Everything to know about Referral Marketing that can Boost your Sales

Referral marketing doesn’t get much attention to small businesses, but the industry knows its value. You might not share about any product you bought, but when you get some discount for sharing, your inner “you” automatically press the share button. Referral marketing is the best way to increase sales. Not only people bring you more customers, but they become loyal to you too.

Every app, shopping website, services, and literally every business using referral programs these days. Let’s see everything which can be known about Referral Marketing.

What is Referral Marketing?
Rewarding Options for Referral Marketing Strategies
Some Amazing Stats of Referral Marketing
Advantages of Referral Marketing
Disadvantages of Referral Marketing
Some of the Refferal Marketing Software

What is Referral Marketing?

Referral Marketing Campaign
Referral Marketing Campaign

Whenever we get a suggestion from our friend or family referring to a particular product, we are more likely to believe them. However, word of mouth is still the best referral channel out there, but it is nearly impossible for a company to track that refer. To solve this problem and encourage and reward their customers for referring their products, companies use referral marketing programs.

As a company, you provide a unique referral code to every customer and ask them to share that code and earn some profit. When people share that code with someone and bring you a new customer, they get reward points or money and you get a lead. As already said, this is not as powerful as word of mouth, but it is still a good option as people will share your content to earn points.

Rewarding Options for Referral Marketing Strategies

There are four ways to provide the reward:

  • Rewarding both the parties: You can reward both, referrer and refer to a person. This way, both the people get the benefit and it is a great way to motivate them to bring more customers.
  • Rewarding the referred: Reward the person who is referred by someone. People who feel guilty to make a profit by referring will love this feature. However, you should analyze the audience first, as not the majority of people feel that way.
  • Rewarding the referrer: By rewarding the person who referred someone, you motivate the next person to refer someone. By this method, you don’t have to spend on both the parties and the process will still continue.
  • No Rewards: You can provide the referring code and reward none of them to share it. Although this is an option, people will not appreciate it much unless you have great content.

Also Read: How to Design Newsletters That Help to Run Refferal Campaigns


Some Amazing Stats of Referral Marketing

  • People are 4 times more likely to buy when referred by a friend.
    2. 92% of respondents trusted referrals from people they knew.
  • Social media drove 31% of overall traffic to sites.
  • Offering a reward increases referral likelihood, but the size of the reward does not matter.
  • Non-cash incentives are 24% more effective at boosting performance than cash incentives.
  • Every referring customer makes an average of 2.68 invites.
  • Companies with formalized referral programs experience 86% more revenue growth over the past two years when compared to the rest.The source of these stats include Neilson.com, Shareaholic.com, The University Of Chicago, American Marketing Association and Referralsaasquatch.com

Advantages of Referral Marketing

  • Budget: The first and best advantage of referral marketing is that you don’t have to spend too much money. The money needed for referral marketing is too less than other traditional advertisements. However, it depends on you that how much reward you give to your customers for sharing your content with others.
  • Comfort: People are more comfortable to buy any product when it is referred to by their friends or family. Referral marketing is much more effective than traditional advertising.
  • Fast Results: The impact of referral marketing can be seen very fast. It doesn’t take much time for people to share any content. If you are using referral marketing for an app or e-commerce website, then you don’t have to wait too long to see the results.
  • Continuous Process: People don’t stop referring until you want them to. A will refer to B and B will refer to C and D. It is a never-ending process. So, you don’t have to worry about the process. However, you should update the process and the system.
  • Loyal Customer: The best thing referral marketing does is to target the loyal customer. Even if they are not loyal customers, they are still loyal marketers for you. When people get rewards from you, they will use your product over others’. These were some of the advantages of referral programs. Now, when we have seen the advantages, let’s have a look at its limitations too.
Boost Your Referral Campaign

Disadvantages of Referral Marketing

  • Budget: However you are saved by spending tons of money on the advertisement with referral marketing, but you still have to spend some money. You will have to give up some profit to the customer in the form of rewards.
  • The sense of Guilt: Some people don’t share their referral code as they think they will be sellouts. Some people don’t like making a profit out of someone without doing anything but a click. They will have a problem with their inner “sense of guilt”.
  • Not Efficient Enough: Compared to the word of mouth referring, referral marketing is just a kid. People are more likely to buy when people heard about the product by somebody. Moreover, people know that word of mouth referring is mostly free, so everyone would give their honest opinion. Whereas, in referral marketing, most of the people prefer to earn rewards only.

Some of the Refferal Marketing Software

Now, when you know what are the advantages and disadvantages of referral marketing, you might want to know how you can have this program on your own website or app. This is 2019, therefore, there is service available for everything. You can use any of the below tools to integrate the referral program into your website.·    

  • ReferralSaasQuatch.com
  • ReferralRock.com
  • ReferralCandy.com    
  • RewardStream.com    
  • GetAmbassador.com
  • InviteReferrals.com

There are many other options you can go for. Research well before you chose any of the above refferal marketing tools.


Also Read: How to Build an Email List for Business & Tools needed for Email List building


Conclusion

Referral programs increase your sales. However, you might feel annoyed when someone WhatsApp you a download link again and again, which will make them some bucks. But by seeing something over and over again, an idea to check that service out develops in our mind. And that’s what the ultimate goal of marketing is. Just check it out for some time, and see the results of referral marketing.

Do you use referral marketing in your business? Comment some great referral marketing tools everyone should use.

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About Parnas Ghosh

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