Referral marketing is another strategy in a large field of marketing tactics. One of the oldest marketing methods, it is also one of the most effective. Referral marketing is vastly different from network marketing, which is more about luck and persistence. Referral marketing is not a coincidence, rather, it is the outcome of day-to-day activities of building relationships with clients and encouraging them to spread the word.
The biggest issue is that referral marketing can seem messy and random to some business owners. They don’t see an easy way to track, measure or encourage referrals.
However, the savviest business owners and entrepreneurs will implement a referral marketing program that allows them to easily promote their business, encourage referrals and especially reward the customers who deliver referrals. When your company employs a fully-functioning referral marketing strategy, you will easily increase your revenue. However, if you take it a step further and use a referral marketing software to modernize your technique, you have access to data that will tell you how many referrals you’re getting, from whom and what they’re buying.
There is a simple reason why referral marketing works to increase business. It’s because…
People love to talk.
People talk everyday to their friends and family about the brands they use, the restaurants they visited, the salon where they received their latest service. If you listen closely, those conversations are happening everywhere. People are already going to talk – they’re going to bring up brand names, company names and websites – so why not encourage them to bring up yours while they’re at it?
As you now know, referral marketing works. Even better, the leads cost much less to acquire, they’re quicker to close (they’re warm!)
As I am sure you have heard from other sources, Inbound leads, or referral marketing leads cost much less to acquire and are often quicker to close. With an active pipeline built by referral marketing, you can lower your traditional advertising costs and increase your revenue and margin.