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Glossary Strategy & Growth
Referral marketing

Referral marketing

Definition

A growth strategy that encourages existing customers to recommend a product or service to people they know — leveraging trust to drive acquisition.

How Referral marketing work

Referral marketing is activated through referral programs that give customers a shareable link or code. When a friend signs up using that link, both parties may be rewarded. Unlike affiliate marketing — which uses professional marketers — referral marketing relies on the genuine enthusiasm of existing users and the trust their recommendations carry.

Why it matters for your program

Referred customers arrive with built-in trust and a higher probability of converting. Research consistently shows that people are significantly more likely to try a product recommended by someone they know than one they discovered through advertising. Referral marketing systematises this natural word-of-mouth behaviour with a trackable, incentivised structure.

Category Strategy & Growth
Common in SaaS, e-commerce, fintech, consumer apps
Payout trigger Referred friend converts
Typical rate Fixed reward or discount
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