Ever wonder, “What is referral marketing?” We have the answer for you!
How many times have you told a friend or family member where to get the best meal in town? Did they decide to dine at that certain restaurant based off your recommendation? Well, congratulations. You’ve successfully implemented a basic form of referral marketing. Word of mouth has always had a strong effect on small and large businesses, and will continue to work with technological advances.
But what is referral marketing doing for your business? Regardless of the industry that you serve, a solid referral campaign will influence the growth of your customer-base and their retention rates. The internet, particularly social media, has given every one of your customers the tools to promote products or services and influence their social circles to purchase them, too.
What is referral marketing? Word of mouth is easy to understand, but what else can happen?
In the simplest terms, referral marketing is the act of influencing and encouraging current customers to refer your products or services to new prospects. You are asking your customers to market your product to their social circles. And remember, with the help of social media, a social circle can now reach hundreds or even thousands of people.
But that’s only a single slice of the referral marketing pie. The major channels for referrals extend beyond word of mouth and social media. Here are the most common channels for referrals:
- Word of mouth/social media (friends, family, colleagues, associates, etc.)
- Industry-relevant publications
- Online reviews and opinions
- Influencers (industry celebrities/experts, bloggers, popular social followers)
- Customer testimonials
Here is one thing to keep in mind: referral marketing can also work against you. If you don’t offer outstanding customer service backed by quality products and services, these “negative referrals” can quickly damage your reputation and influence people not to buy. So focus on creating the best product possible and building exceptional service first. Everything else comes second, including a referral marketing campaign.
What is referral marketing doing for you?
1. Provide opportunities to share experiences
Before your customers willingly give a positive referral about your product, they need to be given two basic incentives: an exceptional experience and an easy opportunity to spread the word.
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Did you know that you can use our CRM software to track referral leads from different sources? Find out which sources are giving you the best results with our one-of-a-kind system. Sign up with Blitz today for a 30-day free trial. Sign up with Blitz today for a 30-day free trial.
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So how do you create experiences worth sharing? You need to present your products or services in a way that deserves recognition. Take an honest look at your customers’ buying experiences and ask yourself if there’s more you can do for them.
How can you make an impact that makes people want to tell others about your business? Furthermore, how can you make it easy for those customers to share?
Here are a few ideas:
- Follow up with a hand-written letter. Show your customers they’re special and deserve recognition. On the note, ask them to share it with friends and family.
- Make your packaging impressive and easy to stand out. Think of ways that will inspire your customers to take a picture or video that they in turn share online.
- Set up your website architecture so that every page gives an opportunity to share on social media. The easier it is to recommend your business, the more likely your customers will take the time to do so.
2. Create a referral program
Provide an incentive for customers who refer other clients to your business. If you reward your customers and new clients with something they crave or find valuable, they will have a good reason to spread the word amongst friends and family.
To find out what incentive works best for your business, spend time researching what of your products or services is most popular or valuable to customers.
- Conduct a quick online survey asking what type of referral program your customers would like to see.
- Analyze the statistics and patterns of buying cycles, looking for a clue to what discounts will perform best.
3. Influence the influencers
Chances are you already know the online influencers within you particular industry. They may be bloggers, third-party reviewers, popular Twitter users, or Instagram or YouTube celebrities. Potential (and current) customers trust these influencers and will make buying decisions based on their “expert” opinions. Here are a few ways to utilize that leverage:
- Contact the niche influencer and ask them to conduct a pre-launch review of your new product.
- Pitch her on writing sponsored content (or natives advertising) on her blog or website.
- Offer them a special discount or offering for every referral lead that converts into a new customer.
4. Ask for opinions, reviews, and testimonials
Allowing customers to publish reviews on your website can persuade web visitors to spend more time researching your services or products. However, before you offer this ability, it’s important that you have two things: 1. a great product or service you believe in 2. customer service that goes above and beyond the expected. Otherwise, these reviews can work against you.
Asking your customers for testimonials and publishing them on your website can also push web visitors further into the buying cycle. Testimonials works well for B2B companies, too.
Ask yourself: what is referral marketing worth to my company?
If you’re looking for one good reason to invest in a referral campaign, consider its cost effectiveness. Interruption-based marketing, such as television commercials, radio ads, pop-up boxes, are expensive and typically work by the “spray and pray” method. Referral marketing is extremely targeted and costs little to nothing to approach.
Building a program of incentives and discounts will bring in new business, and once initial promoting is complete, your customers will promote your goods or services for you. Word of mouth has been effective since bartering and selling of goods first started. Referral marketing will continue to change with technology and market needs as well. Take advantage of it today.
What’s your opinion on referral marketing? Do you have any questions about how to get started? Share your thoughts in the comments section.
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Did you know that you can use our CRM software to track referral leads from different sources? Find out which sources are giving you the best results with our one-of-a-kind system. Sign up with Blitz today for a 30-day free trial. Sign up with Blitz today for a 30-day free trial.
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