Referral Marketing Trends to Increase Your Customer Base

All the statistics about referral marketing have been confirmed after reviewing a report that included data from over 2,000 referral programs and more than 100,000 customer referrals. Referral programs are more than just a channel for customer acquisition. They allow businesses to harness the power of word-of-mouth referrals. Referral programs are the fastest-growing marketing channel. Here are some trends to help you understand why your customers prefer them.

Instant Customer trust

Your customers talk about your products and business to their friends every day. Referred friends can trust up to 88% because they have heard about your business through word-of-mouth recommendations. Trust is the key to building lasting customer relationships. Referring to customers is the best way to build trust. Referral marketing is a win-win situation if you offer a reward to customers who refer qualified leads.

Referral Software

Plug-and-play software makes it easy to create a referral program. Referral software that doesn’t require code is easy to use and launch. We love referral software for its flexibility and integration capabilities to automate your program.

High Qualified Leads

Referred customers are 18% loyal and have a 16% greater lifetime value. They also spend 13.2% more, according to research. Referral programs are a great way to get high-quality leads by spreading word-of-mouth among like-minded customers.

Higher Return

92% of people trust recommendations made by people they know. This compares to 37% who trust search engine advertisements and 24% who trust online banner ads. Although paid-for media has become more costly, the return on investment for marketing investments is not affected by this increase. On the other hand, referral leads have a 30% higher conversion ratio than any paid-for channel. A referral program that is well planned will result in 86% growth in revenue within 2 years.

A Rapidly Evolving Marketing Channel

Although Facebook, Instagram and Google have been the most popular advertising platforms, the cost per click for these platforms continues to rise, sometimes as high as 23%. The CPC has increased, but the return on investment has not changed. On the other hand, referral marketing is a dynamic marketing channel that has been statistically proven to reduce the cost of customer acquisition and increase the lifetime value of customers.

More Evidence?

Referral marketing has been a key to many success stories like Dropbox, Airbnb, and Uber. Referral marketing has shown massive growth at very low costs, so now is the right time to get on board.

Tips to Make Your Referral Program a Success

Referral software is great for building and running your program. However, your customers’ willingness to refer friends will determine your success. These three tips will help you get as many referrals as possible.

Incentives and reward with attractive incentives

Referral programs that perform well offer both an incentive and a reward. Giving back makes people feel good. Customers will refer friends more often if they know that the people they refer will also get something. Double-sided referrals are more popular than single-sided ones.

Be sure to reward the right person.

Reward the person who does the most work during the referral process. Referrals to potential leads are more common than you might think, especially when it comes to B2B referrals. When a lead converts, the company often receives the reward and not the person who referred them. It is important that the person who referred the lead gets the reward and not the business.

Make your Referral Program visible

For every opportunity that presents itself, you should promote your referral program. Your referral program will be more popular the more people know about it. Increase visibility for your referral program. Let as many people know about it and encourage them to refer friends.

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