If in the 1990s it was enough to hire the star of the moment to guarantee success for a commercial and significantly increase sales of a product, this is no longer the case today. Accomplice to the exponential growth of blogs, forums, review platforms, but above all social networks, the oldest form of advertising, word of mouth, has rediscovered, in the web age, all its effectiveness thanks to referral marketing strategies enhanced with marketing automation.
While more than 84 percent of millennials say they no longer trust advertising, the trend holds true for other age groups as well: according to research published by Nielsen in 2013, recommendations from friends and acquaintances about products and services are considered trustworthy at 80 percent, while opinions and reviews gathered online at 63 percent.
We are faced with a consumer increasingly disillusioned by advertising, looking for information, insights, shared experiences. They are no longer satisfied with the company’s point of view alone, and the tam tam of comments and reviews chasing each other on the web is becoming increasingly decisive in their purchase decision.
Referral Marketing: the new face of “word of mouth”
The labels change, but not the substance: referral marketing, also referred to as “word-of-mouth marketing,” defines a marketing strategy that leverages precisely the “word of mouth.” The product is chosen by the consumer because it is recommended; it is the positive experiences of existing customers that stimulate purchases by new customers, with results that are by no means negligible.
Research conducted by McKinsey reveals that referrals influence an average of 50 percent of purchase decisions, generating sales far in excess of traditional advertising. Also confirming this is a study published in theAMA Journal of Marketing according to which, the effectiveness of a good referral marketing strategy is measured not only in terms of increased sales but in generating more loyal customers.
It is the most loyal customers, those who have had a positive buying and product experience, who turn into the best advertisement for the company, but how can the company step in and influence the whole process?
While quality of the product and service offered are the key aspects from which to create an effective referral marketing strategy, there are a number of activities that can be put in place, including with the help of a marketing automation strategy.
A successful strategy? The secret lies in profiling your customers
n a referral marketing strategy, customers become the real key to success. But how can we identify the best ones to invest in to turn them into true brand advocates?
The secret lies behind an effective profiling and segmentation strategy of one’s customer base. At this stage, the contribution of a Customer Data Platform, such as Blendee, can prove essential in order to identify not only the “best” customers, but also the potentially most attractive ones on which to invest in terms of retention.
Information on browsing and purchasing behavior, analysis inherent in the customer lifetime value of each customer, profiling and segmentation using an RFM matrix, dynamic scoring and much more: the ability to collect and normalize data at a single customer view allows for an extremely detailed overview of every single customer and user interacting with our brand, at every stage of their customer journey and from every touchpoint, both physical and digital.
Customers who buy frequently but spend little, occasional customers who perhaps buy only with offers and discounts, customers who have not bought for a long time or newly registered users: being able to analyze how our customer base is composed, but above all to identify the most numerous and most interesting clusters of users on which to act, allows us to deploy the most effective strategies to retain them and accompany them through the different stages of their life cycle.
Referral marketing and marketing automation: how to create a valuable relationship with the customer
Profiling and segmentation are, without a doubt, the foundations from which to design a referral marketing strategy that can really add value to your business.
If at this stage, as we have said, the contribution of a marketing automation and customer data platform is relevant, it is no less so in the later stages, those that properly concern the grounding of activities.
If the ability to turn a customer into a true brand advocate cannot be separated from the creation of a valuable relationship between company and consumer, the role played by personalization of the customer experience is easy to see.
Sending tailored communications, personalization of the browsing and purchasing experience with messages and product offers in line with the consumer’s interests and needs, but that’s not all: a marketing automation platform offers solutions and tools that can engage and reengage the user, delivering the right message at the right time.
From the point of view of referral marketing, the contribution of a marketing automation strategy is essential, especially in the recall and follow up phases on the customer: let’s imagine sending a customer who has purchased a product a few days ago an invitation to share it on his social profiles in exchange for points to be accumulated on the loyalty card he has just signed up for, or to an already loyal customer, let’s imagine offering the possibility of inviting a friend in turn in order to obtain a discount on the purchase of a product for both of them. Again with a view to recall, we also imagine being able to offer the user the opportunity to give feedback once they have contacted customer care or perhaps to give a review on the product they have just purchased. Incentives of this kind, which form the heart of a referral marketing strategy, can be easily managed through customized and automated workflows.
Although many eCommerce platforms already provide basic functionality of this kind, and there are specific platforms in the referral marketing field on the market, the added value of an all-in-one platform lies precisely in the possibility of combining the input phase, i.e., the comprehensive collection and analysis of customer data, with the output phase, i.e., the possibility of personalizing the customer experience and creating strategies of customer loyalty, first, and referral marketing, then, truly effective.
Referral marketing: ideas for a successful program
Referral marketing can be an interesting marketing strategy to integrate, but like any strategy it needs careful planning and activities that can be easily measured. There is, as is often the case, no one-size-fits-all recipe, and the most effective activities, including marketing automation, are obviously to be researched starting with an analysis of one’s audience and the characteristics of one’s business.
However, here are some easily implemented ideas for an initial referral program:
- Loyalty points in exchange for particular activities (issuing reviews, sharing products);
- CASH BACK;
- Discount coupons to be used as a result of a friend’s invitation;
- Access to special content perhaps downloadable online;
- free shipping.
So, green light to building your customer loyalty and successful referral programs with the help of a marketing automation strategy!
