Trust marketing and the power of cross-channel customer referrals


It is something I want now

It is worth going to some effort to get it

If I share it could be worth a lot to me

Referrer Incentive



My friends will value my recommendation

My generosity will shine through

My friends will be impressed that I am associated with the brand

I’m in the middle of other things right now

I can’t think how to describe it to my friends

I can’t think what to say or how to share it

Required Effort

Social Risk

I’m anxious about how it will make me look to friends

I don’t want to look like I’lm spamming my friends

I don’t want to be seen to profi t from my friends

They are the best friends of your best customers. As a result, quality begets quality. These new referred

customers typically spend up to 25% more than the average on fi rst orders. More often than not, customers who were acquired through referral campaigns carry a signifi cantly higher than average lifetime value to the business, as much as double the average customer lifetime value, is not uncommon. Achieving these kinds of results lies in our

understanding of our customers’ behaviours and the key motivating factors in their decision to refer our products. The kind of logic that’s running through our minds (a

lot of the time, unconsciously) as we weigh up whether a social action is, literally, worth doing, goes something like this: If I contribute x to this person or group — how large is

the risk of this action being socially ignored or rejected vs. how confi dent am I that this action will be socially recognised and rewarded? And it is this exact psychological dynamic that is key

to successful referral marketing. When done well, social referrals are the most powerful form of marketing there is. Referring a product or service to a friend is, before anything else, an act of trust, reciprocity and

(hopefully) social belonging. When discussing the psychology of referral, I often

come back to the metaphor of balloons and weights. In a nutshell, the absolute best referral offers put forth

extremely compelling incentives, as well as instilling the potential referrer with a sense of impending ‘social capital’. In other words, confi dence that they will look good and that the offer will be received well by friends. Conversely, such offers are never weighed down by

perceived high effort to gain the reward, nor ‘social risk’ — the anxiety over an offer being received negatively by friends. Key to fi nding this ‘sweet spot’ is constant testing and

optimisation to truly understand what works and what doesn’t for your customers.

PROMOTING AND DELIVERING CROSS-CHANNEL REFERRAL PROGRAMS Once we’ve understood and optimised the basic elements of referral campaigns, success hinges upon where, when, and how we choose to promote and implement the offer. This is when we need to identify our customers’ ‘greatest points of delight’ in their routine interactions

Number of referrals

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