Referral Marketing: The Marketing Gift That Keeps On Giving

As an Australian digital marketing business, how often are you taking stock of how good you are at reaching customers? Ideally, you should be regularly revisiting your marketing strategies and implementation of them every other day to see if your actions are producing the required results and corresponding with what you think your clients want offline. When attempting to reach the average person who might be in the market for digital marketing, simply relying on digital marketing alone (just because you’re good at it) won’t cut it. You need to mix traditional paid communication with a peer-to-peer marketing approach – one where word of mouth and referral marketing rule supreme.

Australian consumers are less trusting than ever. Trust in businesses has declined significantly in the past few years and consumers are bucking the trend and rejecting the opinions of authorities and influencers and rather making judgements themselves or relying on their social media friends to tell them what to think about stuff (politics, brands, food…anything!).


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Want proof? How about fake news?  This is a term that has become part and parcel of our daily news consumption and for most of us, it’s a real head scratcher. Gone are the days where we can simply trust the talking head on our TV screen. Customers are learning the hard way that what appears in their inbox or up top on their news feed is not always true, and it’s effecting how they digest targeted online advertising and email marketing. Do a quick experiment: quickly switch tabs to YouTube and watch the first video you see. Anything. (Tell us what you watched in the comments below, just for a laugh). While you watched, did you at any point think critically about the video? Did you ask yourself if perhaps someone could have sponsored that story? Was the Monster energy drink in the opening shot paid for, or just there organically? And either way, would this have swayed the message of the video? As consumers, we’ve really learnt to be on our toes!

Australia might have one of the highest digital ad spends per user in the world, but it’s obvious Australians are ready for a different approach. Over 80% of consumers actively block adverts online using software, with one in five going at least a month without seeing an ad online.

So is all hope lost? Not at all. As a digital marketer looking to grow your business, you have an opportunity here. Customers still believe that companies can have the power to make changes that count in the world around them. Word of mouth or its more evolved relative, referral marketing, is a great way for you to accomplish this change. It’s the first step you can take towards integrating your communications by paying as much attention to what happens online as what happens offline.

Best of all, referral marketing completely overcomes the online suspicion epidemic that we’ve described above. Since the message is coming from a trusted friend or colleague, often in person, and not from a Facebook or Google algorithm that someone could have paid to influence, it’s much more likely that the recipient will trust the message and messenger and react favourably.

As Facebook CEO Mark Zuckerberg says, “People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.”

Greet the messenger

Referral marketing is the process of “deliberately influencing, incentivising and tracking the organic process of word of mouth marketing by creating timely, useful and relevant interactions between existing customers and people they know”. That’s a mouthful. Basically, it’s business networking and introductions but in the case of referral marketing, you’re actively making the effort, tracking that effort and repeating what works.

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Referral marketing is also one of the most affordable, and simplest ways you can market or prospect to another business and it adds nicely as a supplemental activity that builds on your existing efforts.

Digital content is driving offline conversations that consumers and businesses are having as word of mouth or referral marketing, with an estimated one in four brand conversations involving something seen online. So referral marketing is something that is already happening, whether you’re aware of it or not, and it’s involving the online communications you create.

The trick is to find a way to systemize your referrals and ensure that they match any digital marketing undertaken online. What you need is a strategy that looks at the bigger picture and measures referrals online and offline to make the most of your marketing performance and get those business goals met.

Who can participate…and HOW?

First off, it’s important that you realise that referral strategies don’t work for all businesses. It’s a strategy with a low initial investment and it also takes time. And while it can apply to any business, it works best with those offering a higher priced service or product, as a backup for your existing marketing. It also works pretty well for small and new businesses.

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If used correctly though, referral marketing will net you a better, more steady flow of quality clients that buy more often, in larger quantities and over a longer period of time.

So how can the average Australian digital marketing agency get started with referral marketing, with little or no experience and even less cash? We’ve created a resource intended to accompany this effort, download it here.

There is no single best way to implement referral marketing, but here are three steps that you can consider before you get started:


    In referral marketing, you need to know what you’ll be offering as an incentive for clients, colleagues or family members to respond – and that this dangling carrot will be something that they will respond to. It doesn’t matter what it is. It just has to be something that adds value.

