A referral is one of the most trusted ways to get your business in front of potential customers. When a potential customer hears about your brand from a friend, they are more likely to make a purchase because they heard about you from a trusted source.
Marketing strategies have abruptly switched over the past 6 weeks due to the pandemic and things that worked in the past are not currently working. Having a referral program that is easy to implement becomes crucial to increase your sales and sustain your business growth.
What’s a referral program?
A referral program is the process in which you reward current customers for recommending your business to friends and family.
Referrals are usually made by customers who really love your product or service and they are willing to make recommendations for free. Even though, referrals happen naturally, it will increase your CLV (customer lifetime value) if you add an incentive.
That’s when referral programs come in play. They give your happy customer an extra boost to make more referrals.
We’ve compiled 7 reasons why your business should incorporate a referral program in your marketing strategy.
- It builds brand trust
According to a study done by Nielsen, 92% of consumers from various market sectors, are inclined to trust a recommendation from people they trust more than paid advertising like digital ads. Millenials are more inclined to make a purchase whenever they are referred by someone in their inner circle.
- Your customers will come back for more
Having a referral program set in place will increase your overall numbers of repeated customers and transform them into loyal customers, once they feel appreciated. Customers will feel a part of your company and that they are contributing to your company’s success.
- Increase your customer engagement
When a customer is referred to your business by their inner circle they will use social media and websites to interact and learn more about your products or services.
Not to mention they might even retweet or reshare relevant content they find on your social media accounts. Some referral programs will also allow you to communicate through live chat with referred customers.
- Increase your marketing ROI
Discounts, gifts or money back are a small price to pay for new loyal customers. Also the cost of digital advertising is rising x5 faster than inflation and some PPC campaigns have smaller margins.
- It is simple to implement
Referral programs are easy to implement and don’t require a lot of time and money. The key is to choose a referral program that will automatically allow you to track referrals.
- Helps identify your loyal customers
Customers always enjoy being appreciated by their favorite brands. With referral programs you can identify your loyal customers and engage with them by sending them exclusive offers, rewards and even social media mentions.
- It is social media friendly
Many B2C businesses thrive by social media, and referral marketing fits right in on this experience as well. Since most referral software offers easy social sharing buttons, it makes it incredibly simple for online stores to automate and track referrals.
When your customer’s social audience sees them sharing your business, they will feel more inclined to check out who you are. This simple action adds to your credibility.