Referrals marketing is a method of promoting products or services to new customers through referrals, usually by word of mouth. Such referrals often occur spontaneously but business can influence this through appropriate strategies.
Video Referral marketing
Overview
Referral marketing is the process of encouraging and increasing referrals significantly by word of mouth, perhaps the longest and most reliable marketing strategy. This can be achieved by encouraging and rewarding customers, and various other contacts, to recommend products and services from B2B consumers and brands, both online and offline.
Online referral marketing is an Internet-based approach, or Software as a Service (SaaS), to traditional referral marketing. By tracking customer behavior online through the use of web browser cookies and similar technologies, online referral marketing can potentially increase brand awareness, referrals and, ultimately, revenue. Many platforms allow organizations to view returns on reference marketing on investment (ROI), and to optimize their campaigns to improve results. Many of the latest systems provide users with the same experience either on desktop or mobile devices. Offline referral marketers sometimes use traceable business cards. Trackable business cards typically contain QR code that links it to online content for sale while providing a way to track that sale back to the person whose card was scanned.
Online referral marketing focuses on interactions between customers. The Internet is a common channel for referral-based marketing. It provides an abundant outlet for customers to share their opinions, product favorites, and experiences, including their own corporate website and through social media such as LinkedIn, Facebook, Twitter and Google.Marketing can encourage referrers by providing pre-prepared messages.. Advocates can provide their family members and friends with personalized links including unique referral codes and advertising information via email, blogs and instant messaging. Companies can reward supporters when family members and their friends buy through links.
This same technology also helps companies create systems that integrate referrals into marketing plans. By tracking user traffic, companies can offer referrals to other online customers.
Maps Referral marketing
Benefits of the referral program
A study conducted by Goethe University Frankfurt and the University of Pennsylvania on referral programs and customer value following a customer reference program from a German bank paying 25 euro customers to bring in new customers, was released in July 2010. According to Professor Van den Bulte, this is the first study published on the financial evaluation of customer referral programs. The study found that referenced customers are more profitable and loyal than normal customers. Selected customers have higher contribution margins, higher retention rates and are more valuable in both the short and long term.
As to whether the customer referral program is worth the cost, the study says that the program notes "the difference in positive value, both in the short and long term, between customers obtained through referral programs and other customers. that, the referral program can indeed produce results. "
There are two types of awards given by the referral program.
In one option, the customer is currently given an incentive. Reference gifts may be in different forms, such as cash, prizes, discounts, shopping vouchers, or redeemable points. For example, cell phone operators give customers one-time gift subscribers and add long-term savings depending on their usage. Operators also offer lower rates for customer interaction rather than interaction with noncustomers.
The second program is where referrers benefit from existing customers by increasing their visibility or recognition as specialists or by special treatment, especially if the customer becomes a corporate partner.
Benefits
Referral-based customers are more suitable. Customers in question tend to interact with people who are similar to them.
Existing customers know the marketing objectives and understand the needs of potential clients. Steering can measure matches between both and well-matched customers can help companies earn more at lower cost.
Customer value and contribution earned through referral campaigns is higher than non-referral customers.
Referral program is a good method to determine consumer satisfaction. If comparatively few consumers are willing to act as referrers, corporate customer satisfaction may be low.
Referral programs help companies establish long-term relationships with customers. Companies can match motivation with consumer expectations and improve the effectiveness of market programs. The referral rewards program can also be considered as a tool to retain current customers.
Disadvantages
Referral programs can be abused by opportunists. They can recommend unsuitable products to others to get referral fees. The financial motivations of the referring customers can jeopardize the sincerity of their recommendations.
To identify referrers and track purchases by consumers referred to in social media, referral programs rely heavily on databases. Proper targeted advertising and email campaigns based on databases help companies classify customers and improve referral rates.
See also
- Customer knowledge
- Content marketing
References
Source of the article : Wikipedia
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