Launch your custom referral program in minutes with Referral Factory’s no-code, plug-and-play platform. You can automate rewards, track referrals, and tap into a network of 100,000+ affiliates to grow your business faster. Trusted for ease of use, enterprise-grade security, and 24/7 expert support, Referral Factory turns your customers and affiliates into powerful promoters.
In this episode, we speak with Kirsty Sharman, Founder and CEO of Referral Factory. We discuss the effectiveness of company referrals in generating organic leads and how Referral Factory simplifies setting up referral programs without complex integrations or coding. Kirsty shares her journey from influencer marketing to founding Referral Factory, emphasizing the importance of referrals in high-trust industries. They also explore the role of AI in streamlining referral program setups and the future of trust-based marketing in an increasingly content-saturated digital landscape.
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Show Notes
Takeaways
- Referral marketing is an effective way to generate organic leads.
- Kirsty Sharman transitioned from influencer marketing to referral marketing.
- Referral Factory simplifies the process of setting up referral programs.
- AI is revolutionizing the setup of referral programs.
- Risk-free marketing is a key advantage of Referral Factory.
- High-trust industries benefit most from referral programs.
- Influencers may not always be trusted sources for referrals.
- Businesses can launch referral programs quickly with Referral Factory.
- The marketing landscape is becoming increasingly competitive.
- Trust-based marketing will be essential in the future.
Chapters
00:00 – Introduction to Referral Marketing
01:19 – Kirsty Sharman’s Journey and Referral Factory
07:58 – The No-Code Revolution in Referral Programs
14:10 – AI Integration and Customer Support
17:35 – Seamless Integration with Existing Workflows
22:00 – High Trust Industries and Referral Success
25:01 – The Power of Referrals in SaaS and Online Businesses
26:00 – Trust Issues in Influencer Marketing
27:12 – The Value of Customer Referrals
29:50 – Estimating Referral Potential
30:34 – Rapid Implementation of Referral Programs
35:30 – Emerging Trends in Marketing and Content Overload
38:57 – Building Trust in a Digital Age
Transcript
Beau Hamilton (00:00.908)
Hello everyone. And welcome to the SourceForge Podcast. Thank you for joining us today. I am your host, Beau Hamilton, Senior Editor and Multimedia Producer here at SourceForge, the world’s most visited software comparison site where B2B software buyers compare and find business software solutions. In today’s episode, we’re talking about company referrals. That is when existing customers or partners recommend a product or service to others. It’s an incredibly effective method of generating new organic leads for businesses without a lot of the, you know, heavy lifting of traditional sales or marketing approaches.
Our guest today is Kirsty Sharman, Founder and CEO of Referral Factory, a platform, built to help businesses quickly set up and manage referral programs without getting, you know, tangled up and lost and complicated integrations or needing to code. Basically they aim to, to take a lot of the complexity out of referral programs to make it easy for, for any business to handle. So we’re going to talk about how she got the idea for the company, how the platform has evolved over the years and what businesses are, you know, really looking forward to.
When they dive into referral marketing and we’re gonna cover some some of the key marketing trends out there. Talk about the future of referral marketing and all that fun stuff So there should be a lot to extract from this episode with that said, let me introduce Kirsty Sharman and Kirsty Welcome to the podcast. Glad you could join us.
Kirsty Sharman (01:19.542)
Yeah, Buu, thanks so much for having me today. I’m really looking forward to chatting and yeah, I’ve been a customer of your company for a long time. I’ve used it to choose a lot of software providers. I’m glad to finally be more involved and being on one of the podcasts instead of listening to them.
Beau Hamilton (01:38.082)
That’s awesome, yeah. We’re excited to have you here. I wanna just get started. Maybe you can kind of introduce yourself, introduce Referral Factory for those of us who might not be super familiar with the company and just talk about how it fits into this marketing space as a whole.
Kirsty Sharman (01:55.488)
Yeah, okay cool. So my name is Kirsty Sharman. I’ve been in marketing since the start. So I’m an entrepreneur about trade, so I’ve always done my own thing, but all of my companies have been in marketing. I’m obsessed with helping companies grow, finding new innovative ways to acquire customers.
Naturally, that leads to having marketing startups and Referral Factory is my second one. I had an influencer marketing platform before this, which I exited about seven years ago. Did a bit of consulting kind of in between there and got really excited about referrals. And yeah, now I run Referral Factory. We are a four year old startup and essentially we help.
Companies build their own referral programs, you said, without any code, without any hassle, without any technical things. I am obviously an advocate for referrals. I it’s a super great way for companies to grow. Just ask your customers to refer friends, ask affiliates to refer friends. And really, that’s our entire mission at Referral Factory. We obviously are a software platform.
