The Benefits of Referral Marketing
“Refer a friend and go into the draw to win…”
Referral Marketing makes the use of word-of-mouth and recommendations to grow a business. Simply put, Referral Marketing is getting your VIPs to spread the word about your brand. A great Referral Marketing process starts from prospects to customers, to brand advocates.
#HotFacts:
Customers that are acquired through word-of-mouth spend 2x more and make 2x as many referrals themselves
Referred leads convert 30% better and have a 16% higher lifetime value than other channels
Word-of-mouth drives at least 5x more sales than a paid impression
Most customers would pick word-of-mouth if they were to select one way of getting information on potential purchases
*via Contagious by Jonah Berger (online) - shout-out to my old boss for letting me keep his copy.
‘Contagious’ - what makes word-of-mouth valuable:
We share stories, not information (stories)
We share things that have value to others (practical value)
We imitate what we see people around us doing (public)
We share what we care about (emotions)
We share what is on the top of our minds (triggers)
We share what makes us look good (social currency)
Referral Marketing
Referral Marketing provides you valuable competitive advantage because of the influencers credibility. When channelled properly having a Referral Marketing tactic can stand you out from the rest. Remember, numbers don’t lie; if successful there would be a definite increase in leads.
APPEAL TO THEIR EMOTIONS
Customers have causes they believe in. Whether environmental, social or political, consumers have strong emotions about things they believe to be valuable.
Add an offer that supports a cause that you know your audience cares about (you will know this by market research on your target market).
Example: Provide a way for your customers to support a cause and ask them to share the love. If you can add a way to donate or receive a free gift on the purchase path it will promote shareability. If consumers are able to get discounts, support a great cause or receive a gift they are more likely to share your brand.
#HotTip: If you will provide an offer, keep it time-sensitive or change the offer every quarter to keep things fresh.
APPEAL TO THEIR COMMUNITY
Herd mentality is a very real phenomenon. People are influenced by their peers and this is especially evident in marketing. We as humans are easily influenced by our surrounding.
Provide an incentive to their community. If you are in an industry where your target demographic is younger or not as financially stable, providing a monetary incentive will benefit them.
Example: Customers get $5 for each referral and their friend gets $5 too. This provides a win-win situation for your prospects and keeps circulating the promotion incentive.
#HotTip: You can provide a tier system. The more referrals customers do the more incentive they receive. Make sure the T&Cs are visible so there is no confusion.
APPEAL TO THEIR STATUS
Everyone wants to feel special, seen, and influential.
The reason Influencer Marketing is so popular as a profession is reach and access. Influencers are able to make positive changes in people's lives. There is a level of power influencers have to promote and leverage their platforms.
Create a campaign where your customers can feel like influencers.
Example: create a micro-influence campaign where you highlight your VIPs or brand advocates (someone that has spent over X amount OR have been a customer for X amount of years). You can give away products or services to your VIPs to gift or share on their socials (provide caveats so you keep within your goals).
#HotTip: Provide a platform for sharing (a summary page or photo gallery) of people who have referred your product or service. If they have a promo code, product hack testimonial they can share it within your public referral program platform.
One last thing!
Your customers are your best salesperson! Don’t underestimate the power of the right customers. Make sure your referral process is easy for people to share and participate in. Your brand creates communities so use your community wisely for a win-win situation.