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Social media marketing and referral marketing – a power couple?

referral programs EarlyParrot

Marketers are constantly seeking new and unique promotional ways to boost the performance of the businesses they work for. Usually, the key is to attract as many people as possible in order to acquire new customers. There are numerous marketing methods, but not all of them are effective. 

In this article, we will share with you our perfect recipe for gaining new customers quickly. The perfect duo which will give a new meaning to your marketing strategy is here. All you need is a strong social media presence and a good referral program. You will be surprised how well these two go hand-in-hand together and can change your business forever.

Let’s jump in!

What is social media marketing?

We hear the term ‘social media marketing’ a lot, right? But what exactly is it? It might seem pretty obvious, but it is actually a lot more complex than it may seem. In short, social media marketing refers to the use of social media platforms and websites to promote products and/or services as well as brands, movements, events, people, and much more. 

Nowadays, social media marketing plays an important role in digital advertising as it involves encouraging various audiences to engage with brands and perform specific actions. Companies that want to promote their businesses will usually advertise their activities on platforms such as Facebook, Instagram, Twitter, and now also TikTok, just to name a few examples. 

The importance of social media

Let’s look at some of the key statistics regarding social media for this year:

  • Facebook is the most commonly used social media platform worldwide.

Most popular social networks worldwide as of January 2021, ranked by number of active users (source).

  • On average, people spend 2 hours, 25 minutes on social media every day



Social media marketing is a powerful tool, there is no doubt about that. Now that you are familiar with how much various platforms can do, let’s focus on the key pros and cons of social media marketing.

Good or bad ?

Like with everything, there are good and bad sides of social media. It is important, however, that you try to keep a balance between the advantages and disadvantages. Do not only think about the pros and forget the cons, but also make sure you do not focus solely on that latter and end up not even giving social media marketing a try. Find your golden mean and use social media to its full potential.


  • low cost and high effectiveness 

You can post content on social media platforms pretty much for free. If your content is interesting and people engage with it repeatedly, it will get many impressions that could lead to a high conversion rate and new leads. 

  • huge audience potential 

With so many social media users worldwide, there undoubtedly will always be people who will want to follow you and view your content. You never know who will become your new customer, so why not give it a try?

  • more than a marketing medium

Social media platforms are not just about generating profit. They allow companies to explore their target audience, reach new people, monitor competitors, stay visible, and much more.

  • allows you to initiate discussions and engage with brands 

When you run social media profiles as a business, you give your customers the chance to reach and engage with you away from your website. This contributes to building greater brand awareness and customer loyalty.

  • gives access to plenty of data to analyze

There are plenty of analytics and reporting tools out there that will help you measure the effectiveness of your social media campaigns. You may want to track so-called Key Performance Indicators (KPIs) such as likes, impressions, views, link clicks, website visits, shares, and comments. All of these will enable you to carefully evaluate your performance to see if social media is for you.

  • allows you to be more visible online (SEO)

The more content you create, the higher your company will appear in search results. Make sure your content is loaded with the right keywords and essential hashtags. Make it as simple as possible for people to find and reach out to you.

  • contributes to building loyalty and makes referrals easy

When brands are active on social media and publish content regularly, their brand image automatically improves and they are more likely to be found trustworthy by customers. Moreover, when people can reach you in more than one place, referral marketing and building a customer base gets much easier.


  • time-consuming

To create engaging content that will attract potential customers, you need a lot of time. Whether you are trying to build your audience using paid methods or aim at growing your profiles with organic reach, you need time to find the best strategy for your profiles as well as to produce content. Sadly, not every company has the resources for that. 

  • requires commitment and dedication

Just like with time, to make your social media profiles effective you need to really commit to the goal and dedicate yourself. It is all about constantly thinking about how to improve, being creative, and staying focused.  

  • it is a fast moving environment, so trends change quickly

Trends do change very quickly and it’s important for companies to at least try and stay up to date. It is not easy when new features like filters, sounds, hashtags, and other forms of content are popping up out of nowhere all the time, but with the right approach it is doable. 

  • it can not be controlled

People say that once something is uploaded on the Internet, it stays there forever – and that is true. Some companies lack the skills to think before publishing something and then have to deal with a huge wave of hate and often not a small amount of criticism. It is important to think twice before publishing something risky as there is no going back for companies.

  • high engagement does not mean contributions towards ROI

Just because your social media profiles get many likes, shares, and comments, does not mean those people have any intention of becoming your customers. Therefore, all your efforts could be wasted for some meaningless impressions.

