A Guide to Referral Marketing Strategies
What is Referral Marketing?
Referral Marketing, also known as word of mouth marketing, is the method of advertising a brand’s products or services to new customers through referrals. According to the Word of Mouth Marketing Association, there are about 2.4 billion brand-related conversations occurring every day in the U.S., meaning that there is a plethora of opportunity to get your brand mentioned Typically, these referrals come from past customers that have had a positive experience with a brand and want to help promote that brand. Oftentimes, these referrals come naturally or are spontaneous but there are ways that brands can influence referrals through different strategies.
What are the Benefits of Referral Marketing?
There are many benefits that come from referral marketing. Although typical marketing efforts are also beneficial to gaining new customers, positive referrals bring a whole new level of intimacy to potential customers. People value other customers’ experiences and are more likely to trust someone else’s positive experiences before making a purchase. Additional benefits include:
Expanding Your Target Reach
A major goal for most marketers is to find qualified leads. With referral marketing, a person will refer your brand to someone who they truly believe will benefit from whatever service or product you’re offering. Those that are actually interested will seek out your brand and make purchase decisions. Therefore, expanding your target market and providing your brand a qualified lead by a trusted source.
Increasing Loyal Customers
Referral marketing is a great way to increase trust between your customers and your brand. Customers are already looking for evidence that your brand is trustworthy through online reviews and testimonials before they even consider making purchase decisions. Because of this, referrals are a great way to prove that your brand is reliable. After all, there’s no one better to convince your customers that they should buy your products than their own peers.
Cost Effective Marketing Approach
Unlike other traditional marketing efforts, referral marketing can actually be one of the most cost-effective marketing strategies. After all, it’s much less expensive to market to your existing customers than it is to new ones. Additionally, peer referrals are much more effective and persuasive than any paid marketing advertisements.
Tips for Creating a Referral Marketing Strategy
In order to start reaping the benefits of referral marketing, you must start thinking about how to create a referral marketing strategy that adds value to your existing customer base as well as to your own brand. Here are some tips to add into your marketing strategy:
Create Customer Brand Relationships
Your existing customers will only refer your brand to their peers if they are satisfied with their customer experience. Therefore, taking the time to create valuable and trusting relationships with your customers is a fundamental first step in creating a referral marketing strategy.
Create Customer Loyalty Programs
When customers feel like their business is of value, they are more likely to refer your brand to potential new customers. Creating an effective customer loyalty program that rewards your customers every time they shop with you is an excellent way to create value. Not only will this incentivize your existing customers to keep shopping with you, but also incentivize new customers to join your program and refer it to their peers.
Value Customer Feedback
Allowing customers to voice their concerns will not only benefit your brand, but your customers as well. By collecting feedback, customers will feel their opinions and concerns are valid and valued. Acting like you care about your customers will help retain existing customers as well as increase potential referrals.
If you’re looking to add referral marketing into your existing marketing strategies, don’t hesitate to reach out to the digital strategists at Kraus Marketing! Contact us today to get started!