But at the end of the day, we are looking for the fastest, sort of easiest way for a company to launch their own referral program and have the ability to ask their customers and fans to refer their friends.
Beau Hamilton (03:15.254)
Yeah, I think every company needs to have a referral program in some way, shape or form. Especially if you’re online, it’s the modern day word of mouth way to get your product out there.
Kirsty Sharman (03:28.108)
Yeah, I mean, the amount of times I like ask myself like, why don’t all companies already have referral programs? It’s something that keeps me up at night and I guess helps me know that I’m in the right business and right industry.
Beau Hamilton (03:40.738)
Totally. Yeah. Well, I’m just, I’m excited to just talk to you about your business because it’s very tangible for me having produced many tech, YouTube tech reviews in the past. I come from a tech, YouTube tech background. And, you know, I was frequently referring, you know, recommending gear for my viewers, signing up for tools that I’ve used with affiliate links, you know, and referrals are just a big part of that, that whole influencer creator space and building trust with your audience.
So now I’m curious, like you mentioned you had a separate company about seven years ago for, was it influencer marketing? Is that right? How did you, can you talk a little bit more about how you got into this space and kind of what inspired this pivot to Referral Factory?
Kirsty Sharman (04:28.11)
Yeah, so after, you know, kind of leaving my first company, as I said, I actually moved from Africa to Europe and things got really expensive. I had to start working again. And one of the things I was doing was advising companies how to grow. So I had some experience growing a SaaS tool and I was kind of acting as an advisor consultant, just helping other companies understand what they could do with all this VC funding they were raising and how they could use that to sort of drive growth.
I don’t know, at the time, this is maybe four years ago, clicks were becoming more expensive, you were getting less conversions off the same money. I was pulling my hair out, I was trying to grow these businesses, but it just wasn’t as easy as it was five years ago, 10 years ago.
And yeah, it was really hard and there was a lot of pressure on me. so I guess pressure is really good because it helps you kind of find new innovative ways. And I remember actually just thinking actually once, one of the customers had a pretty large, that I was working with four years ago, they had a pretty large user base. And I remember, I was reading something online and I think I read something about Dropbox. They were one of the early pioneers of referrals.
And I read that story and I thought, okay, well, this is great. And I did the maths and if we have this many people and each one asks another to refer. And yeah, so I went, I convinced this company, let me build a referral program for you. That’s one of the methods you can use to grow. Back then it was back, it was clunky. Now there’s off the shelf software. It can be up and running quickly.
But back then everything was custom and we had to get a developer to help us. But yeah, essentially we launched that referral program and in that company, they doubled their entire user base in three months. It was three months and we managed to double the user base just by asking for referrals and asking for more referrals and asking the new people who came in to refer. And honestly, it felt like I struck gold as a marketer. I was like, this is incredible. Every business needs to do this.
And really, then I started looking for tools online. I started looking for, how could I launch a referral program for every company I was working for? And there just wasn’t a lot of really good out of the box tools. All of them required demos, long setups, and scripts, and technical things. And yeah, I just thought, if we just make this easier for businesses, there’s really no reason for them to not try it.
And that’s how Referral Factory was born. Referral Factory was born because I kind of had stumbled onto something that I knew worked really well to drive results and to drive growth for businesses but I knew it was actually quite hard and technical and expensive to do. And that really kind of fits with the recipe for another SaaS and being a natural entrepreneur, I kind of said, all right, well, let’s turn this into a company. Let’s give people the ability to try this for a low monthly fee. And yeah, so just by changing the model, but essentially it was out of a need at the time I was kind of doing a bit of consulting work, needed to grow some businesses and yeah, used referrals, very manual spreadsheets, it was terrible to execute it, it was terrible. But results were there. And I think that was the most important. And because the results were there, I got really excited about it. I get obsessed with things. So very soon I was just obsessed with every business in the world having a referral program. And I fired all my consulting clients and went all in. So yeah, that’s how I got here.
Beau Hamilton (08:00.31)
That’s great. That’s great. I love that. Yeah. It’s like seeing the results you’re able to have for a client really just keeps the fuel to your fire, so to speak. That’s awesome. Yeah. I want to get into this no code aspect of your platform and how your platform makes it easier than some of the other solutions out there. Because obviously this is a crowded space. I referrals have been, you know, around in various forms for a number of, for many years now. but like you were saying, there’s like technical, kind of hurdles companies have to go through and influencers. so what, what are, guess maybe you can just speak a first, like why are customers choosing Referral Factory over some of the competition out there? You know, what makes you different?
