How to Increase Customer Referrals: Implementing Incentives for Referrals

Customer referrals are powerful tools, especially when it comes to your sales and marketing efforts. With most people relying on the opinions of family and friends to make their purchasing decisions, referrals from satisfied customers are a great source of new business.

A 2021 study from Nielsen found that consumers cite reviews and word-of-mouth recommendations as some of the most trustworthy sources along the buyer's journey. From luxury mattress companies like Purple to SMS marketing companies like Emotive, many companies now see the importance of customer referrals in the sales pipeline. Both companies implemented referral programs rooted in rewarding customers with gift cards when they refer a friend or colleague. Emotive even provides a larger reward after a referred lead signs up for their software. Here’s a look at what makes referral programs work—and how they can work for you.

Why Customer Referrals Work

According to Nielsen, "92% of consumers trust recommendations from people they know," while less than 60% trust messages from company websites, display ads, or traditional media. Customer referrals work off the inherent trust people place in one another, compared to the lack of trust they may have in companies. They also allow potential customers to research and compare companies more quickly before making a buying decision. Companies that take advantage of referrals gain verified leads from trusted sources and spend less time generating and nurturing leads.

How to Gain More Customer Referrals

Closing a referred lead may be easier than closing a cold lead, but how do you gain more customer referrals? There are several approaches:

Social Shares

Offering small incentives to gain social shares can help spread the word about your product or service. You can implement social media contests or giveaways with larger prizes or incentivize your audience to share your post by giving them a small gift card. Social posts from current customers to their network can also help grow your social following and allow potential customers to get to know your company.


Although online reviews may not be from a lead's close friends or family, they do count as a referral. Considering more than 93% of people look at reviews before purchasing, they’re a powerful source of information, according to Qualtrics. Knowing how to ask for reviews—and how to incentivize them properly—is key to generating warm leads from reputable review sites.


According to Entrepreneur, "A good testimonial has the power to convince even your 'tough sell' visitors that your product or service really made a difference in your customer's life--and can help them, too." Much like generating reviews, sourcing testimonials is a matter of asking the right customers and rewarding them for their time. These rewards can pay for themselves when potential customers visit your website and see how your product or service can help them.

Direct Customer Referrals

Implementing a direct customer referral program like Purple or Emotive can significantly increase the likelihood of receiving a qualified referral lead. Based on our referral program, consumers are five times more likely to refer a lead if there are incentives for referrals. Incentives don't have to be expensive either; they can range from $1–$5 for app downloads to $50–$100 for a B2B software purchase.

How Reward Link® Helps You Gain Referrals

Just how effective are incentives? We asked 19 companies that use our reward solutions for referrals and found that over half experienced a 61%–100% increase in referrals since partnering with us.

Increasing customer referrals is easier with powerful incentives. With Reward Link®, you can send recipients a choice of popular gift cards, instantly through email. Request a demo to learn how Reward Link can help you gain more qualified leads.

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