Let’s play a Mental Game. Think of the answer to Who
Do You Trust ? You have 2 choices. Those paid results at the top of the
Search option ? Or your own sister ? That banner on YouTube
? Or your best friend from college ?
This is an easy game. We trust our family,
friends, and even strangers more than we trust advertisements and brands.
When it comes to making purchases, we’re all
influenced by a number of different factors, which impact our decisions to
varying degrees. Great copy on an ad might initially capture our attention, but
likely won’t be enough to drive a sale the first time we see it. Seeing a chunk
of positive reviews can be incredibly persuasive. A referral from a friend or
someone we know personally, however, is what’s most likely to get us to
purchase.
If you had me write down everything that I’ve
purchased because someone I knew recommended it to me, this would be an
exhaustingly long blog post. I’ve purchased everything from clothing
subscriptions to mulch for my backyard to shower cleaner that my friends have
recommended, and I’ve enthusiastically shared my favourites with them, too.
Just Think : To hire an electrician to install
recessed lighting, would you rather find someone from a Google search or get a
name from a friend who had their entire house rewired by someone last year ?
Why ?
We trust our people network more than anyone
else, which is what makes referral marketing so powerful. Many brands overlook
this, however, hoping that WoMM is happening by itself or even worse – not
being sure how to generate referrals. Can we change that. Definitely a big Yes.
Come to think of it – RM is easily the most
beneficial and profitable form of marketing that you can take advantage of,
whether your business is B2B or B2C. Keep this thought in the background and
you will quickly realize the potential (92% of consumers trust referrals from
people they know). This is backed by data.
Let me a share a little more
ü 77% of
customers are more likely to purchase something new when learning about it from
friends or family than any other source.
ü Consumers
are 4x more likely to purchase something when referred by a friend.
ü Word of
mouth marketing is believed to be behind 20-50% of all purchasing decisions.
ü B2B
businesses with referral programs have 69% faster closing times on sales and
approximately 70% higher conversion rates than those who don’t.
ü Referred
customers have an LTV that’s 16% higher than non-referred customers.
ü Customers
that come through referral have a 37% higher retention rate than those who
become customers in other ways.
To be continued in Part 2. Pls share your feedback & comments to drsunilpevekar@gmail.com
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