Kirsty Sharman (08:50.337)
Yeah. Yeah. Yeah. So I would think like the one thing that makes us really different is the fact that like we’re actually, you know, we’re marketing led. So we are a marketing team building a marketing product, understanding what marketing results will be. The support you get is from marketers, essentially. So yeah, we have a technical team, you know, we’ve got eight engineers and we all work together. But yeah, having like a founder as a marketer, think is actually quite makes us quite results driven for our customers. So I think being, you know, being marketers, building for marketers is really helpful.
I think the other thing that’s, that’s also a bit different about us. I would say this is quite a new difference actually, but it’s evolved over time. you know, about a year ago, we used to, you you used to get onboarding and someone from my team would help you set up your referral. They would even write the copy for it. Like we were all in helping you get set up and you know, only charging $200 a month. So you have to work quite a few months to get your money back on those things. But as I said, we really believe that if customers did this, they would stay customers. And that’s kind of proven to be true.
But AI has really helped us. So actually, really just in the last, I would say, three or four months, the amount of AI we’ve introduced to our product to make this setup a lot easier for customers, which means you now can go into Referral Factory, put in a website, and just from a website we can pull your brand tone, your logos, your colors, we write all the copy, like your entire end-to-end fully customized referral program is now created by AI. So what used to take you days to do now takes you minutes. So I think, and again, coming from an understanding of a marketer that you want to run an experiment. Most marketers don’t ever say, want to do this. They say, I want to try this. They want to try this new thing. And if it works, they scale it out. So I really understand that, especially for the first time for a business doing this, they don’t want to spend weeks on the setup.
They want to spend minimum days because it’s an experiment and it needs to prove itself. So I think we used to have a lot of human involvement and it’s now kind of evolving to AI involvement. But principally, I think we’re just way more hands on with the setup, way more invested into helping you get going. I think there’s another reason actually that customers choose Referral Factory, which is kind of like our risk free model.
The whole entire way that our system is designed is that the reward is only paid out to the person who makes the referral when it’s successful. So not when someone sends you a lead, when someone sends you a lead and that lead pays you money and that money reaches your bank account. So essentially what this means is like, this is risk-free. I don’t know how much kind of experience view you have running, say Google AdWords or Facebook Ads, but you’ve got to go in there, you’ve got to put a $500 budget a day and you have to hope that something comes your way. And I think the fact that we’ve designed our platform to protect brands and to make sure that they got actual like converted, you know, acquired a customer generated revenue before they have to pay out the reward.
I think is fundamentally different to not necessarily the other platforms, but the other channels. So if you invest, if you’re doing marketing across a bunch of channels, there really aren’t a lot of channels that are risk free anymore. Most of the channels you have to have a high upfront investment and you have to hope it’s gonna work. Whereas a referral program or affiliate program, especially if you’re using Referral Factory to kind of power that, by default you’re not paying out a cent until you get a conversion. So I think marketers like the risk-free components of working with Referral Factory. Sure, they might have a small software fee to pay us to kind of keep their program running, but they don’t have to fork out thousands of dollars to get going. You know what mean? You just have a little bit of time, and I think that’s really good. And I think there’s another reason.
When we initially launched, focused a lot on customer referrals, so helping brands leverage their own customers to make referrals. And in 2025, we also actually launched like a private closed affiliate network. we now are kind of the platform you come to if you want to run a customer referral program, if you want to have an always on referral program where your customers can refer their friends and all the tracking is sorted out and people are coming for that. But when they arrive in the background, automatically we are matching their campaigns using AI with relevant affiliates in their niche who are most likely to speak about their product. So they’re getting this like added bonus of arriving in order to set up a referral program where they can ask their customers to refer. And next thing they’ve got an email, an inbox that an affiliate in their niche, in their location wants to promote their business and is ready to join their referral program. we find, you know, brands are kind of loving that.
More people we give them to make referrals, the happier they seem to be. So yeah, I would just say in terms of being faster set up, being risk free, and the fact that we offer one platform that you can run your customer referral program as well as ask affiliates to refer, you don’t need to have two platforms for that anymore, I think is another benefit that helps customers choose us.
Beau Hamilton (14:12.054)
Yeah, the all in one solution, so to speak. then the, yeah, no code, easy, you know, set up. I think it’s always interesting to hear about how companies are utilizing AI to kind of make things more efficient. And I imagine it frees, it just frees you up for other tasks, right? Like I know like a lot of companies are using like artificial intelligence for customer support, for example, trying to, to work with their clients to, maximize their ROI. But I imagine, you know, with the influencer marketing, you probably want to retain a lot of that human element and maybe, maybe the AI actually frees AI that you have built into your platform, maybe frees you up with being able to work more directly with customers, right?
