These referral marketing statistics tell a compelling story on how to acquire new customers to drive business growth by leveraging recommendations.
Road Trip: Navigating Through the Customer Experience
Referral marketing is the customer-facing, marketer-friendly solution that extends the customer experience and turns fans into referring machines.
The contracts have been signed, sales has made the handoff to success, the proverbial bags have been packed. We're on our way down the customer journey! Be sure to clear out any obstacles for a well-paved path to singing your praises and repeat purchasing. Do your thank you pages include your referral program? Is there a refer-a-friend pop-up on the home page?
Many companies are pulling out all of the stops to intrigue and nourish prospects as they travel the path from initial awareness to purchasing decision. Often, these darling prospects hit a dead end as soon as they become paying customers. This leaves post-purchasers less likely to become long-term customers and more likely to make their next purchase from one of your competitors.
Attentive marketers are seeking innovative solutions to fill in this post-purchase gap, especially when it comes to providing ways for customers to easily share their red-carpet experience with others. Even established brands with high customer satisfaction numbers are leveraging the opportunities for engagement that come after the purchasing decision. Smart marketers are adopting solutions, like referral marketing, to develop a more robust approach to building a total buyer journey that significantly extends customer lifetime value.
Automate Manual Customer Referral Programs
PWC's 2016 Total Retail Survey revealed that traffic and referrals from social channels are growing faster than all other online marketing channels.
Digital interactions are a primary driver of today’s purchasing decisions.
So why are brands still trying to capture online engagement with offline practices?
Your customers are worth more than easy-to-forget emails, recyclable coupons, or point-of-sale throwaways. Hard-to-manage manual referral programs present a host of challenges that can quickly drain marketing teams of time and resources. For starters, there's no real-time visibility for companies or customers, limited to no reporting capabilities, and no real opportunities for optimization. If you’ve made the mistake of implementing a manual customer referral program that just can’t keep up with your digital business, it’s not too late to turn the tide.
Referral marketing programs empower brands to invite customers to opt in to a platform that encourages easy-to-share online recommendations and tracks customer sharing behavior. This makes for an intuitive and encouraging environment for customer conversations.
Pit Stop: Instead of letting customer conversations go unnoticed, make them a central focus of your customer experience strategy.
Get Familiar With Customer Behavior
Today’s customers want to feel like they’ve discovered the next best thing all on their own. For marketers, that means crafting a varied customer journey that offers a range of entry points and meaningful interactions.
Customers engage with overlapping marketing strategies on their purchasing journey.
In fact, a recent report by Deloitte revealed that 66% of consumers now prefer a self-directed shopping journey, up from nearly 30% in 2014. This means that it takes more than static, corporate messages to grow a loyal community of customers willing to refer your brand.
Instead of attempting to dictate customer behavior with heavy-handed marketing campaigns, take an authentic approach that incorporates customer preferences from the start. Referral marketing recommendations shared through unique URLs are an easy way to track conversations that spread through the preferred social networks of your customers.
Pit Stop: Need-to-know recommendations are best left up to peers who speak the same language and use the same social networks as your customers.
Prove Referral Marketing ROI
Now that you know how to leverage those high customer satisfaction scores, how can you prove the ROI generated from referral marketing? While some customer engagement efforts are hard to break down to dollars and cents results, referral marketing campaigns create a direct link between existing customers and the new business they drive your way. Consider these questions to get started on a simple cost and revenue comparison:
1. What’s the cost of an average customer?
2. How much money are we investing in incentives?
3. How valuable are our referred customers?
4. What is our target profit margin?
Even though the sharing behavior of your customers will incur a particular incentive cost, referral marketing platforms follow the referral trail of your enrolled customers to determine how much revenue they have generated.
Pit Stop: Leverage reporting capabilities to optimize referral channels just as much as other marketing strategies.
When Customer Experience Meets Referral Marketing
It’s hard to predict the future of the modern customer experience. But one thing is for sure, developing a solid marketing process that engages existing customers and attracts customers is a marketing must-have. Referral marketing technology offers an opportunity to elevate your manual referral program, get insight into customer sharing behavior, and create a direct link between existing customers and new business. It’s time to adopt a win-win strategy that will keep your brand on track amidst the twists and turns of today’s customer journey.