NaXum Explains the Importance of Referral Marketing

4 min readJun 24, 2021

Referral marketing has become one of the most important strategies used by today’s popular brands. Referral marketing creates a path for your most engaged fans to participate in your brand at a higher level. It gives you a unique and personal way to share your story with prospective customers.

NaXum, a Las Vegas, NV company, explains why referral marketing strategies are important for today’s up-and-coming brands.

What is Referral Marketing?

Referral marketing refers to the advantageous situation where an existing customer provides word-of-mouth referrals to your business. This situation represents a win for all sides, from both customers to the business itself. You get marketing from your biggest fans, your original customer gets the satisfaction of knowing they have recommended a great product, and any referral rewards you offer. The new customer receives the benefit of a recommendation from a trusted source.

While this marketing technique may seem self-explanatory, it is trickier to pull off than you might expect. Most customers, even if they are well-intentioned, will forget to tell their friends about your company. This could represent a loss in potential revenue unless you deploy the proper incentives.

Referral marketers’ job is to step in and influence the process, inducing more customers to tell their friends about your brand.

Why Referral Marketing is Powerful

The social nature of human beings means that we are primed to share our experiences with others. Good or bad, when we have opinions, we like to share them. Superlative experiences like the best meal they have ever had or the best product they have ever bought tend to go into a high-priority category when recommending them to their friends.

According to Nielsen, 92 percent of consumers trust information from people they know more than information provided directly by brands themselves.

Marketers may be surprised to learn that referrals influence 50 percent of all purchases. Customers referred to companies are much more loyal and bring a higher profit margin along with them.

While referral marketing may be more challenging than it seems on the surface, the fact remains that it is an essentially free technique. Companies like NaXum can help your brand take advantage of this uniquely human quality.

Techniques for Referral Marketing

There are many tested and proven techniques that help referral marketing work. One of the best is offering discounts and free items to customers who provide their friends’ contact information. Friends may not always appreciate becoming the targets of this kind of marketing, but they may be happy if they receive a good coupon or free item for themselves.

Another form of referral marketing that works well is viral content. If a commercial or promotional video is funny and entertaining in its own right, many existing customers and others will share it with their friends. Through this type of sharing, the network of people who have been exposed to your brand’s marketing message will grow exponentially.

“Micro-influencers” are another way brands can get their message out without spending a lot of money. Giving free products away to users who have many Facebook or Instagram friends induces these people to post about it and gain more exposure for your brand.

Influencer marketing can also be useful, but it relies on the artificial connection with an influencer that the customer does not personally know. It may work well for younger people who feel that they know and trust the influencers they follow online.

Tips on How to Make Referral Marketing Work for You

Referral marketing allows your company to leverage the rapport and trust that your referral agents already have with the people in their lives. This is why it is so effective. Here are four tips from NaXum for companies that want to leap into the world of referral marketing.

1. Create a simple brand message that is easy to understand and repeat.

You don’t want to spend too much time creating an intricate story. Keep your brand message to the point. Make it engaging so that the customer will want to share it with their friends and family.

2. Treat your customers like your best sales staff.

Customers should be rewarded for helping you with referral marketing. While the personal satisfaction of helping a friend or family member find a great new product can’t be overlooked, discounts and cashback are a valuable currency that will quickly pay for themselves in more referrals.

3. Build a brand community.

You will want to create an ecosystem around your brand that reflects your values. Make this a welcoming community and provide your customers with reasons to come back and share your marketing message with their peers.

4. Make referrals simple.

Make sure that there are few steps necessary for a customer to share your brand with their friends. If the process is too involved, they will probably skip over making referrals. The contact information for potential new customers should be treated like gold, making sure that there are low barriers to obtaining it.

Making Referrals Work For You

When you use all of these tips and techniques, setting up a referral marketing program will be easier than you might expect. Remember that your customers are the backbone of your business and treat them well. If you continue to provide excellent products and service with a positive brand experience and incentivize customers to share your information, your brand will prosper.




NaXum is a platform created as a one-stop shop platform which provides all custom built in marketing tools required to achieve success.