It’s no accident the words tweet and like have been coined as action verbs in recent years. You don’t need to be a social statistic analyst to know that Millennials thrive on the approval of their peers. We live in a ”tell a friend” culture. How to make that work for your business is what referral programs are all about.
Word of mouth has always proven to be the pillar of successful marketing. A strategy based on rewarding those who tout your brand or service has measurable growth value in any field. Today we will talk about what makes a successful referral program, and how to implement this crucial marketing tool.
No one wakes up in the morning and says ”Today I want to be mediocre.” Whether You’re just getting your startup off the ground or run a centuries-old family business, you work hard for your customer approval. Surprising customer behavior observation shows that while satisfied customers are willing to make referrals, very few do. Incorporating a systematic process with reward incentives make it less daunting. Plus, with a system in place, you can seamlessly automate the payout of rewards while tracking program performance.
Does it shock you to know that people are twice as likely to make a purchase when a friend lets them in on a new service or product? We all like to follow up and check out the latest about what our peers say. Shared interests and insider knowledge creates a natural platform for brand promotion. Customers that check out a product through friends will have higher brand loyalty and enthusiasm that translates directly into profit margins. It also increases the customer loyalty of your existing customers, by having them invest more your in your brand.
Let’s go over some of the statistics for powerful Referral Marketing that prove just how surprising the ROI data is.
In a Nielsen survey on trust and advertising, the numbers tell the story. When polled about what form of advertising responders trusted, Referral marketing scored the highest across the board in every demographic category. It out did every form of advertising, editorial content, and brand sponsorship:
Now that we have a better picture about the stats that propel brand trust we can delve a little deeper. Did you know that 28% of millennials say they wouldn’t try a product if their friends don’t approve of it? A “tell a friend” plan that doesn’t convert is no use at all. You don’t need your name spread around if no one is buying!
Word of mouth is the primary factor behind 20-50% of purchasing decisions.B2B initiatives that incorporate referrals have a 70% higher conversion rate, and a reported 69% faster close time on sales. That seal of approval combines with the one-two punch of a reward. The goal is to set up a positive feedback loop that continually gathers more customers in its ripple effect. Referred customers are 5x more likely to involve other customers. These are the telling numbers that explain themselves as the focus of your game plan.
Its an understood facet of human nature. Everyone enjoys being appreciated. Show thanks for your clients’ trust with tangible rewards. It is a gift that will pay you back in spades.
If you’re ready to create a referral program for your customers, but you are looking for more guidance, contact us today. We’d love to hear from you!