Kirsty Sharman (14:55.884)
Yeah. We would say actually, weirdly, one of the things we haven’t moved to AI yet is our customer support. We tried a little bit and customers didn’t really like that. So we switched back to human and we’ll keep it human as long as they want us to. What we’re finding is very helpful. So like, I’ll give you an example is you come to Referral Factory, you enter your website, you hit next, and you land and like, it’s a pre-built referral program. And before it used to just have like template, like the text would say, join our referral program.
You know, like it’s little things like the text in the email notification that goes to someone when they’ve successfully made a referral, for example, the customer used to have to input all of that. So we would give them the builder with the pages and they would have to input all these like lines of text. I mean, to be honest now with AI is so good that when you generate your campaign, we use AI to learn your brand and write all your copy for you. So you don’t need a copywriter anymore.
So I would say for us, we’re more using AI to take away the manual kind of once-off task. that, I mean, we’re making ourselves available where they have questions as a human, if that makes sense. So before you used to have to…
It’s a very stupid thing, but before you used to upload your logo, like now we just get it with AI. You don’t have to do that anymore. So we just take away, you know, there used to be say, you know, 30 steps and we just try to take those steps away as much as possible and do them for the customer. It’s just one less step, one less thing they have to do. And yeah, a little bit we have also, we have an AI assistant.
And it works kind of separately to our customer support. But really what we’re trying to do with that is more help with education. I mean, it’s silly things, but we’ve run thousands of referral programs. So we know what works best and what doesn’t work best and what type of rewards work really well and what type of rewards don’t work. And these are the kinds of things we’ve learned. we’re trying to put a lot of that into like an AI model so that our customers can benefit from the knowledge we have, if that makes sense, to just cut their learning time. They don’t have to learn, can just ask and get the answer because we did all the heavy learning for the last four years.
Beau Hamilton (17:09.708)
Hmm. Now, one thing you mentioned earlier was, you know, some of the different platforms like Google AdWords and, you know, I’ve, I’ve worked with like Amazon, affiliates and different, kind of referral programs out there. and I’m curious, like, how do you, obviously there’s a lot, there’s a lot of, you know, to choose from and, and maybe some that, companies are already working with. So how do you help businesses integrate referral programs into their existing sort of workflow?
Kirsty Sharman (17:37.134)
Yeah, so that’s hugely important. And it’s important because a company wants to run a referral. You want to have a referral program ongoing. Like anytime your customers want to make a referral, they can log into their app or whatever, get their link and share it with a friend. So you want to do that. But you need some sort of like when the lead comes in, where does it go? And how does the lead, how do we know if the lead converts? And that’s all used to be manual. Like it used to be a manual process like.
I, this is, I feel embarrassed telling you this view, but honestly, when we first launched Referral Factory, essentially it was just pages. Like I could register on a page, get a link and send it to you. And then if you registered, the backend system could track, I referred you. And honestly, the first problem we had as a business was all of the brands were complaining like.
We’re getting so many leads, but we have to log into Referral Factory to get them. They were like, but we use like HubSpot. We, we use Zoho for example. So the truth is like your referral program touches your customers, but usually customers sit in a CRM. Usually customers have their customers sitting in like a CRM, like a monday.com or I mean, some customers even use Stripe as a CRM if you, if you in SaaS, but that’s kind of where the customer sits. So we learned very, very early that if we wanted to generate leads for our customers, what we needed to do is send them into the workflows they were already using. Less disruption. Like, we didn’t want them to have to log into another platform.
So basically that led us down the path of very, very, very deep integrations. So we are like verified integration partners with most of our kind of integration partners, you know, everywhere from like HubSpot, Stripe, Salesforce, Soho, Intercom, Make, Zapier, we’ve got a lot. And I really think the difference is just how deep our integrations are. And why they are so deep is because we want like a sync, basically. Like you have your referral program running on Referral Factory, but when you get a new lead, it goes into HubSpot and you have specific rules and those rules tell it what to do with the lead. So you have a setup once off, but essentially what integrations are designed to do is automate everything pretty much after the referral comes in so that a brand can just use their normal workflow.
If you use HubSpot, you can see inside HubSpot, okay, here’s Kirstie, Kirstie has three referrals, two of them have qualified. We’d no longer make you log back into Referral Factory to kind of see that data. So that was really kind of the biggest thing that we learned was, A, customers don’t want to do any manual work. They want it all to be automated, which is difficult, but we managed to do it. And then also like when they get a lead, that lead needs to go somewhere else and it needs to go to the same place all the other leads go to. So our integrations really focused, I would say like less on the performance of the program, but more on the making the management automated. Like customers didn’t want to have to employ someone to run their referral program. And essentially we have like very smart rules. Like you can set up a rule on Referral Factory.
