What is Viral Referral Marketing?

Being a strategy that only taps into the selected networks, some might wonder if the channel is enough to attain viral growth. Well, referral marketing is your best shot at going viral.

Abdul Wahab

Abdul Wahab

· 9 min read
What is Viral Referral Marketing?

Paid media is losing ground. Consumers are reluctant to trust flashy billboard signs, catchy headlines in emails, or celebrity endorsements on media channels. When it comes to purchasing from a brand unheard of, people will value recommendations from friends and family above all.

Trust can’t be manufactured anew but it can be traced through people who possess social influence - a specialty of word of mouth. Referral marketing leverages the trust people have in their friends and family, harnessing personal connections to drive new customers on board.

Being a strategy that only taps into the selected networks, some might wonder if the channel is enough to attain viral growth. Well, referral marketing is your best shot at going viral.

By setting impressive rewards and devising a gamified roadmap towards them, you can attract thousands of customers with their wallets wide open. Sounds too good to be true? Brands like PayPal, Robinhood, and Dropbox have experienced phenomenal growth via customer referral programs. So why can’t you?

An Introduction to Viral Referral Marketing

Virality is all about spreading news, brand, or product like wildfire among the masses. It's when people get so excited about a product, idea, or message that they can't help but share it with their friends, family, and even strangers.

Just as a virus multiplies among individuals, viral marketing leverages the power of word-of-mouth, social sharing, and online connectivity to propel a brand message to people online. Companies use viral marketing to make their products or messages go big without spending a ton on advertising.

Referral programs add another layer of excitement on top by offering incentives. Not only are people generally inclined to share experiences, but winning rewards each time someone acts on their referral links carries the hype even further.

How Does a Viral Marketing Campaign Work?

Every digital marketing campaign thrives off online connectivity or social media and referral programs even more so. In fact, the success of a referral program depends on its audience’s online behavior - how frequently they share posts online, give comments, and respond to any news or update regarding your brand.

More often than not, the journey of a referral campaign starts with a product launch. Marketers lay the initial groundwork during pre-launch such as locating the audience, offering incentives that entice them, and linking mainstream communication channels to motivate sharing.

The company’s existing customer base gets the firsthand chance to join the show. In exchange for sharing the brand message, inviting friends to participate in the program, or compelling them to participate, these individuals receive special incentives. Some businesses hold contests and giveaways to boost participation and with it, the conversion rate.

As participants continue sharing their unique referral links, the campaign's impact multiplies rapidly. Each new participant potentially brings in more referrals, leading to a cascading effect, turning your referral campaign viral. One positive interaction with your brand either through your product or the referral rewards, sets the stage for a lasting relationship.

4 Elements of Viral Referral Marketing?

Word-of-mouth marketing has been around for ages, but it wasn’t until the onset of the internet and social media that companies began to leverage it for viral growth. If you’re aiming for a spike in growth through a referral program, make sure it passes all of the following elements:

Aligns Audience’s Interest

Whether it’s the product or incentives you’re trying to deliver, audiences’ interests take significance above all. Every marketer should take into account the needs and preferences of its target audience, before finalizing the campaign structure. Start asking:

  • What challenges do they face?
  • What are their aspirations?
  • What form of content do they consume?

Knowing what drives your audience can help you develop a campaign that addresses those needs and fulfills their desires. If your referral program ties into what's already capturing their attention, it becomes more relevant and shareable. Consumers develop a close-knit relationship with brands they feel value their interests.

Compelling Incentives

Frequent customers, even loyal ones, do not think it a priority to advocate for your brand within their social circles or even share it on social media. Without any incentive to go by, endorsing a product or service remains in hindsight with no foreseeable action.

Incentives that align with your audience’s interest provide a solid reason for them to take action, turning passive customers into active brand ambassadors. Seeing the value they stand to gain from simply participating in the program and referring it to others, you may attract an influx of bystanders joining in.

