Could your business benefit from a referral scheme?

23 October 2019

As a means of establishing loyalty and advocacy among your customers, a referral scheme (or referral marketing) is a powerful way to boost a business. By offering a credible product or service that’s of a high standard, the words of loyal, satisfied customers can inspire others to seek out and partake of what you’re selling.

Referral marketing can be the most trusted form of advertising for a business, providing it’s pulled off properly. And the best way to start spreading that all-important word-of-mouth is through a referral scheme.

Here, we’ll guide you through the ins and outs of referral marketing, touching on its advantages, some well-known examples and a step-by-step guide to effectively get a referral scheme up and running.

What is a referral scheme?

A referral scheme is a systematic way of getting customers to refer others to your business. They reward existing customers for their loyalty, while also incentivising new customers to seek out your brand, increasing the long-term revenue of your products or services in the process.

What are the advantages of referral schemes?

Referrals increase trust

A large advantage of referral marketing is that customers tend to trust referrals, especially if they’ve come from a friend. In fact, consumer polls suggest that recommendations and reviews from customers tend to be more trusted than conventional advertising methods.

Reviews show the best and worst things about a business. If customers feel invested in your business, they’ll leave feedback; referral marketing has a positive impact on a customer’s emotional response to your company. The happier they are, the more likely they are to leave a review. Essentially, these customers become brand advocates and when they feel as though they’re part of a team, they’re willing to help where they can.

It creates return customers

If the incentive you offer is a return discount, then you’re more likely to create repeat customers as a result. When someone refers a friend, it shows they like your business and are more likely to buy from you again. Throw in a return incentive on top of that, and it’s perhaps easy to see why people will come back to your business.

When both you and the customer can see the benefit of such a mutual relationship, it only serves to strengthen things as a result. 

It’s social-media friendly

If your business uses social media, then referral marketing can go hand in hand with it. The referral software used by many organisations utilises social sharing buttons. A click of such buttons helps to spread the word about your business, a simple act which goes a long way towards adding to your credibility. The more people see you, the more they’re inclined to look into what you’re about.

Creates cost-effective marketing

Referral schemes tend to be more cost-effective than traditional advertisements, thanks to their potential to add reach to your campaign. And because it’s others that, in theory, will be doing the referring, there’s surprisingly little effort on your part.

You can find your biggest fans

By tracking your referrals, you can see who is constantly sending new customers to your business. These are the people you want to keep on your side, as these kinds of brand advocates typically have a high social media following, and can get their followers to listen.

Narrow down these top referrers and reward them in the appropriate way, whether it’s reaching out personally or giving them an extra incentive. You’d be surprised how far a small gesture like this can go.

What are some well-known examples of referral schemes?


Perhaps one of the most famous examples of referral marketing, the online storage company offered 500MB of space to both referred and referrer for free. The result? A sixty per cent increase in signups that saw users sending 2.8 million direct referral invites by April 2010.


Airbnb’s masterstroke referral scheme was a two-way incentive program to users that’s still available today. Referrers can receive up to £23 credit as for every friend they invite. The friends will also go on to earn up to £34 off their first referred trip – so, everybody wins.


The famous ride-sharing app builds referrals into its product, which means every time an account is activated, that customer receives a personalised referral code. Each time an account is created using this referral code, both parties get their next Uber trip free.


The note-taking software launched a referral program which awarded points to customers each time they make a referral. The points could then be redeemed in order to grant free access to the software’s premium features. Additionally, every time a customer’s referred lead upgrades to Evernote Premium, the customer who submitted the referral receives additional points.

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How to effectively implement a referral scheme

Optimise your web design

The user experience plays a big part in the opinion potential customers will form of you. A website that’s difficult to navigate is going to turn everyone away, so make sure your website is as streamlined as possible. Whether it’s market research or competitor analysis you glean improvements from, make sure your customer’s first port of call is as user-friendly as possible.

Make the referral program easy to find

While the referral scheme doesn’t have to be the first thing customers see, it also shouldn’t be a challenge for them to locate – no one will join it otherwise. It’s often a good idea to include a link to your referral program in the footer across every page of your website.

Promote the program to current customers

Repeat customers should be the first group you approach with your referral offering. These are loyal customers who have probably already mentioned your business to others, both on and offline.

Share your program in any email marketing you do, and provide a compelling call-to-action that’ll entice them into signing up.

Reward both parties

As we noted above, many of the best examples of referral schemes offered something to both advocate and referral. This two-way incentive can have a powerful effect when it comes to boosting your brand.

Train your customer service

Your support team must be to up to speed on your referral scheme’s ins and outs. Optimal customer support keeps customers happy and ensures they keep coming back, despite any potential hiccups.

Market outside of your current sales funnel

After promoting your referral scheme to current customers, consider going after those who haven’t yet used your service or product.

Gazprom Energy is a leading and award-winning business energy supplier, helping thousands of small businesses manage their gas and electricity contracts. To find out more about what we can offer your business, visit the homepage or call us today on 0161 837 3395.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.

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