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Referral Marketing Funnel RoI

The most obvious and frequent question that comes to mind is - “What kind of return can I expect from a referral marketing campaign, given that I am investing, time, effort & money ?”  Valid and legitimate question. Since budgets are rarely unlimited, this needs to be explored further. After some trials, you will decide on cutting the budget on anything that doesn’t yield sufficient results. Let me share that, referral marketing (campaigns and program) are well worth an investment.

There are various levels at which referral programs can be offered. Some are Free, some are Freemium (free with certain things available under premium, which requires some payment), daily deals, premium, and so on. Smart marketers know how to segment their offerings. There is one segment called "Subscription". I shall deal with it in future blogs. Suffice it to say uniqueness and are capable of meaningful RoI.

Let us look at little more closely at the Referral Marketing Funnel.  

THE REFERRAL MARKETING FUNNEL

The referral conversion funnel should be seen as an inter-dependent sequence of events, just like you would for any marketing funnel.

Referral Marketing Benchmarks | Friendbuy 

Sharing rate – Percentage of people who share when presented with an opportunity to do so.

  • 7 %  – Nothing to get excited about.
  • 15% – Something to look forward to.
  • 30% – Good response. This is where you should try to be.
  • ≥ 50% – Exceptional. Does not happen every time.

Note: Performance will vary depending on a number of factors.. Can you improve the sharing rate ? Write in to the eMail id below, for a discussion.

Referral Visits – Number of friends who see shared content, usually on Social Media (like FB, Twitter, LinkedIn, etc.). Consider also eMail, SMSes, or a link to your URL.  The unclear and tricky part here is that FB, Twitter, or clicking on a link to your URL, does not tell you how it happened, thus creating question mark on the normal marketing calculation.  While some eMails may show how many opened, the simplest and best way to approach this — measure the number of visits per share.  So,

  • 1 visit per share – Waste of time and effort.
  • 2 visits per share – Something is better than nothing. Zero cost.
  • ≥ 5 visits per share – Now you are getting somewhere.

 How you can improve referral visits ? Write in to the eMail id below, for a discussion.

We shall discuss the Referral Conversion Rate, Lift on Revenue and CPA – Cost per Acquisition in the next blog. 

Pls share your feedback blogpage or eMail to drsunilpevekar@gmail.com

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