Viral Marketing With User Referral Emails

Continue to Part II: Power of Referrals»


Referral marketing is a form of word of mouth marketing in which people are encouraged to recommend products and services for a certain company in exchange for commissions, fees, discounts, prizes, or other rewards. Referral programs can be used by small businesses or by large companies. In fact, Google has a referral program which pays member websites to recruit others to their AdSense program. Referral marketing is typically a major part of such industries as network marketing, which rely heavily on word of mouth, direct sales, and the human component of sales and marketing. These programs function on the premise that customers and employees are members of a team, so treating them as such helps referral programs gain traction. Customer service and testimonials are invaluable.


The costs for a referral program are whatever you decide them to be, but obviously the scale of the program should be in line with the size of your company. Some businesses offer as much as 100% of the sales for referrals, because the market is so tight and they wish to remain competitive. For most people, obviously, that is too much, but the amount should be worth the time of the people who are recommending others, without being too much of a financial burden to the company.


Setting up referral programs is quite easy and shouldn't take much time to set up, but waiting for the word to spread and for results to show can take a bit of time.

Action Plan

The only real work that referral marketing requires is to come up with a plan which fits your demographics, and offers rewards that are tempting enough to entice people to refer friends and other customers, but which are economical enough to make them beneficial. Time should be spent studying the economics of different systems, as some incentives work better for certain types of systems. You should decide if you are going to pay per lead, per sale, and just what exactly constitutes a referral to your company. After all this is done, you should market your program, and perhaps think about joining a larger program, such as ValueClick to get the word out about your new strategy.

Continue to Part II: Power of Referrals»

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