How to decrease facebook CPL with referral marketing

How to decrease your Facebook CPL using referral marketing

It’s no secret that most business owners are always trying to find new customers for their business through paid advertising, in exchange for the less amount of money possible.

Moreover, the biggest obstacle when it comes to the execution side of the above process is lowering the cost that you have to pay to acquire a new lead, or as we marketers like to call it, Cost Per Lead (CPL) optimization. 

In today’s article, we’re going to analyze how you can bring down your Facebook CPL remarkably by properly utilizing the power of referral marketing, as also how you can turn your existing customers into brand ambassadors.

So let’s not waste any more time, and let’s jump straight into it!

What is referral marketing?

Referral marketing is a marketing channel that makes use of word-of-mouth and recommendations to grow a business’s customer base through the networks of its existing customers. 

Referral marketing can take various forms, but its core idea is that it’s a way to get your business’s biggest fans to help spread the word about your brand. 

In other words, referral marketing is a great way to convert your current customers into brand ambassadors/advocates.

But let’s cut it here.

If you want to have an in-depth look at referral marketing, I highly recommend diving deeper into it, by checking out our actionable guide around referral marketing, as well as our various case studies. 

Trust me; you’re going to love them. 

Now that you’re aware of what referral marketing is, we can proceed to the juiciest details of our article.

referral marketing guide

Use referral marketing to bring down your business costs

As weird as it may sound, referral marketing alone can save your business some serious money.


Well, let’s say that for each unique customer that you acquire, you’re spending $7 on Facebook ads.

Now imagine if this unique $7-worth customer you just acquired, invites three friends to use his referral code, for them to enjoy a 15% discount on their first purchase in your store.

Well, I got good news for you; your CPL just dropped from $7 down to $1,75.

When I first listened to this, I thought it was some kind of a “dream” scenario. 

But after diving into referral marketing, I’ve come to realize some outstanding facts that are hard to ignore;

Well, it seems I was sleeping on referral marketing four years ago, but since the day I realized all the above, it’s a no brainer for me to implement it on various marketing activities of mine.

Blend paid advertising with referral marketing

Now that you’re aware that referral marketing gives you the leverage to cut down your business costs severely, the next significant step would be to start utilizing it.

Let’s see how you can do it with the help of paid advertising.

If you’re using our Milestone referral template or any other milestone referral program out there, you should be already aware that what users should do to unlock milestones and earn rewards, is to invite their friends to join your campaign.

So if you think about it logically, what can we do to affect the above process positively?

The answer is simple; 

Push more users to refer more friends for them to climb our milestone ladder and go after more valuable rewards!

An excellent hack that Joywears did when they raised over $100,000 on Kickstarter using our Milestone referral template, was to setup up remarketing ads to remind their participants to come back and refer more friends to their campaign;

With these awesome tricks in Facebook ads, they managed to convert every single sign up into 1.4 sign-ups.

*Bonus tip

When choosing rewards for your campaign, keep in mind to select rewards that promote your brand’s identity and showcase the actual quality of your products, just like Joywears did with their prelaunch campaign;


Let’s get technical

I like the above concept we mentioned, but I tend to believe that if this was something that worked for Joywears, it has the potential to become even more appealing.

To break down it even further, I like segmenting my audiences into; “hot,” “warm,” and “cold.”

I consider “hot” and “warm” audiences as remarketing audiences, and I treat “cold” targeting/audiences, as an expansion opportunity for my business.

At this point, I highly suggest checking out my latest article about Facebook ads to understand the point of this whole section better.

So, to keep it short and to the point, I suggest you remarket not only to people who have already joined your referral campaign intending to push them into inviting more friends but also to people who are already aware of your brand/business in general.

To put things in greater detail, when setting up remarketing ads/campaigns for your referral campaign, I suggest you consider testing the audiences below (from hot to warm);

  • People who completed a purchase (in the last 5-30 days)
  • People who added to cart (in the last 5-30 days)
  • People who have specifically visited your referral’s campaign landing page (in the last 5-10 days)
  • People who submitted their email in the last 30 days
  • People who engaged with your Facebook page (in the last 20-90 days)
  • People who engaged with your Instagram page (in the last 20-90 days)
  • People who have visited any page on your website (in the last 5-60 days)

All the above audiences are audiences that I’ve personally tested various times, and the majority of the times, their outcome was as impressive as their metrics were!

When setting up your remarketing campaign, make sure to split all audiences in their individual-dedicated-adset, rather than stacking them all into one remarketing adset, so you can better understand which audience converts better for your business and eventually double down on it.

To continue, as I already mentioned, I always like to invest a percentage of my referral’s campaign total budget into cold targeting because not only it’s an excellent opportunity to attract new customers, but because a referral campaign is a unique way to introduce yourself as a business.

In case you’re still struggling with researching and finding new audiences for your business or with setting up traffic and remarketing campaigns, feel free to check out our previous article.

Before you go

Whenever you’re thinking about planning and structuring a marketing activity to gather new customers/leads or promote your business, you should consider taking advantage of referral marketing seriously.

As you may have already understood, referral marketing will not only decrease the cost of acquiring leads, but it will also make your customers perceive your brand as much more unique!

In case you have any questions or you need more information, feel free to shoot me an email or let me know in the comments below.

See you at the next one!

Leave a Reply

Your email address will not be published. Required fields are marked *