Referral marketing trends to attract more customers

Referral marketing trends to attract more customers

After reviewing reports with findings from more than 2,000 referral programs and over 100,000 customer recommendations, all statistics on marketing recommendations it has been proven true. By returning the power of word-of-mouth to your hands, referral programs offer businesses much more than just a channel to attract customers. With a few trends indicating that referral programs are the fastest growing marketing channel, find out why referrals buy earlier, spend more, and stay longer.

Instant Customer Trust

Every day, your customers talk about your business, brand or products to their friends. Of these conversations, up to 88% of informed friends are more likely to trust you because of the credibility conveyed by verbal recommendations. We know that lasting relationships with customers are based on trust. And the fastest way to gain customer trust is through referrals. Insert a reward every time a client refers a qualified lead and you have a winning recipe for success in referral marketing.

Easy to use referral software

Now anyone, anywhere, can run a referral program using plug-and-play referral software. Codeless referral software offers an easy-to-use solution for building, running, and managing your referral program. Fully customizable and in most cases offers integration features to automate your referral program, we love referral software because of how much these referral platforms have become available to any business of any size.

Highly qualified potential clients

Recommended customers are 18% more loyal and have 16% higher life value. And not only that, but it was determined that they spend up to 13.2% more. Referral programs help create a large number of high-quality leads through word-of-mouth recommendations among like-minded customers.

Higher ROI

92% of people trust the recommendations of people they know, compared to 37% of people who trust search engine ads and 24% who trust online banner ads. Although paid media is becoming more expensive, the return on investment in marketing does not reflect this increase in costs. In contrast, referral prospects have a 30% higher conversion rate than prospects from any other paid channel. Moreover, 86% of companies running a well-planned program of recommendations will experience revenue growth within two years.

A rapidly evolving marketing channel

While Facebook, Instagram and Google have always been advertising platforms, their cost-per-click continues to rise, in some cases by up to 23%. As the CPC increased, the return on investment remained unchanged. On the other hand, referral marketing is a fast-growing marketing channel that has been statistically proven to reduce customer acquisition costs and increase the lifetime value of your customers.

Need more evidence?

We’ve all heard of the different development success stories that companies like Dropbox, Airbnb and Uber have seen using referral marketing strategies. Citing huge growth at a very low price, the results are obvious that it is time to ride the wave of marketing recommendations now.

Referral marketing trends to attract more customers
Referral marketing trends to attract more customersReferral marketing trends to attract more customers
Referral marketing trends to attract more customersReferral marketing trends to attract more customers

Close the recommendation circle to get a higher ROI

So you’ve already spent the budget to acquire a user base using paid media (albeit expensive). Request a return on advertising investment by closing the circle of recommendations. Reducing CPC by as much as 34%, using customers acquired through paid media to recommend their friends through referral programs, closes the circle of recommendations. This ensures that the cost of acquiring customers through paid media is recouped.

Here’s an example to help us explain what we mean by this: Let’s say you spent $ 20 on an Instagram ad to gain a new customer, then ask that client to recommend a friend for a $ 5 reward, your CPA ranges from $ 20 to $ 12. .50 USD because they have now acquired two customers for the total value spent.

So what are the risks of launching a referral program?

In short, there are none. Launching a referral program will require you to reward customers only when the people they refer qualify. So what we mean here is that referral programs work based on how well they work, rewarding users who refer only when a new prospect turns into a client.

Referral programs shift your business costs from pre-customer acquisition to post-customer acquisition – paying only the reward after you’ve actually acquired a new recommended customer

Tips on how to make your referral program a success

While referral software makes it easy to build, run, and manage your referral program, success will depend on your client’s willingness to recommend their friends. To make sure you get as many recommendations as possible, read the following three tips for success recommendations

Offer an attractive incentive and reward

The best referral programs offer encouragement and reward. People feel good when they give. Most customers will be more inclined to recommend their friends when they know that the people they recommend will also get something. Therefore, bilateral referral programs see a higher volume of user adoption than unilateral recommendations.

Make sure the right person is rewarded.

Be sure to reward the person who does the most work in the referral process. More often than not, and especially in the case of B2B referrals, customer testimonials start with the individual referring the prospect. But when that potential client turns, the reward is often given to the company, not the individual who made the recommendations. Make sure the individual making the referral gets a reward, not just a job that benefits the new prospect.

Make your referral program visible

Market your referral program whenever you get the chance. The more people you tell about your referral program, the more people will join. Increase the visibility of your referral program and make sure that as many people as possible know how to join and start referring their friends.

Summary

What used to be expensive, time consuming and highly technical has now become much easier to create a referral program. Referral software eliminates the need to hire a developer to create an internal referral program. In addition, the best referral software offers integration features to fully automate your referral program. It is now easier for merchants and business owners than ever to create, style and run a referral program without writing code or the help of referral marketing experts.

We hope you enjoyed these research findings that explain why launching a referral program is the best way to get qualified leads and grow your business. For more information, download the full report on the marketing trends of the recommendations made by our partner agency of the European Agency.

Take the report here.



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