Referral marketing is nothing new. Businesses have always recognised the power of referrals made by their customers. Something along the lines of "refer a friend and save 20% off your next bill" can be very effective for businesses.
Studies have shown that referred customers are both more profitable and loyal than regular customers.
With the rise of social media, referral marketing is evolving. Various new startups are giving companies an easy way to reward customers who click on that all important share button.
Social referral marketing allows businesses to raise awareness, drive traffic and acquire new customers.
Vouchers go Viral is UK's own social referral platform. It's a site that's populated with vouchers from various retailers. For a customer to use a voucher, they simply click on one of the share buttons.
Like A Coupon is a company in the US that a mix of social referral and group buying. The website features various coupons which need to be tweeted or liked a certain number of times before they're "unlocked" and can be used.
SocialTwist is also based on the same concept of social referral. It's a "customer acquisition platform that creates social referrals for leading brands, retailers and publishers". It's been used by over 40 leading brands to drive social referrals and generate new business.
Curebit is a platform that rewards both the referrer and referee. With the other platforms, the user is rewarded for simply sharing. With Curebit, the user has to get a friend to make a purchase before they're rewarded. The "friend" that makes the purchase also receives a discount.
I understand that I have biased views on the topic, but I truly believe that social referral marketing will be a growing trend in 2012. Rewarding customers for referrals can be beneficial for both the customers and the retailers involved. Not everyone likes the concept and some people believe that it could lead to more spam on social networks. What are your views? Are you willing to click the "like" button if it means you get 20% off your next purchase?