Referral Marketing

Referral marketing

Referral marketing is a method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously but businesses can influence this through appropriate strategies.

Referral marketing is a structured and systematic process to maximize word of mouth potential. Referral marketing does this by encouraging, informing, promoting and rewarding customers and contacts to think and talk as much as possible about their supplier, their company, product and service and the value and benefit the supplier brings to them and people they know.
Referral marketing takes word of mouth from the spontaneous situation to one where maximum referrals are generated.
Online referral marketing, using digital marketing as a platform, is the internet based approach to traditional referral marketing. Given the advances in tracking customer behavior online through the use of web browser cookies, online referral marketing provides a high degree of tracking and accountability.
As mobile access to the internet becomes increasingly popular, offline referral marketing using trackable business cards are also becoming increasingly popular. Trackable business cards typically contain QR codes linking them to online content for sale while providing a way to track that sale back to the person whose card was scan

Benefits of referral programs

A study conducted by the Goethe University Frankfurt and the University of Pennsylvania, on referral programs and customer value which followed the customer referral program of a German bank that paid customers 25 euro for bringing in a new customer, was released in July 2010. According to Professor Van den Bulte, this is the first ever study published on the financial evaluation of customer referral programs. The study found that referred customers were both more profitable and loyal than normal customers. Referred customers had a higher contribution margin, a higher retention rate and were more valuable in both the short and long run.
On whether customer referral programs are worth the cost, the study says that it records “a positive value differential, both in the short term and long term, between customers acquired through a referral program and other customers. Importantly, this value differential is larger than the referral fee. Hence, referral programs can indeed pay off.”

Email Marketing

Email marketing is popular with companies for several reasons:

Email’s immediacy reduces delays in communication, allowing businesses to run more smoothly.
An exact return on investment can be tracked (“track to basket”) and has proven to be high when done properly. Email marketing is often reported as second only to search marketing as the most effective online marketing tactic.
Email Marketing is significantly cheaper and faster than traditional mail, mainly because of high cost and time required in a traditional mail campaign for producing the artwork, printing, addressing and mailing.
Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to receive email communications on subjects of interest to them.
Almost half of American Internet users check or send email on a typical day, with email blasts that are delivered between 1 am and 5 am local time outperforming those sent at other times in open and click rates.
Email is popular with digital marketers, rising an estimated 15% in 2009 to £292m in the UK.

Social Media

Social networking websites allow individuals to interact with one another and build relationships. When companies join the social channels, consumers can interact with them and they can communicate with consumers directly. That interaction feels more personal to users than traditional methods of strictly outbound marketing & advertising.
Social networking sites and blogs allow individual followers to “retweet” or “repost” comments made by the product being promoted. By repeating the message, all of the users connections are able to see the message, therefore reaching more people. Social networking sites act as word of mouth. Because the information about the product is being put out there and is getting repeated, more traffic is brought to the product/company.

 

 

 

 

 

 

 

Social Media Marketing !