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Top 3 Ways to Make SMS Work for Referral Campaigns

 BONUS MATERIAL: The Psychology of SMS Marketing

With the abundance of marketing strategies today, you may wonder…

Is referral marketing still relevant?

Indeed, businesses seem to invest more in social media campaigns, influencer marketing, and content creation. These marketing strategies may make referral marketing seem a bit old, especially if it is an SMS referral marketing campaign.

Learn more about SMS marketing in our expert's guide!

Today, most referral marketing campaigns involve using emails or chatbots. So, is SMS as a medium for a referral marketing campaign still relevant today?

The Power of SMS in Marketing

Contrary to what you might think, SMS is a popular tool for businesses to engage and retain their customers.

According to the statistics by Tech Jury:

  • About 50 million people confirmed they would like to receive SMS messages from businesses.

  • The high interest of the wide public in receiving SMS inspires businesses to use this tool for marketing. Marketers share that SMS messages have a 209% higher response rate than email or social media messaging, and a 98% open rate.

  • Consumers trust SMS messages more than emails. This may be because according to Tech Jury, only 10% of SMS messages are spam (compared to 50% of emails).

What about using SMS messages for referral marketing campaigns?

Tech Jury mentions that consumers tend to redeem SMS-delivered coupons 10 times more often than coupons delivered by email or other means of communication. Referral links and messages also fall under this category, making SMS a great tool for referral marketing campaigns.

The key, however, lies in the contents of the message. The way the message is composed will impact the open rate and click-through rate (if the SMS contains a link).

So, let’s look at the best ways to do SMS referral marketing campaigns that work.

Option #1: Using the Non-Promotional Promotion

Some people may be wary of referral campaign SMS messages because of promotions. This mostly concerns the messages that are more advertisements than notifications.

For many people, ads in SMS messages are too intrusive. And intrusiveness is what consumers hate most about promotional notifications. Reportedly, 91% of consumers don’t like ads because of it and say that this approach is inappropriate.

So, if you want to target some of your consumers with a referral campaign through an SMS message, we recommend starting with a non-promotional promotion.

What does it look like?

Start with rewarding consumers for their loyalty. This may be a single reward or a recurrent reward, for instance, to commemorate their birthday or the anniversary of their subscription to your service:

SMS example of a birthday reward for a customer

Upon their response to your first message, you can send them the offer to refer your service to their friends and acquaintances in exchange for more benefits.

SMS example with an offer to refer a service to their friends

Customers respond to loyalty with loyalty. “Our poll has shown that 70% of consumers tend to support the brands that reward them for their loyalty”, says Karen Griffin, a researcher at Flatfy.

So, if you are using SMS for your referral marketing campaign, you can follow the less invasive way and lure your customers with a loyalty bonus before asking them to refer you to their acquaintances.

Option #2: Expressing Gratitude for Loyalty

While the first approach is more cautious one to avoid making your SMS too promotional, you can also directly invite your customers to participate in an exclusive referral marketing campaign as a ‘thank you’ for their loyalty.

We recommend, however, addressing each customer by name to make the offer more personalized:

Example of a personalised SMS message

Adding loyalty by personalizing your messages is not just crucial to get the attention of your customers. It also benefits customer retention, as you make a move to build stronger relationships with your customers.

Option #3: Building the Army of Advocates

Ultimately, the goal of all your referral marketing efforts should be creating the army of loyal advocates, who will regularly bring you new customers.

Among the brands that do it best, we should single out Airbnb. They currently have several ongoing referral marketing campaigns, about which they notify their customers via SMS. As of now, anyone interested in promoting their services can become the advocate of the brand:

SMS referral campaign example used by Airbnb

You can already start preparing for this campaign, even if your business is still small. Airbnb collects the phone numbers of its users for sign-up reasons and then uses them for referral offers and other promotions. You can do the same and, after you collect a solid number of loyal customers, you can make an ongoing SMS referral marketing campaign.

This is a great way to round up your referral marketing efforts and make them run on an ongoing basis to eventually build a big army of advocates, who will bring you new leads.  

Create Your First SMS Referral Marketing Campaign

Big companies around the world, like Airbnb, are using SMS for their referral marketing campaigns. SMs messaging is a great way to reach out to customers and notify them about offers, as these messages have great open rates and response rates.

So, don’t lag behind and start your SMS referral marketing campaign now to attract new consumers and retain existing customers with minimum effort!


Ryan is a passionate writer who likes sharing his thoughts and experience with the readers. Currently, he works as a content editor and internet researcher, and you can check his website. He likes everything related to traveling and new countries.

Ryan Pell
2020-04-15 00:00:00 UTC