How to Grow Your Business with Product Recommendation Referrals

Today, advertising is everywhere. From television to radio, and print media to online, prospective customers are constantly bombarded by advertising messages and slogans. And there is significant evidence to suggest that over-exposure is leading to “banner-blindness”, so not only are your prospects becoming increasingly frustrated with the constant stream of advertisements, it is increasingly likely that they might not even acknowledge them.

It is unsurprising then that many businesses have decided to change tack and combat the falling numbers of customer interaction head-on. This is where the increasing interest in a return to more traditional word-of-mouth marketing, or referral marketing, has stemmed, but how can your business encourage its consumers to recommend your products and services?

Why Referral Marketing?

A successful referral programme can be valuable for businesses aiming to attract more users and, if employed correctly, can successfully help companies to grow quickly and affordably.

Loads of research has been done on the topic of product recommendations, and many studies have found that a person is more likely to use a service if it has been recommended to them by a reputable source. After all, who are prospects more likely to trust – their family, friends and other satisfied customers, or an anonymous business which has no existing relationship with them?

Acquiring customers through referrals is generally a lot cheaper than by direct marketing. The idea behind referral marketing is to incentivise existing customers – typically with discounts, gifts, or the opportunity to win attractive prizes – in order to take advantage of their social connections and attract greater business. The result is a much lower cost-per-contact than most other marketing campaigns, such as outbound advertising, and with fewer expenses.

Download our guide to attracting more users for your SaaS business

Actively Promote

To achieve success, your business must first mobilise, then incentivise its consumers. As with any new project or operation, clear, concise and effective promotion is a key contributor to success. In the case of referral programmes, a considerable amount of the active marketing is undertaken by existing customers, but this only serves to highlight the importance of the principal communication.

To generate the largest number of organic prospects from your referral campaign, it is imperative that the primary message is delivered to your consumers competently and effectively. You should make it dynamic and engaging, with attractive images and well-written content. And you should deliver it seamlessly and consistently to your consumers, either via email, social media or print, making sure that the design remains in-line with your brand.

At this juncture, the primary aim of your programme is to increase awareness. And, although this should entail a consistent stream of marketing messaging, it is important to be sensible in your approach. As discussed, there is nothing more frustrating for a consumer than over-exposure to marketing material. So, with this in mind, you should craft and deliver enticing marketing materials to engage your customers, but don’t bombard them with so much that it becomes an annoyance. Enabling an ‘opt-out’ clause can demonstrate that you have your consumer’s interests in mind.


Incentivisation is a key aspect of any referral campaign and the primary reason that many consumers choose to adopt the programme in the first place. Although it is important to encourage existing customers to recommend social contacts with incentives – such as discounts, gifts and/or prizes – they can also be used to help persuade prospects to adopt products and services. This process is known as two-sided incentivising because the benefits are available for not only the referrer, but also the person referred.

Your business should adopt this method of incentivising consumers and prospects for two reasons. Firstly, existing customers who are in the contemplation stage are far more likely to recommend you to friends and family if it’s visibly beneficial for every party. And secondly, your prospective customer uptake will be far greater if they are directly benefitting.

Selecting the correct incentive to best mobilise your consumers and achieve optimum results can become a sticking-point for many businesses. And this is where the importance of understanding your industry, your demographic and the needs of your current consumers becomes crucial. For example, in the competitive world of server hosting, offering your existing customers the provision of greater customisability may not have the desired impact, due to the already high levels of freedom that many solutions have. However, something like offering your consumers the opportunity to try out a bare metal cloud solution for a limited time offer, would likely have dramatically better results.

Communicate and Manage

Many companies find producing a successful referral marketing programme much more challenging than they had initially expected. Often this is because when businesses decide to embark on a referral campaign, they fail to follow through on the crucial communication and management stages.

In the fast-moving world of cloud solutions, effective customer communication is vital, and it becomes even more so when you’re running a referral programme to attract a greater number of users to your product. You must be prepared to talk to new prospects about a wide variety of things, including the benefits of your service, what it is you can offer them and why they should choose your service. But it is also important to remember to keep up a high (but not irritating) level of contact with existing consumers in order to ensure customer retention.

Effective management during the customer acquisition process can be imperative to the success of your referral programme. And ensuring that all the links in the chain are functioning as smoothly as possible will not only enable you to capture the greatest number of leads, but it will also help to relieve any headaches further down the line. With the right promotional strategy and incentives, you’ll have customers queueing up to help you by referring their friends and family. But this doesn’t happen by accident, and effective communication and comprehensive management play an integral part. To learn more, download our cheat sheet on how to attract more users.

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