasons they like doing business with your company. Their personal commitment to your brand deepens.

It is important to note that all this of course presumes that your brand has a strong base of fans that have purchased from you on a frequent basis. If you are not confident in the percentage of your customers that would advocate for you, a thorough review of your client loyalty and engagement strategy is in order. A strong loyalty platform like SessionM can make this effort much easier and more profitable.

The goal is to harness the power of loyal customers by getting their referrals. Referrals will come organically as a happy byproduct of your stronger relationships with these customers. But we can do much better than this. We can do three things:

1.  Reach out — We can proactively reach out to clients through various channels (emails, in-app notifications, activity feeds, etc.) to ask them to refer their friends. 

2.  Make it easy – We can increase the likelihood that customers will act by providing simple screens in their digital touch points that only require the touch of a few buttons. For example, something like the screen below could be delivered in a mobile app experience, making it easy for users to post to one of their social media accounts, email their friends, or copy a unique code for some other form of distribution.

Refer a friend.png3.   Incentivize – We enable brands to offer various incentives to customers for referring their friends. You could provide incentives to both the referee and referrer. These could be points, $ off your next purchase, free item, refer 3 friends and get one month of free service, etc.

Refer a friend 2.pngYou can create multiple referral programs with different rules and incentives to test these against each other. Monitor the performance of your program(s) and continue to tweak and try things.

Refer a friend 3.png

Using a refer a friend program that is tied to your broader customer loyalty and engagement platform makes things much simpler. Having one place where all offers and incentives are managed regardless of the campaign or program will be easier on internal teams in the long run, and help your brand to avoid any confusion that a separate program may potentially cause your clients.

The SessionM platform has been designed to support this very important use case. If you’re not taking advantage of this channel, reach out and let us help you get started. We can provide not only the best practices but also the best tools to make it happen.