There is no marketing method that can bring new customers as fast as referral marketing. You may have tried traditional forms of marketing where you create profiles, submit links or promote your website through search engine optimization. But none of that will be more effective that signing up your customers as your personal marketers.
Referral marketing is a method that leverages people. Unlike other forms of marketing that focuses on ‘getting the word out to as many people as you can. This works the other way around. Instead of constantly broadcasting your brand to your target market, you let your target market find you through their loved ones.
Think of it this way. Let us say that you are new to school and you don’t know who to select as your professor. Then, you have this professor that shouts through the halls and promotes himself. He told students that they should choose him. Then, you found your friend coming your way and he tells you that you should get his professor in his class. Which will you take? The professor that shouts to promotes himself or the one recommended to you? I am pretty sure that you will choose the latter. This is how referral marketing works. It utilizes people who had a previous relationship with your brand and asks them if they can recommend products and services to their family and friends.
Still not convinced? No problem! Here are 10 more reasons.
Referral Marketing Leverages Personal Relationships
One of the main reasons why referral marketing works is it leverages personal relationships. Unlike traditional marketing where it is done to clients who the business owner hardly knows, referral marketing is done by leveraging customers and asking them to promote the brand to their family and friends. This makes use of existing networks. Because of this, it is far more effective than finding cold leads in traditional advertising. After all, this approach has a higher chance of a conversion. Since the referral knows the referrer personally, he or she is more willing to do the referrer a favor by signing up. This makes it more effective than other forms of marketing where you blast your brand’s message hoping that others will take notice.
Referral Marketing is Incremental
Another reason why referral marketing works is its incremental nature. When you promote using referral marketing, you are not only giving your customers the power to invite other people. You are also empowering the referrals as well. This means that every person that signs up to your referral campaign has a chance to promote your website. Usual traditional marketing is linear. The business owner promotes the website and gets a customer as a result of that promotion. And it ends there. The customer doesn’t invite new people to the system. However, when you have a referral program, it’s different. This means that every customer you get has the power to invite other people to your site. And the number of people who can do this will keep on growing as you get more customers to your business.
Referral Marketing Brings in Customers with High Lifetime Value
Lifetime value is a very important factor for business owners. Ideally, they will want a customer who has a high lifetime value. This means that the customer will likely buy from the brand after their initial transaction. This means that transactions are not done on a one-time basis. Instead, it is done continuously. You can consider these are repeat customers.
Referral marketing has a way of attracting these customers. This is because it is a form of marketing that is based on trust. With trust, the customer is far more likely to do repeat transactions. Of course, you have to combine this with a superior product or service to keep your customers coming back for more. A company doing an awesome job at referral marketing is hunting bow Labs which helps companies to find hunting bows.
Referral Marketing Provides Solid Social Proof
One of the problems of a brand new business is gaining social proof. When you are new to the market, no one will trust you. This is because you may not have enough testimonials. These days, social proof is really important. It is quite common for your customers to scour the internet the reviews before buying. The best thing about doing referral marketing is it creates instant reviews. With the goal of recruiting more referrals, your referrers may resort to writing reviews about your products and services. These can act as reviews and can give your business some social proof.
NOTE: Having good social proof in your business has lots of benefits. Aside from increasing brand trust, it can also stop shopping cart abandonment. Abandonment has always been an issue for eCommerce website owners. If you want to lower this and increase your conversion rates, referral marketing is your best bet.
Referral Marketing Leverages Social Media
If there’s one platform that is gaining more traction when it comes to attracting audiences, it is social media. In the old days, everyone goes to Google or other search engines to search the Internet. These days, there are also tags and social media. These days, people can also find what they are looking for through the social media search feature.
Given this knowledge, it is important to know how to use this to your benefit. This means that you should promote your referral program on social platforms as well. The best part is that it works together. You can get more referrals using social media and social media, in turn, can bring more people to your referral campaign. This means that you can get more referrers and referrals in social media.
Referral Marketing is Perfect for E-commerce
E-commerce is a growing industry on the Internet. Back in the day, it was not as popular due to the fact that online audiences are apprehensive about taking out their credit cards and buying over the Internet. But times have changed. As more and more people try buying from e-commerce platforms, their trust also increases. This means that more and more people are now buying online. As a result, the number of online stores has also increased drastically.
