As one of the booming and flourishing branches of Internet marketing, referral marketing is fast becoming one of the most trusted and effective ways to generate leads. Referral marketing is all about referring new customers to buy or use a particular product. This is achieved either by hiring ad hoc executives or getting referrals from existing customer base. Referral marketing is also considered as a type of word-of-mouth of marketing. Existing customers who are satisfied using certain products refer that product to their friends and relatives, which inevitably aids lead generation. This marketing method has proven to be massively successful with developing enterprises and businesses.
It basically works on marketing strategies based on giving recommendations and suggestions to people and acquaintances in your group. The potential of referral marketing is open to all businesses and can be exploited by all types of businesses. For businesses that can tap the potential of this strategy can enjoy the benefits of having a loyal customer base and lead generating referral base. In a business world where loyalty and quality is hard to find, referral marketing is fast gaining pace to become reliable lead generating marketing strategy.
Referral marketing can happen between two customers, between two companies, and between a company and a customer. As a token of appreciation for a successful referral, business owners tend to give incentives, discounts, and cashbacks. This encourages the referrer to market the product more actively within his/her acquaintances. There are numerous advantages of using referral marketing as part of your marketing campaign.
- This marketing strategy helps reduce sales related expenses. So, from henceforth you can avoid calling stale customers, and start focusing more on catering the needs of your existing customers, which indirectly helps attract new prospective customers.
- Having base of referrals will help businesses build a tier of gratified customers, which consequently helps you generate sales leads and get new prospective customers.
- Referrals will help in growing sales revenues with an inflow of sales leads and constant sales cycles. In accordance to a report, the closing ratio of referred leads is close to 60% when compared to the closing ratio of unqualified leads, which stands at 10%.
- Referrals are ready to share knowledge about a product and its benefits, which triggers a conversation and prevents false promotions. Referrals also provide contact details of prospective customers spread across a region or area.
- Referral marketing helps businesses minimizes the millions of dollars spent on advertising and promotions done on mass media and on the Internet, especially in times of economic meltdowns and financial crisis.
- It helps small and medium sized businesses build customer networks and interact with prospective customers.
- Referrals are like unpaid executives of the company, so treat with them equal respect and care which an employee of your company demands. Give away goodies and seasonal greetings to referrals to keep them happy and engaged in their role of attracting new customers.
- With referral marketing you can consider existing as well as cancelled clients as your referral sources. The clients attracted through referral marketing have two notable attributes: one is the total revenue amount they directly generate, and two, total revenue generated from the clients they refer.
Referral marketing does not require a business to be a multi-national or global, all that is required is a cluster of loyal and satisfied customers who will help you build your business from scratch using word-of-mouth marketing strategies. So, having a strong referral marketing system is an essential platform on which your business can grow and be profitable.
This is a guest post by Samantha Kirk of mytechhelp.com, a site that offers savings and current information on Toshiba Support.
