When it comes to referral marketing strategies, other than the obvious, what do online powerhouses and respected companies like Facebook, PayPal, eBay, Airbnb, Dropbox, Tesla, Uber and Amazon all have in common?
Well… They are super successful for one! But they’ve all got more new customers by adopting referral marketing strategies in their marketing plans… that’s what. Chances are that you yourself will have already seen these and may not even realize it.
If you still think that your business does not need to add a referral program to your marketing playbook, you better think again.
This is because the intelligent use of referral marketing in conjunction with your other marketing activities can effectively boost your sales results in a very short period of time.
And guess what? Contrary to common belief, such results can be obtained without even spending a king’s ransom… shocking right!
Unlike word of mouth marketing, however, for each new client acquired the referrer is granted cash or gift rewards for their successful referral.
Firstly, What Exactly Is Referral Marketing Then? And Why Is It So Darn Important?
Referral marketing involves tapping into your current customers, clients, employees and partners’ network of acquaintances to bring in new customers and revenue.
“You scratch my back, and I’ll scratch yours…”
Referral Marketing is statistically the best way improve your sales, generate quality leads, and boost your marketing ROI very quickly.
It wasn’t always this way…
Historically, referral marketing was very much an after-thought for most businesses which is why it had such a bad reputation. Afterall, something that is cobbled together last minute in haste with little to no planning or strategy was always destined to fail right?
It is only in recent years with the quantum leap forward in technology online that referral marketing has really come into its own. With buying habits of consumers and customers online in 2018 and into 2019 being heavily swayed by emotive and compulsive purchases, businesses have realized the value of working with their customers to gain more revenue.
Your current crop of customers understand their target market better because they are exactly what your business wants, your existing customers can engage potential customer more easily and spread the message about your brand more effectively without the barriers of being ‘sold to’.
This is especially true as it has been proven that leads obtained from referrals convert into sales four times (4x) better than other marketing methods.
Other key benefits of adopting a strong customer-centric referral marketing strategy include:
- Building a stronger more engaged client base, faster.
- Reaching a higher number of potential buyers that you probably won’t have access to initially.
- Increased credibility and trust with your audience through peer-to-peer engagement.
- Improved customer loyalty from trusted advisor referrals.
- Better retention rate, decreasing customer churn.
Let’s face facts here. Bringing in new consumers is generally more expensive than retaining your current customers.
The best customers are returning buyers. One fantastic way to keep current customers is to create rewarding referral programs for their benefit. Everybody loves a freebie!
It’s no surprise then, that as human beings, by nature we are sociable creatures. Hence, previously rewarded, loyal customers are much more likely to stay loyal to your company or brand for longer.
Referred Clients have a Higher Life Time Value (LTV)
Whenever a newly referred lead becomes a buying client, they do so because they have been given a good impression of your brand by someone they already know and trust. Not only do referral clients tend to be better customers for longer, but they also tend to spend more over time.
According to reliable data, customers referred by a friend, family member or work colleague to have 25% higher LTV than that of other customers.
Such clients who were acquired for next to nothing because your currently satisfied customers, tend to spread the word about your brand as well.
Referral Marketing Systems are far Cheaper To Build, Execute and Far More Measurable on your bottom line.
Unlike most traditional marketing solutions, a solid referral system is effectively far less expensive to create and maintain and yields a far greater return. More for less. Compared with many other channels, referral marketing is pound for pound the most cost-effective.
With a relatively low outlay to set up and a efficient campaign launch structure from a simple installation of your tool to your website, your brand can easily setup a program quickly and immediately begin generating referrals from your existing customer base.
Chances are that most of the channels that you have tried are very well represented online anyway. Email Marketing, Pay-Per-Click Advertising (PPC), Search Engine Optimization (SEO), Display Advertising, Social Media Marketing (SMM), Content Marketing, and Affiliate Marketing all have a fanfare and a loyal following with plenty of buzz.
However, this certainly doesn’t mean that Referral Marketing is not a contender in the mix, far from it! In fact, Referral Marketing is one of the most powerful ways to generate leads, revenue, brand awareness, traffic, clicks, impressions, and so many more winning results.
Down to the brass tax of R-O-Why?
“...yes, yes, Manuel, this is all great, thanks for the history lesson about Referral Marketing, but how and more importantly why should I consider spending a percentage of my marketing budget on this when I already throw exorbitant amounts of money on social media, search engine optimization, email marketing, and paid campaigns to generate new business anyway?”
Don’t worry, I hear what you’re saying. Marketing has almost been dissected into so many components nowadays, it’s hard to quantify your expenditure across so many channels. However, it goes without saying that for any machine to run smoothly, all the parts need to be involved.
With a well built and nurtured referral machine, your effective marketing cost can be easily measured since your marketing expenses are generated only when a brand new buying customer is brought in with a discount or offer of a free gift or trial of your products or services.
That’s why here at Maître we have developed a few helpful tools to help you get more from your Referral Programs, develop better strategies and design more engaging offers. We have designed an amazingly detailed guide just for you that explains how you can leverage more comprehensive referral campaigns that brings success.
For more information about the different types of referral programs check out our awesomely helpful guide: The Ultimate ‘How-To’ Referral Marketing Guide, our step-by-step guide to creating referral marketing campaigns that don’t suck.
Irrespective of whether offering a gift or cash incentive for referrals, you actually only pay per conversion so it’s win-win.
This means your customers promote your brand as much as possible, but you only pay for potential leads that end up buying your products.
Time is Money in the Referral World.
A great referral marketing tool should make it easy for you to set up in minutes.
The critical functions such as selecting an appropriate reward or gift earning point scheme can be made just once and left to run automatically. Leaving your business more time to focus on the important things.
The rest of the work is then performed by your customers whilst you get to relax and enjoy the collateral benefits.
Referral returns don’t just stop there either, in addition to any revenue you will receive from your program, having a solid program will enhance your brand awareness and boost your overall strategic marketing results.
From a pre-launch software tool referral program such as a startup tech company that has users referring friends and contacts for beta versions … to a post-launch referral program by an established brand looking to bolster their customer base with a raffle or a giveaway to get leads and boost brand awareness, we got you covered.
If you are considering creating your company’s own referral marketing strategy or you might well already be running one then you’re definitely in the right place!
The Strategic Possibilities Are Indeed Endless.
Maître have developed an awesome FREE tool just for you! So you can measure your potential return on investment from any referral program you like via the use of our brand new ROI calculator which we at Maitre coined as Referral Return Of Investment (RROI).
Maître’s RROI calculator tool can actually be used to help a specific business decide how to make use of a particular referral marketing strategy profitably.
Learn more about how our RROI Calculator Tool can help your business understand more about the costs involved and how these can be improved today.
Thanks for reading, and as always…