Things seem to change daily, but one thing that remains constant is that import tariffs are up. How much? Still uncertain. (understatement #1)
Supply chain costs have spiked and brands that manufacture or assemble overseas are feeling the pressure (understatement #2). At some point, customers will break: raising prices isn’t always viable. Cutting costs can hurt quality, slow delivery, or reduce service quality.
So, how do you protect margin in a market where your inputs are more expensive and your ad costs are rising too? The quick answer: You squeeze inefficiency from your acquisition strategy.
Referral marketing is one of the few levers left that lets you do that without sacrificing scale.
The Tariff Squeeze Is Real
We’re all feeling it one way or another. Whether you’re sourcing apparel, electronics, supplements, or home goods, global trade policy in 2025 is making it more expensive to buy and sell in the U.S. market. (understatement #3)
Here’s what most brands are dealing with:
- 10 to 25 percent import tariffs on key SKUs
- Increased freight and customs fees
- Delays from shifting to alternate suppliers
At the same time, customer acquisition costs are rising across every paid channel. The typical response so far has been predictable: raise product prices. This will eventually lead to conversion decline and long-term brand risk. The other side of the coin? Doing nothing creates margin erosion.
Referral marketing offers a smarter path. It allows you to improve your blended CAC without touching your product pricing and hurting your customer (and bottom line).
Referral Programs Create Efficiency
Referral marketing is post-transaction. It’s a complete shift in paradigm: You’re not paying for eyeballs, you’re rewarding purchases.
That makes the cost per customer clean, fixed, and tied directly to revenue. Unlike ad spend, there’s no leakage.
Plus, referred customers tend to:
- Convert more often
- Spend more over time
- Refer others themselves
This, in turn, creates a multiplier effect on acquisition and retention, helping you extract more value from every customer, without increasing media spend.
Referral in Practice: A Margin Play
Let’s say your paid CAC is $75 and rising. You offer a referral incentive of $15 to the advocate and $15 to the referred customer. That’s a $30 total cost; less than half your paid acquisition cost.
You haven’t raised your prices.
You haven’t compromised your product.
You’ve bought yourself margin protection in a turbulent cost environment.
Even better, the referred customer is more likely to convert, stick around, and refer someone else. The value of that $30 isn’t just in the one sale, it’s in the chain of referrals it initiates.
Here’s the Point
The fact is, you can’t control tariffs. You also can’t eliminate freight costs. What you can control is how efficiently you acquire and retain your customers.
Referral marketing is a structural cost advantage. It improves CAC, supports LTV, and scales without having to rely on volatile, 3rd party platforms.
When input costs rise, most unimaginative brands will continue to react by squeezing the customer.
The better move? Squeeze the inefficiency out of your growth model.
Referral marketing lets you do exactly that.
About the Author:
Jeremy Foreshew is a full-stack marketer with deep expertise in customer-led growth. As Head of Marketing at Talkable, he helps DTC and eCommerce brands turn their customers into their most powerful acquisition channel. Jeremy writes about referral strategy, retention, and the future of word-of-mouth marketing. He has been featured in Forbes, TechCrunch, and HuffPost.
