Inspirational Incentives: How alternatives to discounting can boost your referral strategy

Read time: 7 mins

Delivering on key performance indicators such as AOV, CVR, and CLV, means you have to strike a delicate balance between driving sales and protecting your brand's exclusive image. Discount strategies can be effective, but they may generate friction with Brand teams who are protective of your appeal and wary of alienating affluent clientele. 

An intelligently incentivised referral program can be a helpful solution. Alternative incentives to discounting encourage customers to refer through the scheme — consenting to sharing their data with you in the process — without turning your program into a price-cutting bonanza that harms your bottom line and attracts lower quality customers. 

When people refer friends, it’s because they’re inspired by a great experience and can’t wait to share it with friends. Despite this, it’s rare that customers act without a small inducement. This is often in the form of offering a discount on purchases if they make a successful referral.

There are several alternatives to discounting that you might find resonate more with customers (or a certain subset of customers) more deeply than straightforward discounting. 

You can use these alternatives instead of traditional discounting messaging, or, as is more common, use them to complement your discounting strategy, providing a more nuanced referral marketing campaign and more satisfying customer experience.  

For example, a high-end luxury brand might want to emphasise their exclusivity by pitching their referral incentives as gifts and charity contributions rather than free giveaways. 

Or, if you want to create extra buzz around your incentives, you could add a competitive element by adding the chance to win a special prize.

A diverse range of incentives can help you offer more personalised CX and differentiate between customer groups. Make your most valuable customers feel extra-special by offering your high-referring VIPs exclusive offers and access. Often, customers appreciate it when you find more creative ways to say thank you, incentivising them to keep on referring and advocating on your behalf.  

Using Incentives Instead of Discounting

So what kind of  incentives should you offer your customers? To answer this question, you need to have a good understanding of their habits and feelings towards your brand. 

You probably already have a fair idea about their likes and preferences, but you might not have all the answers just yet. 

That’s ok, you don’t have to get it perfect the first time, you can A/B test a handful of different incentives with a select audience to gain insights into what truly resonates with your customers. 

Whatever incentives you end up offering, you should look for ways to integrate them into your broader marketing campaigns. Consider: 

• Seasonality: Can you plot campaigns around specific events or holidays? Christmas, Black Friday and summer holidays are just a few of the dates you can build targeted campaigns around. 
• Personalisation: Offer birthday incentives or tailor offers based on preferred products, to make your customers feel valued and understood.
• New customer vs existing customer: A discount could well be the best way to appeal to new customers, but for customers who’ve already bought with you, the prospect of money off their next purchase, especially if you sell big or medium ticket items, might not be so appealing.

Gifting as a Referral Incentive

We all feel a bit special when someone gives us a gift. Giving your customers a well-timed complimentary treat can create a moment of delight that they will remember for a long time. Gifting helps build brand affinity and increases the likelihood that customers will become great advocates, driving real revenue to your brand by way of spending and referrals for years to come. 

Types of Gifts

• Free Gifts: Offering a product or service as a free gift can be a significant motivator. It's a tangible way to let your customers know how much you appreciate their referrals, which can be more appealing than a simple discount.
• Cash or Credit on Account: Providing a cash reward or account credit for successful referrals is also an effective way to use gifting as an incentive. It gives customers the flexibility to choose how they want to use their reward, increasing its value for them.
  
  

Gifting Examples and Tactics

Credit: Aspinal of London

Aspinal of London, a luxury brand that oozes exclusivity and refinement, frame their gifting incentives discreetly with phrases like "treat your friend" "Experience," or "Just for You" transforming a simple offer into a luxury experience.

Charity contributions and ethical incentives

Identifying with the same causes your customers believe in and offering ethical incentives is a good way to build trust and inspire referrals.  You can make charity donations in their name or do good deeds when they make a referral. 

Alternatively, you can point to the environmental impact that choosing your product and referring others has. 

Examples and Tactics:

Credit: Pangaia

Pangaia: In keeping with their ethical brand image, Pangaia ran a campaign giving customers the chance to “plant, protect and restore a tree” for every customer they refer. 

Credit: Bloom & Wild

Bloom & Wild: When people buy flowers, they’re often in a caring mood. In keeping with this, Bloom & Wild donate £10 to the Carers Trust when customers refer their friends. 

Competitions

Competitions are a great way to add an exciting dimension to your referral program. When you use them correctly, they can be a strong source of motivation and spur customers on to  make referrals. 

During quieter trading periods, contests are a fun way to boost your numbers and get more people involved. They're a great way to make your referral program stand out, especially when you're running special deals for events like Black Friday, Valentine's Day, Mother's Day, or International Friendship Day.

If you want to run a competition as a referral incentive: 

• Decide how to pick the winners – it could be based on the number of shares, successful referrals, or just a random draw. And it's up to you whether just the referrers, the referees, or both can win.
• Highlight what people can win.
• Make sure your call to action is bold and clear.
• Get the word out about your contest - this is a good opportunity to integrate the incentive into your wider marketing campaigns, use email, social media and referral prompts to promote your competition.

Examples and Tactics:

Credit: Benefit Cosmetics

• Benefit Cosmetics: The beauty brand incentivised multiple referrals by offering a hamper worth £150 when customers referred 2 or more friends. They injected added excitement by saying ‘win’ instead of ‘get’ or ‘receive’.

Credit: Laithwaites Wines

• Laithwaites Wine: To drum up excitement around Black Friday, Laithwaites added to their existing discount incentive with the chance to win a bottle of prosecco as well. 

Inspire your Customers with Advocacy Marketing

Embracing a variety of incentives can significantly enhance the customer experience, making your brand stand out. Imaginative incentives, like  exclusive offers for high-referring VIPs or ethical contributions that resonate with your audience's values, demonstrate your brand's commitment to personalised customer experience and strengthen brand loyalty and advocacy.

Integrating these incentives into your broader marketing strategy, whether through seasonal campaigns, personalised offers, or exciting competitions, can amplify their impact, driving more meaningful and sustained engagement.

If you're looking to elevate your referral marketing program and foster a more engaged, loyal customer base, explore the possibilities with Mention Me's Customer Advocacy Intelligence Platform. Discover how our tailored solutions can transform your customers' enthusiasm into powerful advocacy, driving growth and success for your brand. Request a Demo