Referral marketing rewards satisfied customers for recommending your brand to others. It's the organized version of word-of-mouth marketing with built-in incentives.
Uber gives discounts to both the referrer and the new user. Dropbox grew users by 3,900% through their referral program offering extra storage space. Tesla offered free Supercharging for successful referrals.
Referral marketing works because people trust recommendations from friends more than advertising. It acquires high-quality customers at lower costs, with referred customers having 16% higher lifetime value than non-referred ones.