The best referral marketing relies on a mix of persuasive ingredients to convince and compel us to act. In this section, we’ll cover some key psychological principles that you can use to do just that – including persuasion, positive reinforcement and compelling calls to action.
We’ve drawn inspiration from the OG of influence, Robert Cialdini. Cialdini’s book, Influence: The Psychology of Persuasion, may have been published back in 1984, but it remains a must-read for any marketer looking to better understand their customers’ motivations.
Always clearly communicate the mutual benefits of your referral reward. If a person knows the friend who referred them will also benefit, it makes them more likely to buy.
That’s something this Ted Baker referral offer taps into, highlighting the win-win of a successful referral.
Ted Baker promotes the benefits for both referrers and their friends
In 1974, sociologist Phillip Kunz sent out Christmas cards to 600 complete strangers. Despite not knowing a single recipient, Kunz received over 200 (largely enthusiastic) Christmas cards in return.
So what gives? Why did so many people respond to a total stranger? In short, it’s down to the rule of reciprocation. We’re conditioned to follow the rule of “give and take”.
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We are obligated to give back to others, the form of behaviour that they have first given to us. Essentially thou shall not take without giving in return."
Key takeaway for your refer-a-friend programme
Don’t be afraid to ask for repeat referrals. When a customer commits to referring your brand, the rule of consistency and commitment means they’re more likely to refer again.
Why? Because doing so reinforces their belief that the initial referral was a wise decision. Better yet, referred customers are 5x more likely to refer onwards, creating a powerful cycle of growth.
In this example, jewellery brand Monica Vinader offers bigger rewards for customers the more friends they refer.
People want to be seen as consistent. It stems from a desire to align our external behaviours with our inner beliefs and values.
So, when we make a promise, we feel obliged to follow it through. When we make a decision, we like to feel like that was the right one. And when we commit to something, we like to justify it.
This rationalisation is why when someone does someone else a favour, they tend to view the recipient of their good deed more favourably after the fact.
Referred customers are 5x more likely to refer onwards
Monica Vinader offers tiered referral rewards
To demonstrate just how strong this urge is, Cialdini references an experiment where one or more people in a public setting suddenly fix their gaze up into the sky.
Steadily, a growing number of bystanders would join them, looking up to see what the others were staring at, until the point where crowds would form… all looking at nothing in particular. Social proof in action.
Did you know...?
We integrate with both Trustpilot and Feefo so you can drive more referrals and positive verified reviews for your brand
Look at ways you can instil social proof in your campaigns to nurture customer advocacy. You could use customer quotes, feature your overall review score (see Honest Brew’s example on the right), or display the number of satisfied customers who’ve taken up your offer so far.
Honest Brew's referral offer includes its Trustpilot score
Party-goers proved far more likely to buy Tupperware because it was being praised by people they knew and liked.
These shindigs teach a simple lesson – we’re prone to buy a particular product just because we like the person selling it.
Learn how pet insurer Bought By Many quadrupled referral sales within 12 months.
Key takeaway for your refer-a-friend programmes
Remind your potential new customers of the relationship between your brand and their friend. Prominently feature the referring friend’s name to instantly associate their potential purchase with positive feelings toward that person. These feelings are more powerful than the emotions even the most brilliant brand can inspire alone.
A customer at Bought By Many gets their reward after entering their friend's name
The seal of authority from your referrers is a powerful tool. Using testimonials, quotes and case studies are all proven strategies to boost your conversion rate.
Try including any positive feedback you’ve collected from the referring friend in the referral offer page (E.g. 'John gave this product 5 stars').
Cialdini writes that we all have some inherent sense of duty to authority. As a result, people tend to obey authority figures.
Building an authoritative identity relies on demonstrating your professional credentials and expertise. But authority can also be earned through recommendations from other trusted parties or people.
Sites like booking.com use scarcity to tell customers how many people have viewed a hotel, how many have booked, and, vitally, how few rooms are left. Tactics like this heighten anxiety we could miss out and generate a sense of urgency to spur us on to take action.
A recent Experian report found that compared to the average marketing email, those driving a sense of urgency resulted in 2x higher transaction rates.
In referral, scarcity can be used in several ways. From restricting how long a new customer has to claim their referral reward, to limiting how long a referrer can share that offer.
You can also use scarcity during promotion periods when you increase or change the referral offer for a limited period (a week or a weekend, perhaps) to drive activity.
On Black Friday, for example, luxury beauty brand Charlotte Tilbury ran a time-limited promotion giving referring customers and their friends the chance to win £200 worth of products.
Charlotte Tilbury runs a time-limited referral promotion for Black Friday
Read on to learn how you can apply Nudge Theory to convert more customers into referrers.