Like, okay, if Kirsty refers a friend and that friend go, that friend’s in their deal stage in HubSpot becomes X, then qualify referral and then automatically issue Kirstie, Stripe, Credits, et cetera. So you can do all of this just setting up rules on Referral Factory. You do it one time and it runs automated in the future. But that was a really, really heavy part. I would say like we’ve probably spent close to 40 % of our dev time just on these integrations. And the reason we did these was just to make customers’ lives as easy as possible.
Beau Hamilton (21:22.36)
Yeah, no, that’s, think that’s a, that’s a good priority because that’s, that’s a question that I ask, lot of clients is just, you know, the integration capabilities and because there’s, mean, it’s 2025, there’s no like one, one size fits all one, one provider of any software nowadays. There’s all these different providers, kind of a fragmented system. So being able to integrate with the existing platforms is huge. And like you said, you know, we don’t want to have to, companies don’t want to have to, you know, they would try to minimize some of the manual work required to get their systems up and running. I imagine that’s a, you know, obviously a common obstacle and hurdle you see companies face. Now it seems like, again, you talked about like every business, every product online can benefit from a referral program. Are there certain types of businesses that maybe see more ROI from using Referral Factory than others?
Kirsty Sharman (22:19.33)
Yeah, okay. So high trust industries, I would say our biggest client set. And what do mean by a high trust industry? Like a high trust industry is one, if you can just kind of think to yourself, like where you would be more comfortable making a purchase if your friend also. So like if your friend was also with them, so like banks, insurers, home contractors, like, you know, I want the plumber that my friend used. I don’t want to get one of Google. I can’t trust that guy. And so home services like solar, solar is, I would say almost having this category. Another area where you really want to trust, especially with the girls, is like beauty type of products. A lot of people are relying on endorsements, recommendations from friends, also like medical aesthetics, like really big. And then like consulting services.
So as you can see, everything where someone would want a recommendation, like I’m not just buying a pair of shoes for $5. And I guess if, you know, shoes don’t cost $5, but you know, I’m not going to buy pair of shoes for $50. And if it breaks after two months, it’s fine. You know, for example, one of our first customers that are still a customer, they actually were our first customer and they’re still a customer today, is they sell pensions. So they sell pensions.
Honestly, like people are just way more comfortable to get a pension with a company that like their friends also have their pensions with. It’s just, I don’t know what it is, it’s safety in numbers. So we really found like trusted industry where people want to like read reviews, where they want to check before. The beauty of a referral is if I say to you, like, okay, let’s say I made an investment or I’m banking with this new bank and I say to you, I’m banking with them.
The beauty of that is you don’t need to go do the research. You just trust that I know. So that’s really what’s helping businesses. A lot of the times these kind of insurance businesses or banking businesses, even, know, the problem is someone Googles and then they check 50 competitors and then they compare them. And I don’t know if you’ve ever tried to make a sale in a situation like that, but it’s incredibly hard. It’s much easier to make a sale, close a lead.
When someone says like, my friend uses you, I was looking for the service and says you the right person, I guarantee you all you have to do is not stuff up that call and you’re gonna convert it. So really trusted services. And then I would say education is actually another pretty good industry because people who like the same things flock together. Like I was really into computers as a kid. I had other friends who were into computers. So I found like we tend to do really well in like student and education.
And then obviously like the last probably like biggest category is just like SaaS and online businesses largely for them because it’s so easy for them to ask for a referral when you log into the portal, show a pop-up, ask for a referral, etcetera. It’s a lot more difficult for traditional businesses to ask for referrals. They have to send emails. They sometimes have to print posters to ask for referrals. There’s many things they have to do. But a SaaS kind of company, you can just have a pop-up when someone logs in and you can ask for a referral. So it’s almost a no-brainer now for an internet type business.
But yeah, I would say, kind of anything that sits in the trust sector from finance, home services, beauty, kind of consulting. And then, yeah, kind of side trends we see is also like SaaS and education as well. We also have a lot of crypto, but I don’t know if that’s good or bad.
Beau Hamilton (26:01.914)
Yeah, crypto is interesting. So it makes me think, so like again, with the, background of the influencer kind of creator space, it just opens up these conversations of like the, how much can you actually trust? Is there like a trust deficit with influencers? I feel like, you know, when these referral leaks are first going around and catching on with like YouTubers, for example, it was a great kind of way to make some extra side money. But then it kind of got abused to the point where people were just referring things that didn’t actually really review or trust entirely. And now it’s like, and now it seems like you mentioned these, people, influencers, the creator space are, they’re not what you would consider high trust companies or no.
Kirsty Sharman (26:46.378)
I would actually say like the higher the following, the less the trust. The more followers someone has, the less likely. Don’t get me wrong, if someone’s got a million followers and they post about you, that’s not a bad thing. You’re being introduced to a million people, like you’ll get results from that. But it’s the same as just any online impression. You’re not buying trust, you’re just buying an impression.
