Referral marketing is commonly referred to as ‘word of mouth marketing’. In the past this meant getting happy clients/customers to write a few words endorsing your product or service, which could then be used in marketing material. But nowadays there are many more ways to ‘reach out’ to clients and ask them to recommend your product or service.
While the methods may have changed, it’s still widely recognised that referral marketing is still one of the best forms of marketing when it comes to conversions and sales. This comes down to three simple reasons:
Unlike other forms of advertising, from traditional media to Google Adwords or Facebook ads, with referral marketing you don’t see your marketing spend disappearing before your eyes. This is not always the fault of the media — often the advertising message is not targeted at the correct audience, or it’s delivered at the wrong time. And usually it’s competing with other advertising messages.
With referral marketing your message is more targeted. It could be a response to a query or it could be the background chatter on Social Media. Either way the message is delivered or endorsed by ‘real people’, either friends that are personally known or people on social networks. Either way, the message is seen as a reflection of a real-life experience that people are happy to talk about.
The Trust Factor:
Trust is an important factor when convincing somebody to spend their hard-earned money on a product or service. If an advertising or marketing message is coming over conventional media, it’s often seen as ‘impersonal’. It’s a similar situation when you’re confronted by a cold-calling telemarketer reading from a script, or a high-pressure salesperson on commission. Even though you might be interested in the product or service on offer, you have real doubts about how genuine the person delivering the message.
In the case of referral marketing, however, the ‘sales pitch’ is coming from someone you know personally (family or friends) or it’s coming from a source that you trust, such as a blogger or celebrity that you follow. It can also include ‘consumer opinions’ (again, from ‘real’ people) and editorial content (which is seen as impartial and objective). In fact, it’s been proven time and time again that people almost always trust this form of endorsement over advertising and marketing material and sales pitches that have been carefully crafted by the brands themselves.
It wasn’t that long ago that the ‘reach’ and influence of typical consumers was limited to the people that they had interactions with from day to day. But now, with the advent of social media, most consumers have a much larger reach, and in the case of people with strong social followings, their ‘reach’ can be enormous. The result is that consumers can make or break your business, depending on what is said online.
A simple Facebook or Instagram post, or a Tweet, has the potential to reach hundreds, if not thousands of ‘real people’, who’s opinions are seen as genuine and trustworthy, in a very short timeframe. This ‘social reach’ explains why referral marketing has become so important.
So how do you go about implementing a Referral Marketing strategy?
- Provide an exceptional customer experience:
Under-promise and over-deliver. Be timely in your responses and interactions with customers and clients. Be proactive and anticipate customer needs. Be innovative and cutting-edge. Know your business, your industry and your markets and respond accordingly.
- Make your product or service share-worthy:
Create a ‘wow’ factor for your customers. If you’re selling a product this could be through the packaging, presentation and delivery. If you’re promoting a service, this could be through valuable information (such as ‘white paper’ documents, tutorials or articles). It could even be through entertaining on-line media or competitions. Consider different deliver methods or A/B testing to see which methods are more ‘sharable’.
- Keep your brand first and foremost:
Ideally your referral marketing message is going to be spread far and wide. Make sure that it’s clearly branded and your company is recognised as the original source of the material. Ensure it can’t be re-purposed or re-branded without your permission.
- Start a Referral Programme:
Customers might have the best intentions about recommending your product or service. People like to be able to offer friends a solution to their problems or are along too ready to talk about their experiences, good or bad. But sometimes they need a bit of a push to encourage them to take action. Consider ways that you can ‘incentivise’ people to refer your products or services. For every referral they might get a discount the next time they buy from you. Maybe they get a voucher that they can use elsewhere or ‘loyalty points’. If you’re running a competition on social media they might get extra entries if they share your competition post.
- Get an ‘Influencer’ to endorse your company:
‘Influencers’ within your industry can be a goldmine for referrals. These are people that are respected in their field and have large followings on Social Media. ‘Reach out’ to these people and ask if they would like to review your product or service, or create a sponsored post on their social media channels (this usually incurs a small cost). The more ‘natural’ (i.e. less ‘advertisey’) the post, the better the result!
- Don’t forget Reviews:
People will always trust what others say about your product or service more than anything you might say! Make it easy for them to post reviews on your website or social media channels. In the event of any bad reviews, act quickly to resolve the problem. In the immortal words of homeware marketer Alan Martin, “it’s the putting right that counts”!
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