Referral marketing is the act of using word of mouth, testimonies, and recommendations from existing customers to attract more customers. According to Jim Rohn “One customer, well taken care of, could be more valuable than $10,000 worth of advertising.” This implies that an efficient customer relationship can improve the business’s sales and attract more customers.
Encouraging your customers to share reviews about your product among friends and on your website is one of the ways to improve your marketing. However, it is important to note before a customer would share positive remarks about your product, some level of satisfactions must have been derived. With referral marketing, you convert your existing customers into brand advocates.
Let’s play a short game.
You want to get a product, and fortunately, you know one or two people who have used the product. But each said you should keep your money. While deliberating on this, you came across a compelling sales letter about it. It persuades and nudges you to go ahead and buy. Whose testimony would you believe?
Every day, thousands of people share reviews of products they use with friends, family, colleagues, and partners. This simple act can create the desire to buy or not in the listener’s mind. We are more influenced by customer reviews, recommendations, testimonies, and posts than by the business brand or sales letter. This is why referral marketing remains an effective marketing tactic.
Importance of referral marketing
- The effectiveness of referral marketing lies in the fact that the reviews come from people who have patronized the business and can attest to its effectiveness.
- Customers acquired through word of mouth also do the same should your product or service meet their expectations.
- 92% of consumers trust referrals from people they know – Nielsen
- People are 4 times more likely to buy when referred by a friend – Nielsen
- 77% of consumers are more likely to buy a new product when learning about it from friends or family. – Nielsen
- Customers acquired through word of mouth also tend to return because they trust your brand.
- Word of mouth is one of the guaranteed ways to earn a customer’s trust.
- Referral marketing is one of the cheapest advertising methods. It is cost-effective and powerful.
- Reviews are game changers. They measure the effectiveness (or ineffectiveness) of a product and reveal more about it to potential customers. Constant positive reviews can skyrocket a business’s sales and lead generation.
As an ideal and effective customer acquisition and retention tactic, it is safe to say that businesses stand a high chance to grow when referral marketing is well-implemented. One of the ways to achieve this is to leverage on social media. Platforms such as Kominiti gives business owners the chance to not only compete in the global marketplace but also get reviews from customers and clients. The business owner can share these reviews on social space and encourage the customers to do the same.
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