You’re buying an impression. Everybody knows that it’s paid. Everybody knows why you’re there. Everyone’s fine with it. We all know how it works. But I wouldn’t say you’re buying an endorsement in that case. But I really do think, and that’s why our focus is so heavily, we’ve kind of introduced the asking affiliates to refer.
But really for the first three and half years of our existence, we only helped people build customer referral programs. And why we did that was there is no better quality lead than one that is referred by a customer. Because that person is genuinely there is no scam. Like I am genuinely a customer and sure, I might get a reward if I refer you, but I’m not lying. Like I’m paying them every month. I wouldn’t drink. Like the truth is people are not really that likely to throw their friend under the bus for $100. It’s not worth it. So we find just kind of smaller followings and rather ask a lot of people to refer with a smaller following than one person to refer with a large following because the smaller followings is really where you kind of get that trusted endorsement.
And often you find that in your customers. Like your customers are great. Like I can recommend a product to you that I genuinely use and like I’m not lying. Like I use it and that’s genuine and real. you know, it’s hard to find that anymore kind of in advertising.
Beau Hamilton (28:46.582)
Super true. And I feel like a lot of the high trust companies you mentioned are a lot of industries where you’re meeting with people face to face and like, you healthcare or banking, you’d go into, I mean, you hit the nail on the head with the kind of bankers and buying a house, for example, when I bought my house, I was referred to a lender and I naturally trusted them. I, you know, not only was I looking for a lender, but I wanted one that I trusted and they, they happen to have when they worked with, I’m like, oh, my team, real estate team, they obviously have a number of properties. They seem trustworthy. So naturally it was a good fit for me.
Kirsty Sharman (29:26.732)
Yeah, and you can recognize that. Did you shop around? No, you didn’t shop around. You just went straight to the store. yeah, essentially that’s what we want to manufacture for our customers. How do you bring the best quality leads possible that is easy to close, persons likely to spend, likely to stay? The truth is you use your current customer base as your most trusted network and you ask them to bring more.
Hard to do, but yeah, it’s our mission.
Beau Hamilton (29:58.262)
Now, when a company signs up with Referral Factory, for example, how many referrals might a business realistically expect to generate when they launch a program? I know it kind of depends. A lot of factors.
Kirsty Sharman (30:08.566)
Okay, yeah, yeah, mean, okay, I do have some data for you on this. Obviously, every business is different. Obviously, there’s one other very important critical factor that if you are a rubbish business, no one will make referrals. Like sometimes people like, you go read their profile, and it’s like a million scam reviews, and they’re like, no one will refer. I’m like, okay, but you have to actually be a good business.
So I’ll kind of give you the loose formula on this, which is basically we say that if about 30% of the customers in your base, like in your sort of base or the people that you’re asked to refer, about 30% of them will become active. So let’s maybe just use a thousand. Let’s just pretend you have a database of a thousand like customers and fans, for example.
So if you asked all of them to refer, you would expect about 300 of them to participate. What I mean by participate in your referral program, on average they will make two referrals per year. So what does that mean? A thousand customers, 300 people participate, generate 600 leads. So off about a thousand customers, you can generate about 600 leads a year. I mean, it’s big. They won’t all convert. That doesn’t mean converted customers. You obviously have to then go and kind of convert those leads. But generally, I would say, yeah, as a standard rule of thumb, about 30 % of your base kind of participates. And of that kind of 30%, they’ll make an average of two referrals per year. If you don’t want to remember the maths,
There is a referral calculator on our website where you can just tap it in and it gives you the number. So you can either kind of follow the logic or just head over to our website and cheat and look at our referral calculator. And that will really give you a forecast. You can kind of type in your industry and you can type in how many customers you have and it will estimate for you how many referrals you can expect to generate.
Beau Hamilton (32:22.636)
And then what about like the realistic implementation timeline for businesses looking to sign up? Cause you mentioned like one company you worked with when we first got started is, you know, they start to finish, they were generating like twice the number of leads and within three months or so you said, what’s, what’s kind of the time, the rough sort of timeline of,
Kirsty Sharman (32:28.536)
Yes. So the timeline to get launched is really faster than it ever has been before. It’s incredible. We see businesses now launch same day, like sign up to Referral Factory and by that afternoon they’re asking for referrals. That is because we’ve introduced a lot of kind of AI to make this process simpler. I would say like a realistic deadline for a brand that is fairly established, knows itself, has a website, has a logo, kind of has the assets you need. I would be highly surprised if you weren’t up and running within a week. If you are not up and running for a week, in a week you’re doing something wrong. So you get a lot of work out of the box, but I really would say, yeah, more than a week would be long. And if I’m being honest, like you can launch in a day. Like if you work the whole day, you’ll launch in a day.
