6 Requisites for Growth through a Winning Referral Strategy


According to LinkedIn, 84% of B2B buyers begin their purchasing process with a referral.

Dropbox grew from 100,000 to 4,000,000 registered users in 15 months, with 35% of daily signups coming directly through their referral program.

Research confirms that referred client retention rates surpass average retention rates by approximately 20%.

Uber, a San Francisco lifestyle business in 2009, is now valued at nearly $41 billion. CEO Travis Kalanik, states “Uber spends virtually zero dollars on marketing, spreading almost exclusively via word of mouth. I’m talking old school word of mouth, you know at the water cooler in the office, at a restaurant when you’re paying the bill, at a party with friends – “Who is Ubering home?” 95% of all our riders have heard about Uber from other Uber riders. Our virality is almost unprecedented. For every 7 rides we do, our users’ big mouths generate a new rider. “

Referrals are the best and most underutilized client acquisition channel. Referrals drive quicker cycle times from prospect to customer and these customers remain more loyal, longer. Given the facts and data and the above examples, shouldn’t your growth strategy include a focused effort on driving referrals?

Here are 6 critical success factors to consider as you build or hone your referral program:

  1. Identify your advocates and why they are fans. Net Promoter Survey (NPS) scores are one of the best indicators. High scores and segmentation analysis will help you hone in on the characteristics of your promoters. Also consider these additional methods of gaining insight and capturing what matters most to your customers: Blog Post comments, Voice of the Customer discussions, Your Delivery Partners, Your newest clients

  2. Create a relevant incentive/recognition structure that encourages referrals. Consider the Uber growth through word of mouth. This is not an accident, Uber has an extremely focused referral reward system, pushing out messages such as “Invite your friends to try Uber through January 20th, and for each friend that rides you’ll receive $20 in free Uber CAD credit instead of the usual $10.” How will you reward your referral sources? Keep this in mind, rewards and recognition do not have to be monetary, they can include things like early sign ups, VIP access to information, etc.

  3. Make it easy for referrals to connect with your organization. Once you have been given a referral, be sure that your organization is prepared to act quickly upon the recommendation. Make the experience great for both the referring source and the new potential client. Set a goal for a frictionless referral experience. Do not let time lapse in this process for speed is the currency of today. Map your processes and test them prior to go-live.

  4. Avoid channel conflict. You likely have a sales channel today and leads come in from a number of areas. Allow all sales channels to experience and be rewarded for driving referrals. What gets recognized gets repeated. Recognize anyone in the organization who can increase referrals and the momentum will build.

  5. Promote it through multiple avenues. Social media, marketing materials, webinars, phone apps, SEO and SEM, etc. Go all-out on how you educate the market and your internal employees on the program. Keep it fresh and relevant by constantly updating the promotions and the recognition; changing it up keeps people coming back.

  6. Provide visibility into your referral activity. Create a program that allows advocates to easily check referral and reward statuses, and find information about the program.

Butler Street’s driving force is to help companies and their people grow. Our ClientFirst A.R.E.® philosophy includes diagnostic tools and methods to identify your best clients and turn them into active promoters.

Contact us and let us share our experience.