🗣️ Talking the talk

When it comes to gossip, it's wise to remember that other people's opinions of you are none of your business... unless it's positive gossip, of course. Who can resist being referred to favorably? This week's newsletter is about why referral programs are so successful, what gifts you should give your readers, and whether affiliate marketing is the right approach. Let's go!

In this week's issue 📨

• Why referral programs work
• The best referral rewards
• Affiliate marketing pros and cons

Was this email forwarded to you? Subscribe here!

Heart over mind

Have you ever bought something you didn't need? Have you purchased something because a friend wouldn't stop talking about it? Well, we regret to inform you that you have been influenced. Don't feel bad! You can't escape basic human psychology. This behavior is hardwired into our heads, which is why customer referral programs are such a fruitful ride.

Sandra Petrova, senior content editor at Growsurf, breaks down why starting a referral program is a no-brainer for your blogging business.

What is a referral program?

• Referral programs incentivize existing members to recommend your publication to friends and family. You can offer benefits like discounts and freebies in exchange for positive word-of-mouth that can increase your subscriber count.
• Asking your members to recommend your blog to their social circle without an incentive doesn't generate much motivation, but offering attractive bonuses encourages your followers to discuss why they love your brand and content in daily conversations.

Why do referral programs work?

• When one of your members endorses your publication to someone they love, this tends to have higher success than traditional marketing. Referral programs use the human element of trust and the psychological principle of social proof, which carries a hefty amount of weight.
• New customers referred by existing ones have a higher lifetime value and are more loyal than customers who aren't. This creates a more sustainable growth model that continuously generates new subscribers so that you can focus on your content.

How are referral programs successful?

• Tapping into people's motivations and creating marketing tactics around their desires is the heart of why referral programs work. People tend to follow what their peers are doing, we feel obligated to return favors, and we're more likely to be influenced by people we relate to.
• The key to designing effective marketing campaigns is ethically influencing human behavior. Understanding what drives us on a personal level is the key to a winning referral program. Just be sure your marketing tactics are wrapped in positive intent, and your followers know the real you.

What makes referral programs more effective?

• Gift things to your existing followers before you start asking for referrals. This will increase the likelihood that they'll recommend you to their social circle before you even have to build a referral program. You can hand out birthday gifts and celebrate brand milestones by giving discounts.
• Consider a two-sided referral program that rewards the person giving the referral and the person receiving it. This tactic is extremely powerful because who doesn't want to give a little something extra to a friend or family member? Success is easy when both parties have something to gain.

Interesting stories & ideas 📚

• Publishers are preparing to federate – Digiday
• "For You" feeds are not for you – Creator Science
• How to generate ideas to write about – Creativerly
• Dispatches from the media apocalypse – Werd I/O
• OpenAI loses its voice – Platformer

Just rewards

You now know how referral marketing functions on a human level, but how does it work on a business level? Not all referral programs are created equal, and each one requires unique resources, time, and patience. To choose the best program path for your publication, you should know the three most used referral models and how each can benefit your newsletter.

Let's examine the most common types of referral programs based on the kinds of bonuses you can offer your readers.

‣ Physical rewards, like branded swag, are incredibly effective. The most well-known referral programs in the newsletter space use them, and tools like Viral Loops make it easy to manage. Physical gifts are best for publishers looking to grow a free email list fast and have space for freebies in their marketing budget. If you have minimal resources, you may want to go a different route.

‣ Monetary rewards, such as recurring commissions or one-off payouts, are an excellent fit for blogs using the subscription business model. Consider this type of program if you have an existing audience willing to go the extra mile to promote your work. You can also use tools like FirstPromoter to connect your referrals to your billing platform with ease.

‣ Benefit rewards that give exclusive access to premium content or free downloads are great options for publishers with a limited budget and an active audience. If you don't yet have an established community or products you can already offer as an incentive, focus on building those things first. Once you've laid your foundation, handing out benefits is super simple.

Regardless of your reward route, the best gift you can give your members will always be quality content. Customer happiness is the first step toward referral success, so if you're not creating something worth talking about, your referral program will be for naught.

Positive affiliation

Now that you're more familiar with referral marketing, let's take a gander 🪿 at affiliate marketing. "Aren't they the same thing?" Well, sorta kinda. Referral programs encourage your current subscribers to share your work with their friends in exchange for rewards, while affiliate programs encourage other content creators to share your brand with their followers to gain commission.

Nikitas Filosofof, growth officer at Viral Loops, explains the pros and cons of affiliate marketing to help you decide which lane to take.

Pro: You don't have to hire your own marketing team, which saves you time and money. Your affiliates are paid based on their performance, so their compensation will always be limited to the leads they generate.

Con: Because starting an affiliate program is so easy, competition is high. There's little cost, which makes it highly appealing to many of your competitors. Just be sure to one-up everyone else by offering the best benefits.

Pro: Your business can scale quickly without taking huge risks since you're not investing any money upfront. You only have to pay your affiliates once you start gaining members. Win, win!

Con: Customer lifetime value (CLV) is often lower for businesses that participate in affiliate marketing. Affiliates tend to focus more on customer count rather than custom retention, so loyalty may be low.

"...it’s now time to pull up your socks and get started with the right affiliate or referral marketing strategy, depending on your brand’s requirements and expectations....both approaches offer effective results, allowing brands to use them together to get more revenue and fulfill their marketing goals." – Nikitas Filosofof

Curator's pick ✍️

Enjoy this newsletter? Forward to a friend or hit reply to share your thoughts. We don't bite! 👻

Want more how-tos? Search our library of tutorials and subscribe to our monthly "Build with Ghost" newsletter.

Join our Ghost Creator Community! Connect with like-minded people who create content professionally — apply here.