Beau Hamilton (33:29.238)
Wow. How does that compare to like, you know, maybe just a few years ago before you had some of these, these no code AI tools.
Kirsty Sharman (33:37.006)
My, I know because I was the idiot that had the spreadsheets. If I have to be really honest, I was obviously consulting at the time. So I was also charging customers to set up these referral programs. They were having to fork out thousands of dollars on a strategy and a custom build and a this and a that.
Because there was no other way. And then in the background, I was manually managing this thing on a spreadsheet and charging them by the hour. It was incredibly inefficient. For me, that was the thing that bothered me the most, was this powerful channel that can generate leads, but it’s so inefficient and expensive. But yeah, the world has changed drastically. And I would say in the last year the most.
And there’s a lot of things marketers can do now that they couldn’t. I would say you should be, as a marketer, you should be running a new experiment like every month. Every single month you should be trying a new marketing channel because it’s now easier than ever to do it. I understand before it might have taken you two weeks to launch a new marketing channel, so it just wasn’t sustainable. now a lot of, a lot of tools are bringing AI into their products and because of that, you can just get up and running so much faster. Even like setting up an integration is now so much easier. Yeah.
Beau Hamilton (35:01.846)
Yeah, it’s, I was going to say my next question is just like talking about this, the health, how quick things are changing. Right. I mean, we have AI, we have these, all these different privacy changes. just the, feel like consumer behavior is constantly shifting. you know, it might be too, too far to look out, but like how the landscape is going to change five years from now. But, you know, let’s say in the next, I don’t know, 12 months or so, what, what sort of emerging trend do you believe will have the biggest impact on your industry for businesses in this space and just kind of the word of mouth space?
Kirsty Sharman (35:36.152)
Well, I think, I mean, there are cool AI trend, but that’s the obvious one that’s hitting all of us at the moment, but it’s got a very specific, I guess, purpose or use case in marketing. And what we’re seeing happening is just there’s a total flood of just content on like content ads. So, you know, like my view on this is just say you log online today and you see a thousand online pieces of content during the day, you know, and a hundred ads. I really think 12 years from, I mean, sorry, 12 months from now, that would be 5X. And purely because of the rate that we can produce content and seed content and see that there’s TikTok, there’s YouTubes and multiple channels.
So I think this problem that I spoke about before saying like it’s really hard for brands to get seen online and for brands to have like a trusted message. I just think it’s gonna get worse. Like it will get worse and worse and worse until it’s like deteriorated. But you know, my biggest trend that I see coming is just like, we will just be flooded. Like flooded with content, flooded with ads. And I’m hoping that plays into kind of referral factories hand, which is, you know, we’re a marketing channel built on trust. We’re a marketing channel that says, rather than put up an ad and let and hope someone sees it, let’s ask one of your customers to make a personal recommendation and get your face in front of that person. You know, in order to introduce the brand.
So I think they will be a higher need for trust-based marketing channels in the future because I think it’s actually just becoming even more impossible. I mean, we still run some paid ads. It’s not that we don’t do that. obviously, for us, we acquire a lot of our customers through our, we’ve got an affiliate program as well as a customer referral program. We still use paid ads a lot. you know, just every month, the impressions get more expensive and the clicks get less every month. Like, and that is just a direct correlation to so much content online that people just have so much choice. There’s so many different channels.
So I just think the flood of content is going to make the trust problem 10 times worse. The other thing that’s going to make the trust problem 10 times worse is you’re seeing it already, like scammers, like fake sites, like fake. You already see all over on TikTok of this, a video that looks like the Daily Mail, that isn’t the Daily Mail.
Deep fakes are a massive problem and people are producing content that’s just not real. Fake reviews, fake everything. And I think that will just make trust in online go down even more. And I think in future as brands, like, yeah, I think the amount of money you will have to spend to reach a meaningful audience online will just be astronomical. So brands are going to have to look for kind of more trusted channels. I think that’s just the way it’s gonna go.
Beau Hamilton (38:34.344)
I 100% agree. How do you like, how do you, how would you say you, you improve trust with your, with your company? Is it kind of like pairing back some of the marketing, channels and just focus on a quality product, like quality sort of approach? Is it, cause like, obviously we see so many, like you’re saying that there’s like a flood of content. There’s more content that you can, you can create these AI sort of reels of, you know, talking about your business, talking about features and just flood the flood, the platforms with content, but if no one’s really seeing it and there’s not like a, maybe a really human connection, I guess it’s, no one’s going to want to buy or tap into it.
