You have decided to buy an outstanding handbag for your much awaited birthday party. And there are so many options in front of you and suddenly your friend came to the rescue and suggests a brand its pros and cons and you decided to go for the brand which your friend suggested to you. Here is this scenario your friend is the referral to that particular brand and what she did was the referral marketing. And it will create a great impact on the sales of the company, lets us find out how.
Referral marketing is one type of marketing strategy which uses the existing customers to act as a marketing tool, where they will share their good experiences with our brand, share reviews and they genuinely recommend our brand products to some new customers. and there are very high chances that new customers to more likely to buy our brand product.
It is also known as the word-of-mouth strategy, but if we add some extra technical utilities to this strategy then it the referral marketing.
For example, our company gives deliberate offers for referrals to recommend our brand means it is called as referral marketing.
Compared to the other marketing strategies, referral marketing costs less and we have to offer some extra discounts for our existing to share a word about us. It has another benefit as well which is, we can able to retain the existing customers if we offer these kinds of customized offers for them. thus, it is a win-win situation for both of the involved parties.
According to the Wharton study reports the customers who have referred have shown 16% higher life time value. It means the person who has become referred customer is more likely to bring more revenue and sales to the company than some random customer.
For example, person A recommended our brand “Jack” to person B and Person B started buying our products and became a very good customer, now person B is likely to bring more sales to our company in the present and the future.
They can also save up lots of money for the business.
Referral marketing confirms to bring more conversion rate than the standard marketing tactics because customers are hearing all those good recommendations from their loved ones so they will totally believe it. Wont you guys buy the product your mom suggests?
We will at any cost even if it costs more than usual, so this is the power of referral marketing.
According to the McKinsey survey, 63% of the gen z people shared that the recommendations of friends and family members are the most trustable source when it comes to buying the product.
And if we gain that trust, then the growth in our sales is something unstoppable.
In addition to the word-of-mouth strategies and other incentive methodologies, we have to follow these types of strategies as well.
This helps us to attract many customers, we cannot leave everything in the hands of our customers, if we create attractive content then our customers can use our content to make their claims stronger.
This is something which helps us to reach the heart of our customers. Even if made any mistake in the quality of the product, good customer service can mask it up.
So, customer service acts as an aid to the referral marketing.
Thus, referral marketing is a gem to be cherished if we want to increase our sales, so surprise and excite your customer with your products and make them your referrals for your success.