The biggest challenge any business faces is how to acquire your best-fit customers and retain them.

Luckily, we are spoilt for choice on channels we can use to reach our prospective customers because of internet penetration and social media adoption. Figuring out which channels are the most effective to engage and convert new customers is by far the most challenging part of scaling any business.

At Hyve, we believe word of mouth is the most cost-effective customer acquisition strategy that sustains organic bottom-line growth and can withstand changes in trends and the business environment.

In this article, we’ll focus on how you can empower your best customers to spread word of mouth and refer your business to their family and friends.

Customer referral campaign goals & objectives

Setting the right referral campaign goals & objective is the foundation of a solid customer acquisition strategy. It’s essential to set goals that account for growing revenue through new customers and replacing customers who leave.

The first step is to ensure you align your goals to the customer journey. It’s essential to consider the customer experience to create a seamless and natural referral experience.

Depending on the stage of your business, your aim could be increasing sign-ups to free trials, drive sales revenue, boost app downloads, demo’s booked e.t.c.

Having clear objectives and aligning your referral campaign to your customer journey will help you identify more potential customers, qualify better leads for your sales teams, and improve the overall customer experience.

Segment your customers

Understanding your customer behaviours and what motivates them is key to the success of your referral campaign. Your customers need to have a compelling reason to refer your business to their friends.

Segmenting your customers based on the value and benefits they are already experiencing will help fine-tune your program for more quality interactions and better-qualified leads.

Businesses that execute this correctly experience a 20% – 30% increase in customer acquisition, and the referred customers typically spend up to 25% more than the average customers.

Target & promote your campaign

Communicating the value to your referral customers is a key to motivating your customers to take action. Identifying the right time, the right message, and the right channel to ask for a referral will determine the success or failure of your referral program.

It’s important to remember that your customers are putting their reputation on the line to advocate for your business, so it’s imperative to create a mutually beneficial relationship that’s a win-win-win for your customers, friends, and business to have any meaningful results.

Once you have the right message, it’s time to leverage the proper channels and customer touchpoints to ask for referrals. Identify your customers greatest moments of delight in your engagement to promote your referral programme strategically.

Examples of where to promote your programme can be at the end of a successful buying experience, end of a positive interaction with a team member, monthly email newsletter, website landing pages e.t.c.

Choose the right incentives.

The reasons why customers refer varies and relies heavily on the psychology of the customer. Understanding what motivates your customers will enable you to incentivise them in the right way that matches the time and effort they’ve taken to advocate for your business.

It’s also important to note that incentives can be emotionally or financially beneficial. The best referral programmes are the ones that instil the customer with a sense of social capital amongst their friends. By spreading word of mouth about your product makes them look good and will be well received by their friends.

Examples of incentives can be Charity Donations, brand product discounts, brand merchandise, access and power to decision making e.t.c.

Track & measure campaign performance

To optimise and improve your programme, you need to track the right metrics to measure the return on investment alongside your business objectives. To monitor the performance of your programme, you need to measure the following.

Participation rate

Track the number of customers reached with the programme. This includes customers who have heard about your programme through your social channels. Participation rate allows you to establish and monitor how well-targeted is your promotional strategy.

Clicks & Impressions

Providing your customers with unique links will enable you to track the click rate per customer. Employing hashtags can also help you track social impressions generated by your customers.

Share Rate

Tracks the number of customers who have sent referrals and the number of times they’ve shared with their network. The rate will also give you insight into channel performance on programme promotion and conversion.

Conversion Rate

Tracks the number of friends who have completed a referral ask, i.e. trial sign-ups, demos booked, bought a product. This is the ultimate success metric that will prove your referral program ROI.

Remember to ask for feedback from customers who have completed referrals and those who have not to get actionable insight to improve the effectiveness of your programme.  

If you can’t measure it, you can’t improve it.


Customers are your hidden competitive advantage as they willingly recommend and promote your business to other potential customers. Word of mouth inevitably reduces the average customer acquisition cost and increases the customer lifetime value of your customers.

Amon Kiplagat

Author Amon Kiplagat

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