Referral marketing - let your company get loud!

Service Business

Have you ever decided to buy a product because someone you know recommended it to you? It probably influenced the decision-making process to a large extent. Marketing specialists have also noticed how important a role the opinion of a close, trusted person can play in making decisions. Find out what referral marketing is and how you can use it to promote your business!

Referral marketing - what does it mean?

Referral marketing is, in a way, an extensive model of word of mouth marketing. It consists in openly encouraging recipients to forward the obtained information about the company, brand or product. You can find reviews that consider referral marketing to be a more planned, business-oriented form of word of mouth marketing. It should be said, however, that these are other forms of marketing, as indicated even by the nomenclature itself - at least in English.

Referral marketing (referral) is not a term of word-of-mouth marketing, or word-of-mouth marketing. On the internet, however, referral marketing can take on the characteristics of well-known viral marketing. In the following part of the text, however, we will try to present some differences between referral and viral marketing on the web.

Referral marketing in action

What exactly referral marketing is and how it can be conducted is best described by an example.

In 2009, Dropbox, a provider of disk space sharing services, decided to conduct a referral marketing campaign. He offered his users to recommend Dropbox to their friends - but not for free. Both the recommender and the person whose service was recommended were to benefit. The form of payment was to provide free disk space with a certain value - however, it was made only when the encouraged person registered on Dropbox. A year later, it turned out that Dropbox had seen an increase in signups of over 60%! In April 2010, Dropbox verified that its users send nearly 2.8 million purchase suggestions to their friends over a 30-day period.

Referral marketing is primarily a form of marketing that benefits each of the three parties involved. The company acquires a new customer, brand awareness and trust in it also improve, and the recommending person and the person who was encouraged to use the company's services - a gratification. Very often, referral marketing is used in sales - then the gratification can be a gift voucher or a rebate.

Internet referral marketing

Referral marketing is also very often used in e-commerce activities. We mentioned earlier that it should not be considered viral marketing, and in practice, the two types of marketing activities do not have much in common. Viral marketing uses virals - messages attractive to a wide audience, which they spontaneously share via e-mail, blogs or social media. A viral does not have any specific benefit to the people who pass it on.It is also difficult to clearly define how it affects the benefits for the company, apart from the potential increase in brand recognition.

The referral marketing content clearly states the purpose and benefits. For example, an online store offers its customer a 30% discount on purchases, if they manage to encourage a friend to visit the store - they will also receive a 30% discount for making purchases (e.g. sometimes also under the condition of prior registration on the store's website or joining the newsletter subscribers). ). The benefits achieved by each participant of the referral action are visible. In addition, the store aims to achieve a specific goal - an increase in the number of customers, and thus - above all, an increase in sales.

On the blog, you can see various examples of online and non-internet referral marketing activities.

What should you remember in referral marketing?

If you are going to conduct a referral marketing action, we will tell you what you should pay special attention to. Although the idea itself is very simple, it is worth knowing about some general guidelines related to this form of promotion.

  1. Provide your customers with the right service and take care of their positive shopping experience - a truism, but it is worth bearing in mind. Make your company really worth recommending.

  2. Pay attention to statistics - they will allow you to optimize your referral campaign and modify the forms of gratification that new customers will receive in such a way that they are as attractive as possible for them.

  3. Make your customers themselves willing to share positive opinions about your product and their product experience. Make it easy for them to share that opinion.

  4. Accurately define the conditions in your referral marketing program - perks for referrals and new customers, conditions for receiving them, etc.

  5. Focus on influencers - identify which customers may be particularly attractive to your business when it comes to recommending it. Try to motivate them additionally.

Experts say that referral marketing is still a very effective marketing tool in almost every business. The Internet allows for the development of referral marketing activities in a special way. Try to use it also in your company!