Referral Marketing: Turn Your Customers Into Sellers
Ensuring your customers’ satisfaction and loyalty is not an easy task. Whatever your industry, it requires you to deliver value by meeting the buyer’s expectations for price, deadline and handling.
If your business is to offer a personalized service, such as Outbound Marketing consultancy, you must be close to the customer, always solicitous and attentive. But that takes time and experience.
On the other hand, if you are the owner of a social network or e-commerce, you have to ensure the functionalities, offers and user interface are suitable for your target audience and persona… Keeping your design and product team awake.
With so much work to win the customer, it’s scary that many companies, when they do, don’t know how to take advantage of it.
If it’s so hard to gain customers, why don’t you still use the ones you’ve gained to increase your sales?
Want to know how? Using referral marketing!
The m reference marketing helps you turn your customers into salespeople. It is a new organic vehicle that, in addition to having a great reach at low cost, prints an excellent image of your brand to those who hear about it.
After all, would you bungee jump at “Agência Radical X” if your friend hadn’t lived to tell you about how good the experience was?
Or even, would you hire a consultancy like Outbound Marketing to revolutionize your sales if you didn’t see cases of so many satisfied customers, which is excellent service?
I don’t think so, right…
After all, what is referral marketing?
Referral marketing, better known as word of mouth, is a marketing strategy to lower your cost of customer acquisition (CAC) and increase your brand reach. All this through the word of trust of its clients and former clients.
Do you know that Zé’s bakery that is always on the tip of the tongue of the residents of the neighborhood? Most sales come from loyal customers and their friends, who trust the service much more than they’ve heard about it.
Can you imagine a customer talking well about your business like that, in the ear of a potential customer? Hahaha
Your Joe doesn’t know how many sales he generates by repurchasing or referring customers. It just encourages the customer to recommend the brand and provides quality service. In other words, it generates new customers with the best thing it has ever conquered: customer love.
You may also be interested in Service Design: How Design Helps Sell A Service
Reference marketing is based on the old practice of word of mouth that Mr. Zé’s bakery has used to maintain itself for decades. The difference is that it applies planning and control to the digital environment, using social networks and email as vehicles.
This is a technique that is on the rise in the US, with cases like Ambassador, a startup that facilitates the application of the strategy. They received $5 million in investment and have email giant SendGrid as one of their clients.
Why has referral marketing not yet established itself in Tupiniquim soil?
Referral marketing is not easy to apply. It requires overall customer satisfaction, the creation of an attractive incentive that does not harm the company’s financial health, control of all interactions and metrics…
Therefore, not just any company is suited to this strategy in the short term. In addition, the Brazilian trend is still content marketing, which will be in focus for a few more years.
But make no mistake, this model brings excellent results, and it is here to stay. It is another tool for marketers to increase their sales. By following the 3 basic principles below, you will be able to create an outbound marketing team from your customers.
The journey of word of mouth marketing
Referral marketing takes place in three basic steps :
Charming ( delight )
First of all, your customer must be delighted with your brand to recommend it to friends. To do this, measure satisfaction, provide exceptional support and service, and formulate action plans for continuous improvement.
The goal is to leave the customer like that when talking about your product!
Now that your customer is in love with your brand, product or service, you should give him a little push to get him to go around telling you about it.
A dissatisfied customer tends to make a lot more noise than a satisfied one. But, with due encouragement, you can reverse this scenario.
This incentive can be given in several ways, from a discount on your services to a gift, from a bonus service to an extra consultancy. However, it should be thought of according to the persona of your business, the Lifetime Value, and the margin available for sacrifice.
If your customer will return $5,000 in lifetime profits to you, then maybe a $500 incentive might make sense. Plan according to your company.
With the right satisfaction and encouragement, your customer will recommend your brand, but without proper control, your strategy could lose effectiveness. For this, find out exactly how many customers each ambassador brings on average, what is the average ticket of the nominees, etc.
Also, try to do customer development, get closer to your customers and understand how they see your referral program, to make the necessary adjustments.
If you have very large customer traffic or your business logic does not allow you to do this monitoring manually, it is recommended to use tools that run your referral program on automatic.
Also Read: Marketing Tools We Use and Recommend
As difficult as this process is to institute, its gain is undeniable. The conversion rate of referred customers is higher, as is their average ticket. Also, if you engage the new customer early in your referral program, your churn for monthly services or your repurchase rate is also better.
So, if your customers like your company, don’t miss this opportunity. Learn how to increase word of mouth for your business and use best practices in referral marketing and turn your customers into sellers and watch your CAC go down and ROI go up.
This post was written by Henrique Cavalieri, marketing specialist at Ditiz, a company that helps you increase your sales with software to boost your e-commerce’s word-of-mouth marketing. Visit their website and learn more about referral marketing! 😉
And, if you don’t understand the terms used in this article, download our ebook and learn all the jargon. Just click on the image below, okay?