Search engine optimization is the process of affecting the search results of famous search engines (legally) to promote one’s business online and reach out to more people. Out of the various SEO strategies used by marketers, one of the most famous strategy due to its effectiveness is referral marketing.
In referral marketing strategy, potential customers are brought to the website through a referral link or some other people which are joined in by the company and paid for every consumer they refer to the company.
Many bloggers and other influential online celebrity use referral marketing to earn money. Bloggers who review products use referral marketing when they, after reviewing a product refer to a particular website to buy the product from. You can check out https://www.webmarketing123.com/ – types of marketing to know more about referral marketing.
Sometimes if the product is well and good, it gets free marketing from the initial buyer of the product. For example, if a person buys a certain cellphone and is contended with the working of it he will surely refer it to 10-15 people and thus the company will get free marketing for it’s a product. According to Nielsen, approximately 65% of the sales of a new product happen through friends referring a product to the consumers.
So let’s talk about some ways for referral marketing strategies.
Happy Employee Equals Free Referral
An employee of the company is it’s the biggest advertiser. If the employee is happy with the company he is most probably going to refer the product and the company to his friends and families.
Some companies even provide incentives and special rewards for employees who do referral marketing. A happy employee referring a company or a product has a lot of benefits. For example, the company’s image in the eyes of the general public is bound to improve thus attracting good future employees and making a name in the market itself.
Tie up with other Established Businesses
Companies use this policy when they enter into a foreign land where they use the name of other big companies to use their influence to get consumers.
In this type of referral marketing, a company uses another company to tie up in a partnership and then use the already established company’s reputation for a referral.
For example, Canara bank had tie-ups with Aviva in which Aviva launched their products using Canara bank.
Mostly these tie ups happen with banks.
Using Customers as Referral
Customers of a company are the people that actually use the product and if satisfied with it most probably end up referring that product to their friends and families. Like some company gives incentives to the employee for referral, some also give incentives and special offers to the consumers thus making them more likely to refer the product.
Dropbox, a file storage company used referral marketing strategy in 2009 to gain consumers. In their scheme, a consumer is given free extra storage if they either bring or are brought by another customer. In only a year of this scheme approximately 35% of Dropbox business was brought in by referral marketing.
The Must-Haves for Referral Marketing
1. Good Product/Service
A good product/service is a must for the company to prove that its even worth referring! If a company has low quality products, it does not matter how many celebrities endorse it or how much money is spent in advertising as friends and families have a much bigger impact on a customer and a bad product no matter what, will not get referred. Thus a good product is the key to a good referral marketing.
2. Realistic Targets
Realistic targets must be set for the customers or who so ever is the referrer of the product. Like getting 15 people can be tough for a new customer and will lead to loss of interest for that customer so setting of low targets like 5 customer will eventually help the customer build a referral base.
3. Good Rewarding System
Rewards must be given to the customers who brought people through referral and the rewarding scheme should be good enough to keep the customers motivated enough to get more people.
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We see that the referral marketing strategy is a very good strategy to get a customer base with very little investment. But sometimes the referrers use shady methods to get the rewards for referrals, so better beware!
Overall the referral strategy is one of the best marketing strategies for you to have a good product with a loyal customer base. Article contributed by Haribabu from TechAriz!