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Why Referral Marketing Keeps Word of Mouth Positive and Effective

2 minute read

Viral marketing was once the most talked about method in online marketing circles. It’s understandable. What better way to get millions of people simultaneously talking about your brand than by leveraging social media’s mass exposure? There’s just one problem: Once a message goes viral, the online discussion is entirely out of a company’s control.

Positive word of mouth outpaces negative by a 6 to 1 ratio. But with the reach of social media being what it is, even one negative review can be catastrophic to a brand’s success.

Enter referral marketing. It’s a way to not only leverage the powers of viral marketing, but also ensure that once your message is out there, the word of mouth discussions stay positive.

The differences between the two strategies are a bit nuanced, but very significant. With viral marketing, the focus is placed on the spread of a message—how many people can we reach in any possible way? Referral marketing focuses on the quality­—how many of the people we reach with our message will convert directly to sales?

A 2010 study found that while 83 percent of satisfied customers were willing to refer a brand, only 29 percent actually did so.

While selling a great product and building brand awareness are keys to the success of any business, the experiences customers have with your brand—both emotionally and financially—will ultimately lead them to become brand ambassadors.

The incentive-based nature of referral marketing encourages a specific customer behavior—sharing your brand with friends, family members, and industry peers. With an effective referral program, you can tap into the sizable amount of satisfied customers who for one reason or another aren’t talking about your brand post-sale.

A referral marketing program also remains customer-centric, meaning a brand ambassador has a personal stake in encouraging a potential lead to convert into a sale. Remaining positive is a two-sided benefit.

Along those lines, referral marketing is always targeted to a specific segment. This means you aren’t badgering social media users with unnecessary posts, but providing real value to your online community.

With all of these considerations in mind, you’re still reaping the rewards from effective viral marketing as well. Word of mouth doesn’t end online—it has ripple effects that extend across your entire network, both online and off. Happy customers are vocal customers, but giving them an incentive to talk amplifies their voices even further.

So referral marketing is viral, effective, and always positive. What’s not to love?

Do you want to learn how to turn more of your customers, partners, affiliates, and fans into revenue generators?Request a custom demo from one of our referral marketing software experts today!

Posted in Referral Marketing

Jeff Epstein

Written by Jeff Epstein

Jeff Epstein is the founder and CEO of Ambassador Software, the World’s #1 Relationship Marketing Platform which enables brands like Hulu, SAP, Hewlett-Packard, HubSpot and Madison Reed to build & scale referral, affiliate, partner and influencer programs.

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