    This could be a simple sales plea that tugs at the “good-guy” strings of your friend, letting them know how much you can support their referral. Or you could offer them a commission of the work you pick up from their referral, works great for existing clients. Either way, it needs to be worthwhile to them.

    Another great example of this is offering your contacts something that they can in turn offer their clients. This could be an offer to run a free initial social media marketing campaign as an introduction to a social media marketing service you offer.

    Imagine how incentivized your contacts would be to look like the “good-guy” to their friends by introducing them to someone who is going to give them something for free. They win with a boost in their reputation, their friends win because they get to trial a valuable new service and you win by getting more business.


    Many businesses make the mistake of wanting to launch straight into large referral marketing programs on a national level. We reckon it’s a symptom of too much time reading expert marketing blogs online and not enough time simply thinking about what’s real to them.

    It’s important to first identify viable prospects from within your current clients and start with personalised, targeted communication. This will allow you to work out fairly quickly what prospects you should be targeting, as well as why. Once you have this information, you can start creating a program with further reach and depth.

    You can start off on a small and simple scale and build from there. For example, you might recognize that one of your clients has a large database of businesses that could benefit from the help of an experienced and ethical SEO specialist. Simply asking that client to send members of his database a personal email introducing you and your services is one of the quickest and most powerful forms of referral marketing you can participate in. Your client may just be doing it to support his or her database or you may be incentivizing them with a commission of some sort, but either way, that quick email introduction gives you all the credibility you need to pick up a new client.

    The reason this is so important is that you are taking into consideration the time pressure business people are under and the amount of emails they deal with on a day-to-day basis. It’s breaking through the clutter so that you aren’t just cold calling random people and irritating them – remember what we covered regarding fake news. Your client has a relationship with you, and you are using this relationship to build a relationship between them and a referral.


    With the hard work of identifying potential contacts to give you referrals, asking them to set them up and even coming up with a way to reward those valuable contacts, this is a process worth documenting and repeating, surely? It is! And the best people to repeat this with is with complementary businesses who sell to the same clients as you.

    The real gold mine of referral marketing is identifying these potential strategic alliances that you can begin to nurture and strengthen, month after month of engagement as you both send each other business. Since you sell to similar clients, you can probably relate to the target audience better, agree on their frustrations and maybe even get some feedback on how to improve your services from each other.

    Either way, formalising these strategic relationships and consistently engaging with these people is the key to referral marketing. Our resource has all you need to get going.


    As we’ve already mentioned, a referral marketing program can dovetail quite nicely with your digital marketing efforts, using landing pages, email marketing and social media banners/buttons to supplement your work. A big advantage of this is that all these elements are highly measurable and being a digital marketer, who is better placed to understand all this? Tracking your efforts from the beginning will show you exactly what you’re getting out of what you put in.

    Less than a quarter of businesses have the necessary referral tools in place to accelerate generation and conversion, and with these tools you can measure your efforts to see exactly what is working, and what isn’t – and why. Working with measurement and monitoring tools forces you to be accountable by keeping on track to meeting a set KPI. It also provides you with a foolproof step-by-step process to follow that covers the various scenarios you might encounter, processes to follow when asking for referrals, ideas of when and how to solicit a referral/introduction process and more. In this resource, we’ve covered some of the most basic methods of tracking your referral marketing. Take a look.

    Now you need to work out a way to systemize these referrals as they come into your business and keep track of them using a similar methodology. Again, if you start small it will be easier to get going.

It can be tricky going it alone, as you lack the tools and resources needed to quickly and efficiently execute a referral marketing campaign yourself. It’s more than just handing out business cards and asking people to scribble down names, and then cold calling those names to demand business.

A much better strategy is to think about someone who you want a referral from as a ‘Bragging Buddy’. You know that you’ve got something great for their friends, and they probably think the same thing about their business. So start a conversation. See how you can help each other. Get to know them so you can find out what they really need and want. Ask them questions like: “What type of customers are you looking for?” and “How do you identify a good prospect for you?” or “What specific situations are your prospects prone to experiencing that you can help them with?”. We guarantee you that the conversation will work both ways and soon you’ll become each other’s most valuable marketing tool.  

With all this under your belt, you’ll be able to use the power of positive word of mouth to slowly but surely stretch your business – all the while creating a dream team of loyal, invested customers likely to stick with your business for years to come. As the ancient Chinese proverb says, “If you want 1 year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people.”