Referral campaigns are among the most effective marketing techniques out there. It doesn’t matter whether you are running a regular store, large scale corporation or a start-up online business; word-of-mouth marketing and referrals are the best ways to drive sales to your brand. Here are some facts that you may not have known about referral marketing.
1. People tend to trust word-of-mouth more than any other form of marketing
According to surveys conducted by Syncapse, Nielsen and Market Force, 77% of consumers tend to consider buying a new product when they hear about it from friends or family members. Email marketing and Social media are among the most effective ways of effective subscriber engagement and work well with referral campaigns.
2. Referrals increased Dropbox signups by 60%
According to the popular online-storage provider, Dropbox saw a 60% increase in sign-ups as a result of referrals. Dropbox managed to attain this level of success because they provided an easy option for people to share data through their platform while also making it very easy to refer friends and family.
3. Providing incentives make referral campaigns more effective
Market Watch reported that 79% of US consumers were most likely to ‘like’ a brand on Facebook to receive incentives. Here, at Incentivit, we specialize on creating incentive based referral campaigns. Referrals, when paired with a discount, freebie or other offerings, are more attractive to consumers.
4. Referral marketing drives high-impact subscriber acquisition
Referral marketing is designed with high-impact subscriber acquisition in mind. Conversion rates for referral marketing range from 5 – 40 percent and many companies have seen massive success.
5. Referral marketing is now the 3rd ranked marketing method in the world
As per an advertising survey conducted by Nielson Global Trust, advertising channels such as referral marketing are ranked at the third place in marketing message delivery methods. About 84% of global consumers stated that they consider the recommendations from family and friends as the most trustworthy form of advertising.
6. Referral marketing can reach a wider audience than SEO or SEM
While SEO and SEM is focused on making your business appear on searches, referral marketing is more about reaching an audience who are not even searching for you. This audience is considerably larger than those who are searching for you on any search engine at any given time. The same type of reach can be attained with email marketing and if the message comes from a trusted source, referral clients tend to become paying customers more often than not.
7. Referral customers display stronger loyalty and higher retention rates
According to the findings of a three-year long study conducted by a German bank, referral customers tend to stay with a business much longer than other customers and have higher margins. The bank reported that 18% were more likely to stay with them than the customers attained by other means.
8. Non-cash incentives are more effective than cash incentives
With tools such as our own Incentivit, the referral campaigns are driven by incentives. According to a study conducted by a university in Chicago discovered that non-cash incentives are 24% more effective at enhancing performance.