According to the New York Times, 65% of all new business comes from referrals. That means on average, two-thirds of consumers make purchases because someone they know recommended a particular product or service.
It's a powerful marketing channel because people trust the opinions of other people in their lives and people they respect, whether that be family, friends, social media influencers or big stars.
Let’s look at three fundamental reasons why referral marketing is so powerful and gives a new direction to Advanced Marketing. Some examples of extremely successful referral campaigns, and provide you with seven tactical steps to build a powerful referral marketing engine for your business.
Why Is Referral Marketing So Powerful?
- Precision Targeting
Referral and word-of-mouth marketing tend to be much more targeted because people tend to know their friends and social audiences pretty well. This allows your brand message to spread more effectively than with most other marketing channels.
- Trust Factor
A product / service seeker who is on his way to explore a new brand would certainly consider Word of mouth to learn experiences from a person who has had prior experiences of this brand’s products or services..
Time and time again, studies have shown that people almost always trust these people's opinions over generic advertisements and sales pitches carefully crafted by the brand themselves.
- Reach and Acceleration
Travel and Tourism for a particular city/ spot should surely be advertised, detailing all possible fun experiences a traveler can explore in the very city. With some discount/ special offers for family or a bunch of friends would only accelerate your tour packages better than that of others. This model can be further implemented for other businesses like food outlet, movie show, fashion stores, cosmetics and jewellery products, etc.
How Do You Use And Implement Referral Marketing?
- Provide Exceptional Customer Service and Buying Experience
Exceptional Customer Service and Tasty Healthy Meals can invite a lot of new hearts of passionate foodies.
- Pay Attention To Your Analytics
You’re probably already getting referrals and don’t even know it. Google Analytics has a whole section on referrals that can help you pinpoint other sites that are linking and referring people to you. This report can be can be broken down to not just visitors but customers as well, giving you a deep understanding of which of the referring websites is the most qualified.
With this knowledge, you can reach out to those sites and work out a plan to acquire even more traffic.
For example, you may work out:
Additional mentions in upcoming posts
Guest blog post
Referral program to share profit with them
- Make Your Products and Product Experience Sharable
- Make It Easy For Visitors And Customers To Refer Your Brand
How easy has it become to share news of your food experiences through Facebook and other such social media channels. Adding a blogging section or Facebook share buttons would get name of your website on thousands of timelines of passionate food explorers.
- Implement a Referral Program
Sometimes people need a nudge. Providing rewards for referrals can be just the thing to get your visitors and customers sharing your brand with their friends and family. Referral Programs which promise to reward with goodies like Cashback, Movie Tickets, Discounts Coupon, etc proving to be working pretty well in world of Online Marketing these days.
- Reviews Are Referrals Too
People trust what other customers say about your company more than what you say about yourself.
- Capitalize on Influencers
Influencers within your niche can be a goldmine of referral traffic and sales. The key is to find influencers who's following is close as possible to your target market.
All the above points can be incorporated and amalgamated together to give your customers an easy way to refer about your services to more friends and customers.