Happy customers drive growth

Happy customers will drive business growth in 2020. Here's why


With traditional marketing costs spiralling and consumers becoming increasingly cynical of advertising, more businesses will recognise the measurable, long-term benefits of putting customers at the core of their marketing strategies in 2020.

Here are four advantages of transforming your happy customers into ambassadors who trust and recommend your brand to others.

Cost-effective acquisition

As highlighted in Mary Meeker’s introduction to the Bond Internet Trends Report 2019, customer acquisition costs are spiralling to unsustainable levels. And advertising isn’t only costing more; it’s trusted less than ever by consumers. The Advertising Association reported public favourability towards advertising has decreased from around 50% in the early 1990s to 25% in 2018.

All too often, businesses invest significant amounts into new customer acquisition channels, only to see customers make a single purchase then never return - particularly if the customer was incentivised by a generous offer exclusive to first-time shoppers. In some cases, the cost of acquiring new customers outweighs the revenue they deliver.

In an age where consumers demand trust and transparency more than ever before, referral marketing offers a cost-effective solution (particularly when outsourced to technology platform providers like us). Pull marketing is increasingly more effective than push marketing, with 71% of consumers preferring to make informed choices through recommendations, reviews, social media and online search. Furthermore, review sites and friends’ recommendations are trusted three times more by consumers than endorsements from bloggers and YouTubers.

Customers acquired through referral approach brands predisposed to liking and trusting them thanks to their friend’s recommendation. This typically makes them significantly more valuable than customers acquired through other channels.


On average, referral programmes:

  • Drive up to 30% increase in new customer acquisition
  • Double customers’ lifetime value
  • Increase first order value by 10-25%

Referred customers are also three times more likely to recommend your brand to their friends too, continuing the virtuous circle of referral.

Happy customer business growth 2020

Make 2020 the year referral increases your business growth

Measurable ROI

Another clear benefit of referral marketing is its measurability. Tracking return on investment is often a major challenge for marketers. An expensive television advertising campaign, for instance, may well correlate with an uptick in business, but proving its direct cause and effect can remain near impossible. This can be a problem when looking to justify project costs to senior stakeholders and gain approval for campaigns.

In contrast, refer-a-friend technology platforms empower marketers to measure, test and optimise referral campaigns to drive performance. Not only can you see which new customers came as a result of specific customers’ recommendations, but you can explore what exactly attracted them, testing elements like incentives, copy and design, and touchpoints in the customer journey.

A strategic A/B testing roadmap for a referral programme will generate invaluable insight that brands can use to inform future marketing campaigns; such as knowing their customers engage more with short copy and prefer discounts to free gifts.

Tracking offline conversations

Despite the rising prominence of social media and online platforms, people still frequently recommend brands via word of mouth. 40% of successful referrals happen this way; highlighting the importance of businesses tapping into their customers’ offline brand conversations.

This trend is particularly strong in the fashion and beauty sector. These brands are discussed on a daily basis among friends, where referrals are prompted by a compliment or asking where someone’s new shoes are from, yet brands miss these opportunities. Referral marketing incentivises customers to recommend their favourite brands to those around them, so these moments are encouraged and captured.

Long-term success

In a time where keeping up with – never mind ahead of – rapidly changing consumer trends can feel like a losing battle, engaging with happy customers to drive referrals is a reliable solution.

Against an increasingly noisy landscape, these customers help brands cut through the noise and connect with those who match their ideal customer profiles. More and more businesses will realise this and implement referral marketing programmes as a result in 2020.

After all, the world and marketing trends are ever-changing, but one thing will remain the same: we’ll always listen to our friends.

This piece originally featured in The Drum. Check out the full article here.

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