How to acquire new customers through referral marketingby John Goliats
Referral marketing has been around since ancient times and survey after survey confirms what everyone already knows. Your best and most satisfied customers are your most effective marketing channel, but few companies take advantage of this opportunity. Why is that? Well, the simple answer is most companies lack a strategy, tools and a process to work effectively with referral marketing.
Your best customers - an untapped gold mine
According to Mckinsey, word of mouth / recommendations from friends affect up to 50% of all purchasing decisions and the customers who are most satisfied are also the ones who are most willing to recommend and spread your brand. Many companies do not know who their best customers are and those who actually measure the customer experience do not do so continuously, but only occasionally. Continuously measuring your customers' buying experience provides important insights on how your customer relationship develops over time and will also provide you with feedback on negative customer experiences. This will give you the opportunity to take action before the customer leaves or spreads badwill about your brand.
There is a saying that goes "if a customer gives negative feedback, you can expect that there are at least 100 more who think the same way but you won’t hear from them". In other words, it is very valuable and important to be attentive and take care of customers who have had a negative experience. The customers you give a positive experience you should isolate as a target group and give incentives to recommend your product or service. This way, you can both take care of dissatisfied customers and turn them into satisfied ones, while at the same time harnessing the opportunities and strength of referral marketing to build your brand awareness and drive growth through your most satisfied customers.
Make sure to spread your offer and your customers' positive reviews
Many companies are aware of the strength of referral marketing but lack a strategy and a plan to incorporate it into their marketing plan. You make an offer or recruit a friend campaigns but they do not work actively with the offers to maximize the effect. This is counterproductive and you miss a great opportunity to acquire new customers. When generating general offers, they are often communicated in different advertising campaigns, why not do it with the recommendation campaigns? Another important factor and often untapped opportunity are customer reviews. Over 80% say they read reviews before making a purchase decision online. Make sure to give the customers who have a positive experience an opportunity to write a review that you then publish on your website, in social media, etc. This builds trust for your brand and reviews are a very important part of the customer's buying decision.
It's not difficult - this is how you do it!
Working actively with referral marketing is not difficult and time-consuming. This is how you do it:
- Get tools that allow you to measure your customers' experience continuously and preferably on multiple devices so that you can communicate with your customers on their terms.
- Make sure that you can isolate and communicate with the customers you give a good customer experience. These customers are most willing to tell their friends and acquaintances about your product or service. Don't forget to reward your customers who recommend and ask them to write reviews!
- Make referral marketing a natural part of your marketing mix and a learning process. This way you can constantly learn what your customers experience and demand and at the same time effectively work with referral marketing over time.
Ready for more? Read our complete guide on how to turn your customers into promoters.