In the past, marketing was mostly word of mouth based, but in fact, things aren’t that different today. Consumers are much more likely to choose a brand if it’s been recommended by someone they trust and this is why a referral campaign could be very beneficial to your business. It not only allows you to widen your reach but also increases the lifetime value of existing customers. By offering your customers an incentive, such as a discount or voucher, they’ll promote your brand for you. It’s a win-win scenario. Here’s how referral marketing can benefit your business.
Builds brand trust
Referrals, reviews, and recommendations are all essential for building brand trust. Consumers will often research a brand before investing and will likely look online or ask their friends. Social media is also a popular choice and this is why many businesses get their products endorsed by a trusted influencer. If you want to boost your reputation as a business you need to get other people to recommend your brand as well as focusing on other marketing channels.
Encourages word of mouth
Referral campaigns encourage word of mouth marketing. This is where social media comes in handy as it’s a great place to start up conversations about your latest products or services. You could offer an incentive to loyal followers to share your posts. This way you can spread the news about your latest launches and offers and generate more organic leads. Post a call-to-action on social media to encourage your followers to take part.
Targets the right audience
If you want to reach out to a profitable niche you need to target your marketing strategies. Referrals are a good way to do this. It’s likely that a previous customer will refer your brand to someone in the same demographic, or at the very least who they believe will be interested in your product or services. These recommendations will be more likely to turn into leads. Referral marketing is targeted in this way and you’ll be reaching out to a potentially more profitable audience.
Improves customer retention
As well as reaching out to new customers, referral marketing also helps you retain your existing ones. If you would like to learn how to increase customer lifetime value, you need to offer them an incentive to stay loyal to your brand. Referral marketing helps to reinforce brand loyalty because not only are you offering a discount or freebie to your existing customers, you’re also encouraging enthusiastic conversation about your products.
One of the best things about referral marketing is that it’s a cost-effective solution. It may take time and effort on your part at first but soon your customers will be working for you. All you need to do is put together an email marketing campaign or post about your referral scheme on social media, for example. If you’re looking to cut costs in your marketing, it’s one of the cheaper options. Start spreading word of mouth about your brand today.