“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral is a holy grail of advertising.” – Mark Zuckerberg
Remember when you last visited a nearby restaurant, which was very good in terms of food, services etc. Now whenever you come across your friends, who are searching for a good food place, you will suggest the restaurant you’ve visited recently.
This is what we call reference and this builds the concept of referral marketing, not only in restaurant’s case but in almost every business type.
This is not a new concept as it is running from ages; one may get the idea from the example I’ve mentioned above.
Referral marketing is thus defined as a process where a person aware of a good service will refer the same to his/her friends, family, colleague etc. This is sometimes due to goodwill and sometimes due to some benefit the referee is gaining from this strategy.
This new online era has witnessed many new entrepreneurs coming out in market with their new and unique ideas. The main challenge faced at the initial stage is how to
Get new customers
Retain these customers and
Grow the number continuously.
Every new business startup faces a challenge of new idea with limited budget and hence they need a proper strategy to overcome all the obstacles and generate a ROI.
It is quite obvious that when a new venture is started, promotional activities run on a high. Incorporating the referral marketing in your promotions will help one gain more customers.
Affiliate marketing is solely an incentive based method where the affiliate being in traffic through their own efforts and company pays them according to the incentives prepared. Referral marketing is simply the reference made by current customers in his network and it may not always involve the benefits in terms of money or currency.
No direct benefit
Forward to friend
Invite the friend
Users may earn points, which may later be redeemed to earn some product of use.
Easy way to get large number of customers
This is a kind of “Viral Loop”
Keep it simple to involve more and more users in this program.
Most common and widely accepted out of all the categories
Involves the benefit of referrer and referee both which grows the chain easily
Grows customer database easily
This involves the usage of social media platforms like Facebook, Twitter etc.
Millions of people can be approached easily in one go through this method
Involved gaining subscription for a month for both referrer and referee
Involves a team to approach users
Involves direct monetary benefits as per the slabs generated
Bring in the customers to buy a product and get certain percentile on the amount paid by the customer
Needs a proper strategy to avoid any confusions in future and to maintain goodwill
Requires a online system for proper management of payment options without any clashes
Referral marketing is not a short-term offer; it should carry a far-sighted approach to provide ling-term benefits to those who associate with the plan. For referral marketing to be successful a full-fledged team is required who will focus solely on this project from the sign-up till the incentives are fulfilled.
Aim at your goal and make a plan to follow step-by-step, each step must be clear enough to process, let your referrer’s grow with you by optimizing your referral slabs time to time
Make your referrer’s feel connected and part of your team. Send them regular mails, solve their queries on priority, energize them to make your marketing a success
Guide your referrer’s properly so that they are ready enough to face any kind of urgent troubleshooting, this way they may handle their own referrals easily without any time wastage
For developing a lifetime connection, try to build new plans and offers for your loyalists.
Also Read: Word-of-Mouth and Referral Marketing Blog
Referral marketing is an easy and quick way to develop your brand value through a long hierarchy of referrals. This is one of the easy and quick way to not only join more customers but also build ROI.
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