What is a Referral Program?

By Meagan Kral

What is a Referral Program?

Online marketing trends change all the time, but the power of person-to-person remains unchanged. Word of mouth marketing is a strong tool for building brand trust and recognition and will only get more important in the years to come.

With high costs and privacy laws affecting Facebook and Google ads, referral programs are more vital than ever. This issue will amplify with AI chat bots replacing search and SEO, making it tougher to reach your audience. This guide thoroughly discusses referral programs and their pivotal elements so you are ready to get started ASAP before ads and SEO collapse.

What is a Referral Program?

A referral program is a strategic marketing tool that helps businesses to expand their reach and increase customer loyalty through the most trusted form of advertising: personal recommendations of one customer to another or group of customers they have access to.

It’s a structured system where existing customers are motivated to share the brand with friends and family, in exchange for rewards. This can be in the form of a unique share link or a unique referral code. This method not only boosts brand awareness in an authentic and cost-effective way, but also creates a community of engaged users who act as brand advocates.

Harrys referral program

By intertwining incentives with word of mouth referrals, referral programs tap into the network of relationships, driving engagement and growth for your brand.

Types of Referral Programs

Digital referral programs come in various forms, depending on the business goals and marketing budget.

No matter which referral strategy you pick, be mindful on being too heavy handed. People recognize paid or sponsored advertising disguised as word-of-mouth referrals from a mile away. The trick to successful referral marketing is a simple program that encourages and incentivizes sharing and referrals in a natural, non-coerced format.

Let’s walk through a few of the top types of referral programs that exist today.

Refer a Friend (One Sided)

The classic “Refer-a-Friend” program is perhaps the most well-known, offering rewards upon a successful referral. The one sided program awards only the referrer for every successful referral they bring in.

Lucys Wine Box Referral Program

Refer a Friend (Two Sided)

Just like the Refer-a-Friend program, but two sided. The referrer would get awarded for the successful referral, while the referee would also receive a reward for opting in.

Doordash dual sided referral program

Multi Tiered/Unlockable

Tiered referral programs take the Refer a Friend concept a step further by providing increasingly valuable rewards as a customer refers more people, incentivizing continued engagement.

Unlockable (Single tired where you need X friends to unlock)

Redemption Points You get points you can redeem for discounts or other rewards.

Swheat tiered referral program

Affiliate Referral

Affiliate referral programs cater to influencers and content creators, offering them commissions for driving traffic or sales through their platforms.

Tiktok shop affiliate program

Wrapping Up

Feeling inspired to start your own referral campaign? Continue on into the next chapters of our guides to learn more about referral programs. KickoffLabs makes it super simple to build and launch a viral referral campaign in less than a day. No, really…in a matter of hours, you can have a referral system like those discussed up and running for your brand. Check it out today!

Read more Referral Programs with the next chapter:

3. What is a Referral Code?

Learn what a referral code is, how it functions, and the process for generating them for your customers.

Create a powerful referral program today!

Word of mouth marketing made easy with viral giveaways, referral programs, or product launches that can be setup in minutes!

Get a Demo