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The effect of Referral Marketing in

Here we share with you the ingredients in the powerful Referral strategy that stays behind the successful story of the specialty retailer “”. According to this survey 84 percent of global respondents across 58 countries reported at as the most trustworthy source.

First – What is a referral program?
Instead of traditional advertising, referral marketing spreads the word about a product or service through a business’s existing clients. It is an astonishingly simple idea – empower the customers to create referrals.

According to the New York Times , 65% of all new business comes from referrals. That means on average, two-thirds of consumers make purchases because a particular product or service was recommended by someone they knew.

Referral and word-of-mouth marketing tend to be much more targeted because people know their friends and social audiences pretty well. The result is not just more, but better customers allowing good quality communication to spread more effectively than with the typical marketing channels. Furthermore the strategy of referrals can affect the trust factor – it is possible to build an audience of raving fans, the type of public who wants to know more and trusts the brand as a valuable content provider.

Trust goes a long way when it comes to convincing someone to buy something. With referral marketing, recommendations come from someone that you either know well, like friends and family, or from a third party you trust – e.g. favorite blogger. A resent Nelison Trust Study showed that people almost always trust other people’s opinions (not surprisingly) over generic advertisement or sales pitches carefully crafted by the brand themselves.

Nelison Trust Study

Nelison Trust Study

From the above plot it can be seen that the most credible advertising comes straight from the people we know and trust. More than eight-in-10 global respondents (83%) say they completely or somewhat trust the recommendations of friends and family. But trust isn’t confined only to those in our inner circle – 66% say they trust consumer opinions posted online which is the third-most-trusted format. Owned (brand-managed) online channels are also among the most trusted advertising formats. In fact, branded websites are the second-most trusted format, with 70% of global respondents saying they completely or somewhat trust these sites. In addition, more than half of respondents (56%) trust emails they signed up for. The major types of referral channels are Friends and Family, News Publications, Customer Reviews and Opinions Posted Online, Influencer Opinions (Bloggers, Social Media Influencers), Testimonials.

The successful model of
Of all the different places to glean the right gear and knowledge for an outdoor trip, has emerged as one of the most immersive and educational supplier in e-commerce. From their modest beginnings in 1996 with just $2,000, selling avalanche beacons (radios used for finding people buried under snow) straight from the founder’s garage, to $81 million in revenue, Backcountry has succeeded because of an uncommon commitment to customer experience. As you’ll see, their clients are part of the entire adventure life style without ever leaving the Backcountry site.

There are two fundamental markers Backcountry concentrates on to drive their incredible customer experience:

Last year, Backcountry began featuring the “Gearheads” option on their website. These are experts working to provide a real human interaction in the process of finding the most proper product. The customers can make a choice based on their type of activity – the Gearheads aren’t just customer service associates in a call center, but authentic athletes of real-world expertise instead. Whether you’ve bought a product from Backcountry or not, they’re there to help. In connection with the already established comprehensive personalized program of work with clients they effectively used Gearheads to win the trust of the customers and implement their Referral Marketing strategy.

Give your friends a $10 company
Each Backcountry client – has the option to invite people and recommend a product for which Backcountry makes a $10 discount. By offering such refer-a-friend participation bonuses their visitors are encouraged to actively participate and invite more (trusted) peers by creating an advantage for them. Such a referral program has the potential of concentrating many users to suddenly share related content. This creates momentum in social channels that can drive awareness and create a virtuous circle of interactions. Facebook’s EdgeRank algorithm, for example, uses interactions of status posts to determine what to show in a user’s feed. If more people interact with a post, it is more likely to be shown higher in the feed. Not surprisingly, the customers who are connected to refer a friend program are happier and more loyal. People love to get something for their ability to influence! However, their friends and other relationships will not participate solely because someone they like asked them – these second-degree connections need something more compelling than social pressure to engage with the brand.

Backcountry makes sure you’re making it as easy as possible to share your products and refer your brand. There are many ways you can do this. They have implemented this on their site by adding it central to their main navigation – no doubt that referring friends is important call-to-action for Backcountry.


After you click it, they also make it easy by pre-generating the Twitter and Facebook message so you don’t have to think of one.


Sometimes people need a nudge. Providing rewards for referrals can be just the thing to get your visitors and customers sharing your brand with their friends and family. In the case of Backcountry Refer a friend proved to be a very effective model for recruiting loyal customers. The good news is, their Referral model is universal enough to be implemented in a variety of online retail businesses.

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