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Referral Marketing involves gaining business through word-of-mouth. The idea is to find ways in which to encourage your customers to refer your brand to friends and colleagues. This is a form of organic growth, which when successful provides worthwhile results.
According to LinkedIn, 84% of B2B decision makers start with a referral. Some companies which have implemented a strategy to encourage referrals successfully include Google (Google Apps for Work), Dropbox, Evernote, and Tesla.
In order to inspire referrals from your customers, they must feel they have a reason to refer. This requires some sort of strategy. Treating your customers well and offering good service is of course one natural way to obtain referrals, and perhaps the most effective and long lasting approach. Another method is offering rewards – such as prizes, access to more services, free upgrades, or product samples to an already established user who recruits others to try the product or service.
There are also less obvious ways to raise referral numbers. Engaging online videos that include information about your brand and why it is valuable, or which encapsulate a shared value system, can become a potential referral when shared. Offering unique, surprising and pleasant experiences (which could be innovative packaging, for example) can get you attention leading to social media exposure, attracting a larger audience and customer base. Businesses can use a partner marketing program, too, where companies may come together and co-operate to boost marketing and sales, by enlarging each other’s’ brand exposure, and in this way referring across their respective customer bases.
The value of referrals to your business is clear-cut. It is low or no-cost advertising, with the intention to gain an increased customer base, increased exposure, and a better reputation. There are tried-and-true methods to gain more referrals; based simply on good service or on a reward system for a more aggressive approach. Then there are more unconventional and creative ways to achieve the same results.
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