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Referral marketing is an incredibly powerful way to acquire new business. Also known as word of mouth marketing, it is one of the most simplistic ways to reach out to new customers.
People trust the opinions of those they respect: family, friends, influencers and celebrities. It therefore stands to reason that if your product or service is recommended by someone, it will naturally capture the attention of that person’s network.
Why referral marketing works so well
Referral marketing is widely rated as one of the most effective marketing tactics. Here’s why:
Without trust, it is always going to be a huge challenge to get anyone to buy anything. People will rarely trust a pitch from a salesperson, because they know the reason they are backing the product is purely for the financial reward they’ll get.
A recommendation from a friend or someone else you respect, however, is a completely different story. You trust them; you value their opinion so therefore you’ll listen and take their advice. Research proves that people will for the most part be more likely to make a buying decision based on trusted opinion rather than a sales pitch or advert. In fact, according to a Nielsen study, referrals are the most trusted form of advertising by a considerable margin.
Today’s social sharing based lifestyle means that just one happy customer could provide a brand with access to thousands of contacts in an instant. All it takes is a Facebook or Google review, a Tweeted image or comment, or an Instagram share to deliver your product or service to a huge audience.
Influencers and bloggers are known for their extensive networks, meaning a referral from one of these could seriously widen your marketing reach.
We talk a lot about targeting and how it is vital to get this fundamental step right, otherwise your marketing budgets could easily drain away without bringing you a return.
The great thing about referral marketing is that it is naturally targeted. Someone who loves your brand tells someone else because they already know they are likely to be interested. Influencer and blogger audiences are made up of followers who subscribe because they share a common interest. So there you have your targeting, readymade.
How to ‘do’ referral marketing?
So, we’ve ascertained that referral marketing is incredibly powerful. But how to go about it?
Firstly, remember: referral marketing isn’t just about friends and family; referrals can come from bloggers, social media influencers, online reviews, testimonials and editorial content, so all these will need to be factored into your strategy.
Also bear in mind the important point that referral marketing works optimally when backed by an exemplary service or product. The better the buying experience, the more likely it is that a customer or influencer will share it.
So, if you are going to make referral marketing part of your promotional armoury, you will need to review your service levels, quality and customer feedback to ensure you actually have something to refer.
That done, here are a few more ways to implement referral marketing:
1. Make it ‘shareable’
Excitement and emotion are two things that will always compel people to share an experience. Anything that is tactile, great to look at, causes surprise and makes people want to instantly snap a photo will work particularly well.
If you are in the online fashion retail business for example, why not make the unwrapping experience something truly special? Craft paper packaging, ribbons and personal hand-written notes of thanks are sure to inspire a photo share.
2. Make it easy
If something is difficult to do, people generally give up. However, if you can make your referral process nice and straightforward, you will instantly enhance your chances of achieving great feedback.
Amazon for example does a great job of this by displaying a ‘share it’ feature following checkout. All you need do is select your preferred platform from the list and all the work is done for you. You can pre-populate Tweets and Facebook posts with readymade content so the customer doesn’t even have to think of what to say.
Also consider adding a ‘Refer us’ button to your website. Well, why not? If you don’t ask, you don’t get! Again this makes it simple for customers to tell everyone they know about their experience. You could offer a range of options such as Twitter, Facebook, Google and Trust Pilot so people can choose their favourite, or even use all of them.
3. Make it a campaign
Rewarding customers for recommending a friend is a highly effective way to achieve referrals and is widely used by all sorts of businesses and organisations, from banks and building societies right through to small, family-run businesses.
Referral and loyalty programmes can involve anything from voucher rewards to discounts, free stuff or even plain old cash. It’s worth looking into some of the specially designed apps that will help you implement and manage your programme too and your web team will of course be able to guide you on incorporating referral functionality into your site.
Ready to refer?
If you are excited by the prospect of the additional business you could attract by incorporating a referral programme into your marketing strategy but could use some help in getting started, why not talk to Figment? We can help you develop a workable and effective plan from start to finish, AND get the whole thing implemented for you. Referral marketing works, so why not make a point of learning more today?