If you are a marketer, you probably already know a lot about referral marketing; but, do you know its value? According to statistics from InvespCRO, referral marketing leads convert 30% better than leads generated from other marketing channels.
Referral marketing’s online presence is on sharp rise. From statistics, referral channels can deliver higher value compared to other channels. As a matter of fact, customers referred by other customers are 4 times more likely to refer more customers and 37% more likely to remain loyal customers. when you involve a referral in your sales, you are likely to experience 41% higher conversion rates. As you can see, referral marketing is very powerful and critical marketing tool that you can utilize to improve your sales and ultimately, conversions.
In another interesting research by the Havard Business Review, the lifetime value of a referred customers is 16% higher than the non-referred customer. Also, referred customers are cost less to acquire than non-refereed customers.
In fact, the Harvard Business Review states the lifetime value of a referred customer is 16 percent higher than that of non-referred customers. Referred customers also churn 18 percent less than non-referred customers. That’s why it’s important to properly incentivize your referral sources.
The best referral starts with your customers
Trust is a critical component when you are trying to generate leads and nothing makes this easier than referral marketing. Nearly 84% of customers will trust recommendations from the people they know. Think about it: your customers are people who are already using your products and services. Chances are if they like the products, their friends and colleagues will trust them because they have already tried the products.
Formalize your referral program
Many companies make the mistakes of treating referrals casually. Since referrals are bringing you so much business, why not formalize your referral marketing strategy?What you need to do from your end is probably to offer incentives so that they can spread the word about what they like about your products. You need to find a way of rewarding customers who want to spread the word and make the experience as smooth as possible. Programs like these work magic because they have that personal touch.
When you ask a client to refer a friend, it creates an expectation in them that you are working closely with them and you value them. As a result, your customer will not only get excited about your company, they will develop a positive perception about your company.