Referral Basics

One thing from WoM is still valid and a useful tool to leverage for better performance – people trust the opinions of other people in their lives, whom they know well and for long. This set of people can be family, friends, colleagues, social media friends and influencers. People they know well and whose opinions mean a lot to them. 

Ask any battle–hardened marketing veteran, read study after study on which is the best form of marketing and the unanimous answer will be – Referral Marketing. Time and again it has been proven that Referral Marketing is probably the best form of marketing, when it comes to sales, new customers and new customer conversions.

Some people also call it as WoMM – Word of Mouth Marketing. There is a slight difference. WoMM is just people purchasing products based on someone else's opinion or influence. WoMM differs from naturally occurring WoM, which is actively influenced by people talking about a product or service. Organizations often use seeding (a message in a network of people, which rewards regular consumers) to engage in WoM. Such people are called as WoM Agents. It is difficult to truly control WoM, which means it cannot be directed in a particular direction. You will see some examples of this in the next part.

  

It is known to most marketers that referral marketing is a promotional strategy that encourages current customers to refer new customers, whom they know well at a personal level. Many think of referral marketing as an incentive, to get a friend to buy. That would be a very narrow way of looking at referral marketing. Why ? I refer my friends, not because of the money, which in many cases is hardly big money. I refer them because I want them to have the same great product, great experience, great value of money that I got. I do it to reinforce my friendship, by helping him / her get something unique, something that will bring a smile to his / her face. In short, a closer bond with my friend.

When you think of it, referral marketing makes sense — we regularly get advice from friends on a destination to go to for a holiday, which places to dine, which wine is good and so on. They share their experiences and they advise us to go for the same. Usually happens when the buying experience and products are exceptional. This brings up a critical point — referral marketing will not work unless you have an excellent product, service or experience. Probably all three being present will make your referral marketing irresistible.

Content for next posts :

ü three fundamental reasons referral marketing is so powerful

ü some examples of extremely successful referral campaigns

ü tactical steps to build a powerful referral marketing engine for your business