The companies opt for various referral campaigns both online and offline. The online referral campaigns are very easy to do because today almost all the individuals actively use the internet for innumerable reasons. The companies and their marketers can easily penetrate their products digitally through online advertisements through blogs, contents, videos, audios etc. in various social media sites.
Benefits of a Formal Referral Program
Leads are the lifeblood of any business. So you can ask why to talk about SEO Referrals? Just focus on leads. A Nielson study says that referrals and word-of-mouth are actually the most trusted form of advertising. And surprisingly the second most trusted form doesn’t even come close. The referral programs help in generating leads also who are highly qualified and niche-specific who are more likely to result in sales.
The research was conducted at the Harvard Business Review. They tracked some 10,000 accounts at a German bank over the course of three years. It was seen that the customers obtained through referrals were both more loyal and valuable than other customers. Few factors like age and sex were taken into account. It was found that the referred customers were some 18% more likely to stay with the bank, earning 16% more in profits.
Let’s take a tour of a few more examples of companies that used referral marketing to propel their businesses:
They launched a referral program which increased the number of their users from 100,000 to 4 million in just 15 months. The total sign-ups increased by 60%. Noteworthy features of Dropbox’s referral program are:
- Both the referrer and the referred were rewarded: gave additional 500MB of free storage to both the parties.
- Gave away the non-cash rewards: provided additional storage space instead of dollars.
- Use of Email & social media invites: used SEM and affiliate marketing so that the customers can send the referral to their contacts via email or social networks such as Facebook, Twitter, LinkedIn, etc.
- Made a Progress chart: the users could track the status of all the friends they had referred through the tracker.
Today Uber is worth $50 billion and the reason behind this is its incentivized referral program. They offer free rides to people who refer the app to others. Earlier, Uber gave both the referrer and the referred a credit of $10 on new user sign up. Now, it offers $20 credits to both the parties. Features of their referral program:
- Incentives are given to both the referrer and the referred.
- The referral code could be easily shared via email/message from your phone to your friend.
- Made Partners with Capital One credit card, Starwood Hotels, and Spotify and others to attract both new and loyal customers to take a ride.
It is an online marketplace where people list, find and rent vacation homes. They have started testing a new referral scheme where they are focusing on attracting new hosts with diverse incentives.
- Brought new functionality: added new banners, notifications and navigation elements throughout their site.
- Incentives to both the referring and the referred user.
- Created a new host invite dashboard to distinguish their new host referral program from the guest one.
Tools which help to make a Referral Program a Reality
A number of tools are there to help you with your referral program:
GetAmbassador.com- makes enrolling, tracking, and rewarding easy to manage from a single, simple dashboard. The intuitive analytics shows exactly where you’re having the most success.
Referral Rock- allows to create, keep a track, and expand referral programs to boost word-of-mouth sales. Plenty of options are available like creating referral rewards, customizing the “friend offer,” and links to help share information about referral program on social media.
WishPond.com- you can create landing pages, contests, promotions, and automation for leading platforms like Facebook and Twitter.
Extole.com- it is very easy, simple, and intuitive that helps in making the process as navigable for customers as possible.
According to a survey conducted by Nielsen, it was found that 92% of people trust recommendations from family and friends. The people are 4 times more likely to buy when referred by a friend. New York Times stated that 65% of new business generally comes from referrals.
Therefore, the best approach a company can adapt to gain the trust of the customer, increase reach and sales is to create an effective referral program. Online businesses can both acquire and retain customers through referral programs. They can keep a track on their brand advocates and give incentives to the customers on promoting their product. Article contributed by Hari babu from TechAriz!