As each participant strives to earn their reward, the sharing multiplies across layers of connections, reaching a broader audience than traditional marketing strategies alone.

Shareable Content and Tools

A referral program cannot survive on the backs of incentives, especially if you’re aiming for a global outreach. You need to give your audience access to shareable content to reach prospects beyond your immediate audience.

People barely pay attention to ad posts. But if someone they know and trust endorses the business, they’ll be much obliged to act upon it. Motivate your audience to interact with and share your social media posts to build reach.

Each share creates a chain reaction. As recipients of the shared content become interested and share it further, the cycle continues, contributing to viral growth overall.

Social Proof

If there’s one way to build credibility in front of your target audience and motivate them to purchase from you, it’s social proof - relying on the behavior of others to guide one’s own actions. Social proof operates on the assumption that if many others are doing something, it must be the right thing to do.

Showcasing your success with previous campaigns and positive endorsements from existing clients adds to your credibility as a business. When people observe others participating and benefiting, they're more likely to follow suit creating a ripple effect.

This "herd mentality" drives participation from people outside your audience, looking to associate themselves with the community and boost the conversion rate.

5 Strategies to Boost the Virality of Your Referral Program

Not every referral program will drive mass participation. It has nothing to do with the quality of the product you’re marketing or the prize pool you’re offering but rather, a lack of creative tactics.

To ring up your name in front of the masses, you need some clever tactics in your referral marketing manual. We have summed up five compelling strategies to make your brand name viral.

Leverage the Right Platforms

For a campaign to go viral, simple participation isn’t enough. It must be shared by thousands of people on repeat to reach untapped audiences. The more it’s talked about and endorsed online, the bigger the hype that will follow. All you need is to establish your base on platforms your target audience frequents.

If your audience is active on a particular social media platform, forum, or community, that's where you want to focus your efforts to ensure your message reaches its intended audience.

Since social media platforms come with built-in sharing buttons, retweet features, and messaging options, your referrers can reach their networks quickly and easily. The more people you can reach, the greater the chances of your referral program being shared and going viral.

Inspire Emotional Reactions

Humans are naturally curious beings that yearn to belong. Ever had a positive experience with a brand that made you want to share it with the world? It’s exactly what you need to get your audience to rave about your products to the masses.

Share stories of how your program has positively impacted participants' lives. When others empathize with these stories, they're more likely to participate and spread positivity.

If you’re gearing up for a pre-launch campaign, style your brand messaging in a way that piques curiosity leaving participants eager to learn more. A hint of what's to come can drive them to the edge, possibly motivating their friends to join in on the action as well.

Hold Referral Contests

Picture this: Participants competing to outshine each other by referring friends, family, and acquaintances to your program, all in the name of winning rewards in return. Referral contests are an effective way to spark enthusiasm in the audience and leverage such emotions to build up hype for your campaign.

Marketers often set up leaderboards for every campaign, which adds to the thrill. Seeing their peers excelling by referring new leads, people are motivated to step up their game and secure the top spot. Introduce a bonus reward for the winner to keep their enthusiasm high.

Word travels fast, especially when there's a contest involved. Participants are motivated not only to refer but to flaunt their achievements online, which indirectly adds to your reputation and fan following.

Use Strong Visuals

On social media, a picture is worth a thousand shares. In scroll-happy media platforms, strong visuals stop the thumbs and encourage users to pause and explore.

If your referral program is highlighted with attractive design posts, there’s a high chance of making it to your audience’s social media feed. Be that as it may, never underestimate the power of copywriting. Only strong visuals tagged with a compelling headline will inspire your audience to take action.

3 Viral Referral Marketing Examples

Referral programs aren’t a recent phenomenon. Many companies have already gone through the trial-and-error process to create a strategy that worked. Seeing the creative approaches other businesses adopt can inspire you to think outside the box and come up with unique ideas that could set your program apart. We’ve outlined three compelling examples from companies that tapped exponential growth through referral marketing.