  • security and privacy policies may be an issue

Like with everything that is online, social media carries the possibility of data breaches. The more information that is placed on the Internet, the higher the possibility of being the victim of hackers, invasive companies, or malicious interlopers looking to mine your data in ways that break privacy policies.

Let’s take a step back from social media and look at referral marketing for a moment.

What is referral marking?

Referral marketing is all about you and your existing customers. It is a marketing strategy designed to encourage them to become ambassadors of your company and refer it to their networks. Most of the time, there are incentives included in such strategies to drive interest in participation of promotional methods like this.

Referral marketing focuses on word-of-mouth activities and is a way for companies to grow their businesses at very low costs. In case you’re wondering why you should dive into the referral topic, here are some reasons!

Again – good or bad?


  • low cost per lead 

It is up to you what to offer your customers in exchange for them referring you to their friends and family. The good news is that you do not have to pay anything to be referred. You could offer something like free samples or discount codes, which many companies do, but it is not absolutely necessary.

  • high conversion rates

92% of consumers trust referrals more than traditional advertising, so this gives you a great opportunity to attract new customers without the need to spend money on other ineffective marketing methods.

  • more profit

Research shows that referred customers tend to spend 16% more money. Now, surely that’s an interesting thing to know? Because it says that the more referred customers you acquire, the more money your company will make. 

  • keeps your current customers happy 

With product samples and discount codes, your customers will love you for allowing them to get something for (almost) free in exchange for doing as little as spreading the word about your company. This will contribute to building brand loyalty and deepening your relationships with customers.

  • increased marketing reach at a low lost 

By using your clients as advocates for your business, referral marketing helps you increase your reach.  

While there are certain situations when traditional advertising is off-limits, there are virtually no limitations on your customers telling others about your company. Expanding your customer base through referrals is also possible since most people have a diverse circle of friends.

  • automation possibilities 

Once you have set up a good referral marketing program, you are pretty much ready to sit back and enjoy the benefits of it in the form of new customers. Referral marketing does not require constant attention and can pretty much take care of itself.


  • little control over what type of customers you will attract 

Some people will do anything for freebies and discount codes. With referral marketing, you never know who will join your company and how authentic they will be. It may turn out that your “new” customers are actually existing ones using different email addresses and/or fake names. It is, unfortunately, difficult to spot and monitor behaviour like this.

  • not a lot of price flexibility 

When customers recommend your services and/or products, they keep in mind the specific pricing range that you offer and talk about it with new potential customers. For this reason, it may be difficult for your company to increase prices often as your news customers will most likely want to see the same offers as their family and friends did. If you do not keep your prices the same, it could lead to customer dissatisfaction. 

  • high competition

In order to successfully launch a referral marketing platform, you should analyze the market and make sure you know where the demand is. Otherwise, you may end up launching a referral program that will not bring any success. 

  • you are exposed to criticism 

As your referral marketing platform has the potential to reach a large audience, you’ll  need to be able to handle negative opinions. There will always be people who disagree with you and even take their criticism too far on the internet, regardless of your intentions. You’ll need a thick skin in this industry in order to survive.

  • good software is difficult to find 

Finding a referral marketing platform that will meet your demands and needs can be a lot of hard work. You will need to dedicate your time to searching for the best solution out there.

Like two halves of an apple – social media & referrals

Social media marketing and referral marketing are like a match made in heaven. They have much more in common than you might think. Look at the pros of both of them and connect the dots together: 

  1. With the huge audience potential offered by social media, your referral program has a high chance of reaching a lot of people and bringing new customers to your company.
  1. Both social media marketing and referral programs are low cost and highly effective, giving you a competitive advantage thanks to the possibility to save money on advertising and promoting your business.
  1. Both social media and referral programs contribute to increasing your online visibility and make your company grow faster.
  1. Being active on social media increases your credibility and gives potential customers the courage to try your company for the first time and perhaps become loyal clients. 
  1. Because you are active and engage with your customers on social media in fun ways, as well as offer attractive incentives, your customers will be more than happy to stay with you for longer, which means more profit for you. 
  1. Neither social media or referrals require a lot of time or effort once they are up and running as they are marketing strategies that can be automated. This is an important point because it allows you to save a lot of time and focus on other aspects of your business.

Find out yourself

What do you think, then? At EarlyParrot, we believe that social media and referral marketing are best friends and, when used appropriately, can boost a company’s performance significantly.

If you want to dive into the referral marketing topic, check out our blog. You will find many interesting pieces there on how to start out with and fulfill the whole potential of referrals.

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