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True Power of Referral Marketing - 1

Referral Marketing, is also known as Word–of–Mouth Marketing (WoMM). It is one of the oldest (and still the most effective !) marketing strategy. Basically, it is all about people buying your products & services, because somebody they trust recommends it to them.

Referral Marketing is a subtle process that is omni–present in our daily life. The reason why small businesses do not think of referral marketing is that it is not as glamourous or visible like a TV commercial or a hi–fi marketing campaign. In India, I would call it the IPL Effect.

All studies have shown Referral Marketing as the most powerful form of promoting any business. A study by Nielsen Company, a leading global provider of information and insights into what consumers watch and buy, shows that 90% of consumers around the world say they trust referrals from friends & family, above all other forms of advertising. Additionally, 70% of consumers around the world also say that they trust other consumers’ opinion posted online. These numbers alone are enough endorsement and speak volumes about the huge power of Referral Marketing, an often disregarded and underutilized marketing tool.

What makes Referral Marketing so special ?
1.   It comes with a built–in persuasion factor
The persuasion comes from the fact that the recommendation comes from a friend or family member. Think last time you went to a see a new movie, because your friend couldn’t stop raving about the story, the acting and the locations where it was filmed. Or the app that you downloaded, looking at how it has helped your friend or colleague improve his productivity. If you are an average person like me, I bet there were a quite a few such instances.

Basically, Referral Marketing works that well because people trust the opinions of other people they respect and love (friends, family or people they admire).

2.   Laser–like precision of  Targetting
If you have tried (or want to try) FB ads, you will soon know that unless you get your target audience right, your entire ad budget is a waste ! It is like shooting in the general direction with your eyes closed, hoping and praying that some of the bullets will hit the target ! With Referral Marketing, the targeting is magically and perfectly done for you. Referral marketing involves recommending your products / services to friends & family (sometimes indirectly through Social Media) who not only want such a product but also need it the most. Your targeting is precise. With zero efforts on your part !

3.   Extremely High Reach
I remember, as young child, that whenever we wanted people to work in the house, whether it was the painter, gardener or the maid, we always sought to ask people we knew, if they could recommend someone. Simple Referral system, thought it was not called so, at that time. I recall that recently, when it was time to buy a new laptop, as replacement for my old one, I asked a few friends, who know about laptops, as to which one to buy and from where.  Technology, in the form of FB and WA helps here.

In the next part, we will see exactly how you can take advantage of this massive opportunity.

Pls send your feedback to drsunilpevekar@gmail.com

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