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What Is Referral Marketing? Types Of Referral Marketing

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Are you familiar with word-of-mouth? You must be because that’s how you have been shopping for many years. a relative or a friend uses any product or service and if find it good they refer it to you and so on.

Since you trust these people, you plan to make a purchase. This word-of-mouth works on trust because that’s what makes people buy a service or product. Word-of-mouth is similar to asking for a review from someone who has purchased from the business.

You must have seen many marketing tactics to promote businesses. People trust companies when they have a social media network presence. If you are one of that popular businesses but have no online page you can ask experts that how to create a Wikipedia page for my business and leave the rest to them.

But there is more to this, referral marketing is of 5 types through which businesses are making the most.

Quick List Of The Types

  • Social Media
  • Reviews
  • Direct Referral
  • Email Referral
  • Incentive-based Referral

5 Types Of Referral Marketing

You may have witnessed or purchased through one of these mediums. People make purchases based on the below-mentioned ways of referring a product.

1. Social Media

The most common these days is social media referring which works through social media networks and platforms. Technology has been great for businesses and has helped companies to grow through the internet.

Hence, the power social media holds is unbeatable, considering the millions of active followers. Almost all the companies have social media accounts. It takes one share to make the business famous on social media platforms.

Moreover, social media referrals work when you download or sign-up on a website. You get a pop-up message, refer to a friend and get a 20% discount, and so on. You get notified when a person you refer makes a sign-up or purchase from the link you have shared.

In a nutshell, Referral marketing works side-by-side with discount marketing in this manner.

2. Reviews

Reviews are another type of referral and work like magic for businesses. This type of referral works when people review a product or item with their friends and family. A person buys an item uses it and then refers to their relatives, friends, co-workers, and other acquaintances.

Furthermore, when we visit someone, seeing them using an item that we were planning to buy but had no idea if the product is legit. That is why we ask the person to review the brand and whether or not we should make a purchase.

As a result, when an individual is satisfied with a review, they make a purchase. Here businesses can make the most of this, ask them to review your brand and its services to get a loyal customer.

3. Direct Referral

Direct referrals work when you refer something directly to a person and they make a purchase. This is what word-of-mouth known for. The power these words hold makes a huge difference in sales.

Moreover, what businesses do is ask their customers to refer your business to people they know. Also, if you are a small business, you can people you know to refer your business to others.

4. Email Referral

Email marketing and email referrals work side by side too, through email marketing businesses send emails to their customers for brand promotion.

Besides, as soon as the new product is launched brands send emails to their past and present customers to remind them. Also, you get discounts and much more through emails.

As a whole, emails are not just for communication but help businesses to become known among people.

5. Incentive-based Referral

This type of referral marketing works when businesses send rewards and coupons to their customers. The more a customer is shopping from a brand the higher the number of rewards will be given to them.

This is a way of making the customers loyal to the brand. Companies are going digital with incentive-based referrals and are rewarding them with discount codes. These are called digital referral incentives that allow companies to not spend money on physical gift cards but use creativity and technology for digital incentives.


Wrapping up the log, these are the 5 kinds of referrals that business use and are earning in numbers. All of these ways are a combination of marketing strategies and have become popular among companies.

Also Read: AI and the Future of Work


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