Referral programs for organic growth: Capitalize on customer loyalty

27 Jun 2022 | Sales & Marketing

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Hooshang Bakht

Brego Business was started with a mission to make entrepreneurship easy. Our goal is to help business owners grow and scale without having to deal with the day-to-day stress of running a business. We specialize in providing services that help business owners grow their businesses, including search engine marketing (SEM), social media marketing (SMM), LinkedIn marketing, video production, accounts receivable (AR), accounts payable (AP), internal audit, VCFO, and recruitment. We have helped more than 500 brands grow their businesses. We work closely with the clients to understand their unique needs and develop customized strategies that deliver measurable results.

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team for Organic Growth

A business runs to achieve multiple objectives. However, it is no surprise that one of the primary objectives of any company or a business is to grow. The question that concerns all is “How to drive growth”? Well, there can be several ways to accomplish this, but before delving into those depths, we must understand that there are essentially two kinds of growth – organic and inorganic.In the context of our discussion, the growth that a company would achieve by means of referrals, word-of-mouth publicity and brand awareness is termed as organic, whereas, that growth which would be a result of advertising and marketing campaigns would be termed as inorganic. Extremely crucial for the success of a company, organic growth has as its indicators increased output, greater efficiency, higher revenue, and improved cash flow. 

Since organic growth is going to be the focal point of this discussion, we must understand that a referral program is one of the most basic but still very effective strategies to boost your company’s organic growth. A well-thought-of and meticulously designed referral plan could grow your business by leaps and bounds.To put it simply, a customer referral plan helps you generate new customers by means of word-of-mouth publicity of your offerings by your existing satisfied customers. The motivation for your existing customers to spread the word about your products or services often lies in the ‘incentives’ or ‘rewards’ they receive on bringing in new customers. However, it’s not just the rewards you offer that’d help make your referral program a great success. Equally important is to have a really good product or service and, in addition, to be all ears for actual customer feedback.

Framework for creating a successful referral program

Almost all of us might surely have come across (and used) a lot of referral programs. And to be honest, most of them look quite similar. Could that mean there’s a ‘formula’ for building a great referral program? Well, yes! There certainly is. But before we go into the details of that formula and start defining a referral plan for our business, we must learn when to start our referral program. It is always wise to kickstart your referral program when you have a substantial customer base that is willing to advocate for and recommend your product to others.

Here are 3 major strategies to build a great referral plan. An effective referral program will consist of the below:-


Start by defining a referral product and be precise about what your referral reward is going to be. In today’s scenario, where every business relies on referrals to rope in new customers, you could capitalize on ‘scarcity value’ to boost your referral program. What this essentially means is that scarcity of valuable products can serve as incentive enough to drive referrals. In simpler words, if you limit the supply of some commodity/product and it’s not easily available in the mass market, its relative price or its demand is certainly going to increase. This will drive the price or value that someone gets from the product itself.

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For instance, Zomato leveraged the exclusivity of its “Zomato Gold Membership” for referral rewards. Whenever an existing Gold user invites a friend to the program, he/she got a 2 months subscription free of cost. Here, Zomato made the Gold membership look premier, and by rewarding it Zomato is emphasizing on its service value.

Therefore, try to associate some sort of tangible value with the reward you’re offering and then make it exclusive and scarce (concerning how many people can actually give out that value). This might sound counterintuitive at first but it can help build your product.

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Timing is very crucial for the success of your referral program. The word timing here implies that you must know the right time when to nudge or ask a customer to refer to a product. For this, you must understand that at what stage of using your product does a new user experience the true value of your product for the first time.


To take an example, AirBnb is one of those companies that put forth a really crisp and straightforward picture of their referrals. Post the completion of your journey/trip, AirBnb would simply send you an email asking you to rate your experience. You’d be presented with a simple and neatly designed widget where you could rate your stay on a five star scale. The moment you rate it five stars, you would be taken to a landing page. The first thing mentioned in the landing page would be for you to invite more friends and at the same, they would mention the incentive very clearly. Quite clear and explicit; the way it should be.

This pivotal moment is known as the ‘Aha moment’ – a moment of sudden insight or discovery. And that is precisely the most appropriate moment your customers are most likely to promote your product.


Always keep in mind that the more convenient it would be for your customers to refer to your products, the more frequently they will likely refer to them. To make referrals by your existing customers frequent, try to form a habit or behavior in them. For this, you can think of a ‘trigger’ (such as sending a notification to their phones) which would start to build a certain behavior where people would be nudged to take an action. The action has to be simple as well as convenient for the users to perform.Next, as soon as a user takes an action, he/she should get a reward that would promote them to make the same investment next time. In this way, over time, the external trigger would no longer be needed because the users would have formed a habit and they would do it by themselves.

Once the user creates a referral link, allow them to share that link in easy ways. Say, for example, since WhatsApp has now been embraced by a lot of people, therefore, it would be wise to give your user the option to directly share the referral link via WhatsApp.Also, make it easy for the recipient of the referral link to embrace your product. For this, emphasize the nature of the referral gift they’ve received and the relevant value they’ll have by embracing your product. Furthermore, accord them the convenience of choosing a method to sign up. Make sure the recipient can sign up using either Facebook or Google using just a few clicks, or else the user should also have the choice to sign up using his/her email address and a password.


Incorporating all the aforementioned points in your referral plan, is sure to drive more referrals and ultimately lead to organic growth. Many companies have successfully leveraged a combination of some or all of these factors and tasted the success of their referral program, resulting in organic growth. 


Referrals are a proven way to attract new customers and achieve organic growth. By incentivizing your existing customers to refer their friends and family, you can tap into a powerful source of organic growth that will help your business thrive. So, if you want to achieve organic growth, consider implementing a referral program that incorporates these key factors. With a well-designed referral program in place, you can harness the power of organic growth and take your business to new heights.


We leave you with a few case studies of companies that have amply demonstrated the effectiveness of a good referral program in accomplishing their desired goals.

  • Owing to their great referral program, LensKart, one of the most popular online apps/portals for ordering spectacles, successfully synced about 200 million contacts of their existing customers in just six months which increased their sales as well as the web traffic.
  • On similar lines, a startup based on blockchain technology named HowDoo leveraged the success of its referral campaign. The goal of their referral program was to make new users sign-up and share their Telegram channel. Surprisingly, they received as many as 40k subscribers shortly after they kickstarted their referral drive.

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