Referral marketing is an effective form of marketing an eCommerce website. Usually, a new visitor is usually hesitant to try a product because they don’t know if it works. But if they have someone they know that would recommend the product to them. They are far more likely to buy because they know the person. This shows how referral marketing can drive new customers to an eCommerce site. It does that by inviting new customers through the power of word of mouth.
Referral Marketing is Easy to Implement
Referral marketing may seem complicated at first. This may be because it entails creating a system where you allow your customers to sign up and refer new people to your site. But it is not that hard to implement. These days, there is referral software. There is also custom software for your desired platform. There are Shopify apps or Woocommerce affiliate plugins. It all depends on the platform that you are working on.
You don’t even need to be an old business to implement this. Take Best Drums Set Labs for example. They are not that old but this strategy has helped them get more customers to their business. Referral marketing works for any business no matter what stage it is in.
Referral Marketing Attracts Influencers
Another benefit of referral marketing is it attracts influencers. These days, the best way to promote a website is not through submitting links or building as many backlinks as possible. The key is to find influencers that can promote your website for you. This is a far better use of your time. Why influencers? Well, influencers are great because they have already built their reputation and they have a loyal list of followers. These people are willing to follow what they have to say. This is powerful for it can encourage more sales for your website.
Referral Marketing is Effective Even for Brand New Websites
Did you know that you can use referral marketing even for brand new websites? A common dilemma of new small business owners is that it can be quite hard for them to promote a website that has no followers, no subscribers, and no sales. The website has no proven track record to share so it is significantly more difficult to get new customers. But that doesn’t have to be the case with referral marketing. In fact, it is the secret of big brands such as Airbnb, Uber, and PayPal. These businesses started with no users or subscribers. But they are able to build their user base through referral marketing. What they did is attract their potential customers through a reward. From here, they are able to slowly build their followers to how it was today. Today, these businesses have at least 1 million users. And this all started from implementing a referral marketing program.
Referral Marketing Enhances Your Brand Image
As mentioned, referral marketing can increase your social proof. Inevitably, it also affects your brand image. This means that as more people talk about your brand, the better your brand will look to other people. Brand image is very important in online businesses. It is not enough to get a sale. You need to be known and remembered for what you sell. Ideally, you’ll want your customers to think about you when they need something. This means that your name should not only be memorable, you should also offer a positive user experience that can be easily recalled by your customer. When you do this, you will be at the top of their mind when they want to buy a particular product or service.
Create Your Referral Program Right Now
Now that you see the value of referral marketing, it is time to create one for your business. Here are 3 easy steps.
STEP 1: Choose a Reward
A referral program starts and ends with the reward. This is the magnet that draws customers to your campaign. This is their bribe or incentive. This is the reason why they are driven to promote your business.
Rewards don’t need to be overly complicated. You don’t even need to give away cash. Discount codes are fine. It will help if you will look at the purchasing behavior of your customers to see the items that they are interested in. You can then give some away or give them exclusive discount codes to these products.
STEP 2: Choose the Mechanics
Next, you need to refine the mechanics of your referral program. You can do this by selecting who to reward. In every referral program, there are two actors. There is a referrer and a friend. The most common actor who is rewarded is the referrer. This is the actor that does the promotion. Then, there’s the friend. This is the person who signs up as a result of the referrer’s recommendation. Ideally, you’ll want to reward the two to eliminate any chances of them feeling hesitant about acting on your campaign.
STEP 3: Create and Promote Your Program
Once you have all the details out of the way, you can now create your campaign. Doing this is as easy as setting up the software on your platform. From here, you can set up your campaign in a few clicks. You just need to key in the details that you have sorted out in steps 1 and 2.
Once that’s up, you just need to promote your program. Be sure that it is prominent enough that your customers can see it. The best places are in the navigation bar, sidebar or pop-up window on your website. You can also put it in your checkout pages and emails. This will encourage your customers to sign up before they proceed with their transactions.
Creating a referral marketing campaign is really not that hard. With software, you can easily set it up in a few clicks. The key is to know how to promote it so that you can get more referrers. The more referrers you have, the more referrals you get. From here, you will be able to reap all the benefits of referral marketing that is highlighted in this article.