While many relate the first successful use of the referral program to Dropbox, the credit actually goes to PayPal. In fact, it’s a story that inspired Dropbox to follow suit.

Despite being the first in the league of fintech companies to try referral marketing, what PayPal did was quite daring at the time. Surprisingly enough, the strategy worked wonders.

The company gathered 1 million new users within the first two years of the program, marking 1,650% growth all through the referral campaign. By 2004, PayPal had up to 100+ million users in its database.

To put it in financial terms, PayPal turned a $60 million marketing investment into a $46 billion enterprise in a matter of years. Though initially started with $20 incentives, the company soon switched to $10 cash rewards in return for participating in the campaign. All users needed to was register their email address and enter credit card details to receive the reward.

PayPal’s referral landing page in 2000.
Image Source


Robinhood may not be the first fintech enterprise to adopt a referral marketing program to propel its growth, but it’s the first one to accomplish it before launch.

In 2013, the stock trading app floated the idea of a commission-free platform for average wage earners. The concept being straightforward clicked for the common folk. To translate the audience’s anticipation into something tangible, the founders at Robinhood initiated a waitlist referral strategy.

No cashback, no discount, but rather a spot up the pre-launch waiting list for referring the platform to others. By referring their friends onboard, people would climb up the ranks on the waiting list - early access once the platform goes live.

Remarkably, Robinhood received 1 million signups in its database months before the platform was set to launch. With no budget expense or reward program, the strategy mainly drove off of people’s desire to get their hands on the product first.

Robinhood’s referral waitlist slide.
Image Source


If your business idea is revolutionary, you cannot imagine what a properly set up referral campaign can offer to augment its growth - Airbnb is a perfect example.

Airbnb aimed to revolutionize the hospitality industry giving regular homeowners chances to rent out their dwellings to folk who couldn’t afford costly hotel rents. Being an industry that relied on basic human trust, Airbnb needed plenty of golden stars on its badge to become viral globally, and referral marketing turned the right catalyst.

Originally starting off with $100 travel credits for referring friends, Airbnb later switched to $25 to keep the budget in check. Referrers would receive a $25 travel credit for recommending the program to a friend while referred-in customers would receive $25 cash off their first stay.

The company introduced the program initially after the launch in 2008, and the success followed soon after. The platform grew from 1,000 users to over 2 million travelers within the course of 2 years. By 2014, referred users amounted to 35% of all users on the platform.

Airbnb’s refer a friend emails.
Image Source

Closing Note

“Viral” is a modern-day buzzword, a bit too hyped in the business world. As desirable as it is to capture viral growth, it hardly lasts. Once the hype fades out, it’s the quality of the product that keeps the customers from jumping off.

While referral programs are your best shot at building buzz during pre-launch and setting the stage for an impeccable launch day, make sure your value proposition is equally impressive.

Virality is best tapped on the launch day, but with everything else to account for overseeing the progress of our referral program can be challenging. Allow Prefinery.com to set up and manage your referral campaigns until you reach your business goals.


How does viral marketing work?

Viral marketing relies on the principle of exponential growth. When individuals share content with their friends, family, or followers, those recipients, in turn, share it with their networks, creating a viral loop of incoming customers. As the sharing process continues, it expands your reach to an untapped audience in a short period.

Is viral marketing the same as word-of-mouth marketing?

While viral marketing often leverages word-of-mouth, they are not the same. Word-of-mouth marketing involves personal recommendations between individuals, whereas viral marketing focuses on creating content that spreads rapidly online, often amplified by social media and digital sharing.

Is virality beneficial for a company?

Going viral can be both positive and negative. Positive viral content boosts brand awareness, engagement, and customer loyalty. However, negative viral content can damage reputation and lead to backlash from the masses. Businesses should ensure their viral campaigns align with their values and goals to minimize potential risks.

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