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Getting people to give your business a referral is one of the best ways to increase awareness and boost revenue. Like any marketing effort, you’ll want to make sure your referral marketing strategy is sound before investing resources. Here, we’ll present four pitfalls to avoid before launching your referral marketing program.
All too often, marketers view brand loyalty as something that occurs after customer acquisition. However, as Howard Schultz, CEO of Starbucks astutely points out, “If people believe they share values with a company, they will stay loyal to the brand.” And referral marketing programs have been shown to foster brand loyalty long before prospects convert into paying customers. Encouraging brand loyalty through word-of-mouth marketing, before prospects convert, can result in a lower customer acquisition cost. Curious? Here’s how:
Social media is all about creating a community around the brand you’ve worked so hard to build. It’s where your greatest advocates reside and where you can find many of your most loyal customers. Referral marketing is all about tapping into those consumers that are willing to recommend your company. Whether it’s Twitter, Facebook, LinkedIn, Pinterest, Instagram or your email list, having a strong social media presence will give you a sense of where to find brand ambassadors that are willing to help you grow your business.
If you take a look at the personalities that big brands are scouting to become brand ambassadors, the lineup starts to look a lot like the red carpet for last night’s 88th Academy Awards. Think Chris Hemsworth for TAG Heuer, Rihanna for Puma, Chiara Ferragni (of The Blonde Salad fame) for Pantene, and Drake for the Toronto Raptors. These well-known names and faces have a ready army of fans and have achieved a high-level status across several social circles. Companies are starting to leverage brand ambassadors to further their influencer marketing efforts in order to reach new people in more ways than a quality product or service could on its own.
As a company built by referral marketing experts, we know how important it is for brands to reward loyal customers and generate new leads and revenue.
We’ve discovered time and time again how beneficial referral marketing is for our business. Of course, as a referral marketing company, we use our very own flexible solution to manage and optimize our referral campaigns. And what kind of transparent brand would we be if we didn’t give you an inside look at our success?
In the referral marketing world, there seems to be a debate brewing over the most effective way to identify, enroll, and engage ambassadors.
In one corner is the belief that carefully enrolling only your most loyal and passionate ambassadors is the best approach. The thinking here is that those people, who already love and support your brand, will happily and aggressively work to generate referrals and new business for your company.
If you polled a group of CMOs and asked them to name their favorite lead types, you’d probably hear a common refrain: Referrals.
Anecdotally, it makes sense, but research backs up the value of referrals, too. Numerous studies have shown that referred customers close faster and stay longer. Meanwhile, research from the University of Pennsylvania suggests referred customers also buy 16% more than their non-referred counterparts.
When you think about the future of marketing, what do you see?
Completely automated workflows and campaigns? Predictive analytics that help us actually achieve the Holy Grail of marketing (right message, for the right customer, at exactly the right time)? Technology stacks that intuitively and seamlessly connect with each other to deliver dynamic insight?
All of those things might come to fruition (some are already here). Or they might not. As most of us know from experience, predictions are unpredictable — just ask former Microsoft CEO Steve Balmer. That said, prognostication is still a worthwhile exercise because it helps us reflect on the past, envision the future, and test new ideas that allow us to get ahead of the pack.
My first taste of an affiliate marketing program came with law school and online poker. While not the most common cocktail when it comes to word-of-mouth marketing strategies, I saw the network effect firsthand. I was referring friends to play poker online and making a small amount in affiliate fees. As I continued to share my affiliate links, that small amount doubled, tripled, and eventually grew to be enough to pay off my law school loans, shift my career path, and kick off my journey as an entrepreneur.
