It Pays To Share: Refer-A-Friend Programs Boost Customer Acquisition And Engagement
We’ll let you in on a secret: Cometeer coffee keeps Forrester’s B2C marketing research team running. When our colleague evangelized the innovative coffee company in a team meeting last year, the brand quickly found its way into many of our team members’ daily routines — and it’s not just because we like really good coffee. The brand’s referral program extends a significant discount off future purchases for both the existing (referrer) and first-time customer (referee), a compelling incentive for folks who enjoy good coffee and a good deal. Cometeer also offers customers merchandise incentives for referring more customers.
Cometeer is one of many brands that are increasingly leaning on referral programs for new customer acquisition. According to Forrester’s Q4 B2C Marketing CMO Pulse Survey, 2022, 54% of respondents said that they had a referral program embedded in their broader customer loyalty program; another 38% said that they have a stand-alone customer referral program. Persistent challenges in audience acquisition, such as data deprecation and media inflation, have made referrals a cost-effective salve for marketers.
We’re excited to share new research that outlines the ways brands can leverage their loyal customers to build an army of advocates through referrals. By maximizing the impact of customer referral programs, brands can unlock critical benefits such as:
- High-value customer leads. Customers acquired through referral programs share many of the same interests, values, and behaviors as the loyal customers who referred them. Connecting with these prospects is a great way to expand your roster of loyal customers.
- Incremental sales and revenue. Every successful referral nearly guarantees two future purchases: one from the referrer and one from the referee. This immediate impact looks great on marketers’ bottom lines.
- Lower cost per acquisition. Referral program startup costs are lower than large-scale, continuous media investments. Though referrals will never replace the reach of paid media, diversifying acquisition channels can supplement the deficits of today’s fragmented media landscape.
- Increased customer engagement. Referrals don’t just bring in new customers but will also enhance your relationships with existing ones. By giving loyalists an opportunity to engage through referrals, marketers can support traditional loyalty outcomes such as customer enrichment and retention.
Want to learn more? Feel free to set up an inquiry or guidance session to talk about all things referrals. We look forward to hearing from you!