Why Discounts Beat Cash for Customer Referrals
In the new referral method, a customer doesn’t voluntarily introduce a product or a service but they do it for the sake of getting a reward. However, in the conventional method, customers would introduce the product or the services they have used in a completely spontaneous way without any expectation. According to different studies and research, considering discounts for using services and products in exchange for referring new customers is 25% more effective than paying cash.
This is because your customers’ job isn’t broking and they all have their own career. Therefore, you shouldn’t give them the impression that they are your marketers by offering to give them cash when they offer more clients. They are your customers and they just gain extra profit by simply referring their friends and acquaintances to you. Many customers consider it insulting and beneath their dignity to receive cash, so they are never willing to do it.