Kirsty Sharman (39:12.334)
Yeah, sure. I think, I think, I think although we’re all excited about AI that’s making, we’ve spoken about it half a podcast, it’s making things better and all of this. Like, I think AI is going to make the need for a face-to-face meeting and a call between me and you. And like, I think things where real humans are involved will become more, will become the trusted things. Like I have a feeling we’re going to go back to networking events. You know what I mean? You can’t fake that. I can’t, you know what I mean? I can’t, but I can make a deep fake of myself attending a webinar. So I think what’s gonna happen is a lot of this trust is gonna start happening offline. Like, I think online will be flooded and it will be hard to create trust there. And we’re gonna kind of have to go back to some basics as marketers, like good old word of mouth and events and these sorts of things that we all used to do. I think we’re coming back.
Beau Hamilton (40:04.372)
Yeah. Yeah. It’ll kind of, it’ll, it’ll bounce the pendulum will sort of swing back and yeah. Cause I mean that it’s true. It’s true. Yeah. I mean, we know that like the advertising industries online has been kind of dwindling, just with the kind of a flood of content. but there’s also just this, the whole framework of the internet is kind of up in the air with his AI sort of chat bots where people aren’t visiting websites as much and generating as much leads and, traffic. It’s, it’s hard to have like a rosy view of where things are going if you’re kind of so like, you know, if you’ve been on the internet and built your brand around leads for the last decade.
Kirsty Sharman (40:44.79)
Yeah, yeah. I mean, I’m having sleepless nights about it. Like, I’m like, gosh, this is bad. This is coming. But I mean, I think, I think I’ve also seen historically in the past, you have change and change creates panic and in the end, I guess things work out. So think we’re trying to focus a bit less on what are the risks it can bring us and we’re trying to focus more on how can we use this to deliver more value to our customers? How can we use AI to help customers get more referrals?
How can we use AI to improve our referral program software? What are the things we can do to make our referral software easier to set up, better to use. So, you know, I think AI is as scary as the direction you look. If you just look at the ways it can help you be better, you’ll sleep at night. If you look at the ways it could kill you, you’ll never sleep at night. I’m just using what to look at that at the moment.
Beau Hamilton (41:40.044)
Very true. Yeah. Yeah. And if you’re an optimistic person, you know, that’ll, that’ll help things. If not, you’re just gonna, there’s only so much you can do. but no, I think that’s great. I hope, I hope, you know, marketing professionals, influencers, I think are, I hope we’re all taking, taking notes right now. and I think just hearing your perspective and what you’re doing in the space, I think is, it makes me more optimistic and, it makes me, you know, like, I hope that people would want to get in touch with you and, work with you directly because you’ve got a lot of insights here and you’ve weathered the storm the past, what, seven plus years and then you’re obviously well equipped with some of these AI advancements.
So it’s super exciting. Now, where can businesses go to learn more about your company and get in touch with you?
Kirsty Sharman (42:28.622)
So anybody can just visit our website if they want to get started, if they want to launch a referral program today. You just head over to referral-factory.com. So I don’t know if we’ll be able to put the link up somewhere, but yeah, that’s referral-factory.com. You can also just Google Referral Factory. You’ll find us kind of at the top of Google. And yeah, other than that, if you want to speak to me directly, you can find me on X, you can find me on LinkedIn. Just look for Kirsty Sharman.
If you just kind of look for my name, you’ll find me. I don’t know if there’s another one. I think not. I definitely am the only marketer. I’m the only Kirsty Sharman in referrals. I’m sure of that.
Beau Hamilton (43:07.372)
Yeah, I found you at the top of the search results when I looked for you. So yeah, yeah, you’re well positioned.
Kirsty Sharman (43:10.796)
Yeah, so yeah, I would just say kind of if you’re interested in setting up your own referral program for your business, you want to try get more referrals, you’re kind of looking for new ways to grow, head over to referral-factory.com. Or if you want to kind of talk more about referral marketing, you know, you have a lot of questions before you kind of dive into this, yeah, find me on X, find me on LinkedIn, just look for Kirsty Sharman.
Beau Hamilton (43:34.104)
Kirsty Sharman, all right. That’s referral-factory.com, Kirsty Sharman. Appreciate all your insights and everything. This has been great. I could talk to you for hours, I feel like, and I actually would love to have you back and maybe we can follow up on some of the things you talked about here in the next, yeah, 12 months or so, yeah. All right.
Kirsty Sharman (43:48.3)
Yeah, cool. Yeah, thanks so much for you. Thanks for having me today. I really enjoyed it.
Beau Hamilton (43:54.38)
All right. Thank you for listening to the SourceForge Podcast. I’m your host, Beau Hamilton. Make sure to subscribe to stay up to date with all of our upcoming B2B software related podcasts. I will talk to you the next one.