Small Business Maximizing Referral Networks

Organizations are increasingly embracing referral marketing to supplement traditional marketing. Berman (2016), defines referral marketing as a promotional strategy that focuses on motivating happy or satisfied customers to refer new customers with great lifetime value. As such, referral network refers to customer-to-customer or business-to-business interconnectedness. A small business can effectively maximize referral networks to launch a brand because it builds greater brand credibility, awareness, and trust. 

The development of strong customer referral programs can help a small business enterprise to build brand credibility and awareness when introducing a new product in the market. A business can tap the power of it customers’ social contact through the creation of customer satisfaction and the provision of incentives. Satisfaction plays an important role in inducing customers to share their buying or consumption experience with friends, family members, and other close social contacts. However, Wirtz, Tang, & Georgi (2019) customer satisfaction determines referral behavior, but incentives should be used to encourage customers to bring more referrals since rewards correlate with the number of referrals created.  Customer referral programs are essential when launching a new brand because it develops credibility and trust among the new customers because a friend, workmate, or relative has referred them.

Additionally, promotional programs that rely mainly on social media referral networks can also be used when launching a brand. Social media campaigns can be used to facilitate a viral marketing model where brand information can be shared through photos, newsletters, games, photos, ads, hyperlinks, press releases, and videos (Ghosh et al. 2020). Loyal customers can now share the brand information with their friends on their Facebook wall, WhatsApp status, Twitter, or even Instagram. The marketing content can be redistributed to as many people as possible through various social media networks. This plays a crucial role in building brand awareness when launching a product.   

Furthermore, a small business can utilize a business-to-business referral competition strategy when launching a new product. Like customers, businesses also give quality referrals to their peer businesses based on geographical location, peers’ proximity, and remarkable strategic congruence. A small business can use establish connections with peer businesses in the same locality to get referrals (Zhu et al. 2020). This happens mainly on digital platforms such as websites where a business can get web traffic or referrals from a website of a peer business. Business-to-business referral networks are as effective as customer-to-customer referrals because it builds brand credibility, awareness, and trust.

In conclusion, a small business enterprise can maximize the power of referral networks through customer-to-customer, social media contact, or business-to-business. A business can decide to provide high-quality goods and services whose consumption experience is sharable. It can also provide rewards to customers who bring new company and makes a product. (Berman, 2016). Peer business can also be a rich source of referrals because especially from digital platforms such as websites. A referral network is necessary when a small business is launching a product because referees who include friends and family members can vouch for the brand. As such, it establishes brand trust, credibility, and awareness.


Berman, B. (2016). Referral marketing: Harnessing the power of your customers. Business

Horizons59(1), 19-28.

Ghosh, S., Gaurav, K., Bhattacharya, S., & Singh, Y. N. (2020). Ensuring the spread of referral

marketing campaigns: a quantitative treatment. Scientific Reports10(1), 1-15.

Wirtz, J., Tang, C., & Georgi, D. (2019). Successful referral behavior in referral reward

programs. Journal of Service Management, 30(1), 48-74.

Zhu, Y., Wang, V. L., Wang, Y. J., & Nastos, J. (2020). Business-to-business referral as digital

coopetition strategy. European Journal of Marketing,54(6),1181-1203.