The Refer a friend policy is a marketing tool which has been used for decades. Refer a friend goes by many names and is used in markets as diverse as apartment leasing companies and car dealerships to cell phone carriers, insurance companies and everything in between. However, there is a secret behind why so many companies and businesses use this policy.
Linguistics and psychology
The policy is highly effective in regards to the business generated from it. A lot of that success lies in the psychology and linguistics of the phrase: Refer a friend. For example, if the phrase was, "Friend Referral", the majority of people would focus on "referral" since it is the last word, and associate the promotion with sales. Once you are aware someone is trying to sell you a product or service, we often turn away. People must see the value in a product or service, and consider it an offer in order to buy.
The driving force Since the phrase is cleverly named, "Refer a friend", or "Recommend a friend", the lasting impression is the word "friend". The brain automatically thinks of a friend we can contact, and then we act upon contacting the friend and letting them know what offer is in store. This is the driving force behind the successful Refer a friend campaigns you see.
Imitations equals flattery
We have all seen a product, service or promotion which is so successful (BOGO or Buy one Get one free, for example), it is imitated by a plethora of other companies in attempt to recreate the success. Refer a friend is such an imitated service, in the form of Introduce a Friend, Recommend a Friend and Recruit a Friend. Recruit a friend Recruit a friend works like a referral system. The World of Warcraft online game offers recruit a friend: if a friend agrees to try World of Warcraft, they receive a free 10-day trial account. Many players upgrade to a paid subscription of the game after the trial. Recommend a friend DirecTV offers Recommend a friend. New customers to DirecTV are offered a $100 credit to their order. Introduce a friend Introduce a friend is the offer from SkyTV. New customers "introduced" to Sky through a friend will receive a $50 voucher in addition to a free gift. Final word As the old saying goes, imitation is the highest form of flattery, if you wish to attract more customers to your business, perhaps you should imitate this policy as well.