How to Power Customer Referrals for Your Business

Customer Referrals

Loyal customers are the lifeline of any business. Of course, there’s the benefit of repeat purchases from the people who love you. But, have you also considered the business growth that comes from the referrals these customers make?

Consumers talk frequently about the products and services they love and recommendations go a long way. In fact, people are 4 times more likely to buy when a product or service is referred by a friend. Also, 92% of consumers trust referrals from people they know and 77% of consumers are more likely to buy a new product when learning about it from friends or family.

The power of word-of-mouth marketing doesn’t stop with friendly conversation. It also extends its reach into the social media world and online reviews. This is evidenced by the fact that 81% of U.S. online consumers’ purchase decisions are influenced by their friends’ social media posts and 84% of people trust online reviews.

What’s particularly interesting is the power of referral marketing is equal across all demographics. 83% of Gen Z buyers, 85% of Millennials, 83% of Gen Xers, 80% of Baby Boomers, and 79% of the Silent Generation trust referral marketing. This means everyone from 90-year-old Grandma Delores to 17-year-old cousin Joe is highly likely to try a product or service if a friend or family member recommends it.

What does this mean for businesses? It means understanding who your best customers are so you can get more like them.

Let’s discover how to make that happen.

Incentivize your loyal customers

If the goal is to get your customers talking about your products and services, then it’s great to employ a program that helps motivate customers to do so. In fact, it’s one of the best business decisions you can make to positively affect your bottom line.

If you’re having a hard time believing your customers will actually refer friends and family through your loyalty program, let’s take a minute to look at some compelling stats:

  • Over 50% of people are likely to give a referral if offered a direct incentive, social recognition or access to an exclusive loyalty program.
  • 39% of respondents say monetary or material incentives such as discounts, free swag or gift cards greatly increase their chances of referring a brand.
  • 55% of consumers share their purchases socially on Facebook, Twitter, Pinterest and other social sites.

Your customers are already prone to share their purchases with friends and family via social media or word of mouth, but when you incentivize them through your loyalty program, they are even more likely to offer a referral.

A secret weapon for customer referrals

There are several potential ways to offer incentives for referrals, but not all methods are created equally or work as effectively.

If you’re looking for a reliable and error-free way to track referrals, you need a loyalty and referral software that will automate the process and help drive incremental revenue. As a matter of fact, when specific case studies about referral software were analyzed, researchers found a 10% increase in word of mouth (off and online) translated into a sales lifts between 0.2 – 1.5%.

Among the many features of Thanx is a referral campaign called Thanxgiving.

We provide all our merchants with a built-in referral program that offers full access to data visibility. With Thanx, gone are the days of blowing through your customer acquisition budget by offering untrackable giveaways and incentives.

Instead, you can build referral incentives right into your loyalty program, and it’s as easy as this:

  • Loyal customers get an incentive for referring their friends
  • Loyal customers’ friends get an incentive for trying your business.
  • You, as a merchant, watch your business grow in real-time taking comfort in the ROI-positive guarantee of Thanxgiving.

Not only is the program easy to use, Thanx focuses on making referral marketing more effective. How? Thanx has a built-in Net Promoter Score feature that asks customers one simple question: How likely are you to recommend us to a friend or a family?


This question, along with any written feedback, will help you identify which customers are happy with your brand and which ones are willing to engage in your referral program.

Customer feedback

When you use your Thanxgiving data, you can quickly identify which customers are your happiest, or those who have reported an NPS of 9 or 10. These are the best customers to refer you more people like them.

NPS Promoter business impact

With this approach, you don’t waste time trying to engage random people who have no interest in your business and you don’t waste time trying to engage upset customers by asking for referrals. In fact, this program also helps you quickly respond to anyone who has reported a low NPS to address customer service issues and turn what may have been an initial bad experience into a positive experience.

At Thanx, we’ve found that referrals are more than 50% more likely to result in a new customer: 92% of consumers turn to people they know for referrals above any other source. Millennials, in particular, are way more likely to trust a referral from a friend than a traditional marketing campaign.

Additionally, the customers who are acquired through this process are more valuable in the long-term. According to Deloitte, customers required through word-of-mouth marketing have a 37% higher retention rate.

Thanxgiving helps you give customers the option of sending referral messages through more personal channels like SMS, email, and social media. This promotes a more personalized recommendation from a friend and encourages friends to try your services.

With Thanxgiving, your word-of-mouth marketing is powered by data, highly personalized, and has already proved a huge success for our merchants.

Wrap up

It’s no secret that word-of-mouth marketing is nothing if not a powerful way to increase your bottom line. However, with the advent of technology like Thanxgiving from Thanx, it’s now possible to more effectively guide the word-of-mouth process to yield better results. You can use data and smart automation and personalization tools to turbocharge your referral program, focus your messages, and get better results.

Don’t wait any longer. Try Thanxgiving today.

Learn more in our free guide, the Ultimate Guide to Customer Engagement and Loyalty.