As a marketing agency in Miami, we’re aware that small businesses want to promote their products and services. However, budget constraints cause small businesses not to advertise. One way to solve the problem is through referral marketing. What is referral marketing? Referral marketing is a method of promoting products or services to new customers through referrals, such as word of mouth. We offer three benefits of referral marketing which grows your business without breaking your budget.
You’ve Pinpointed Your Target Audience: Your Customers
With traditional advertising programs, small businesses use demographics to target prospects. By targeting prospects, you’re trying to convince them to use your brand. However, referral marketing precisely targets your audience: your customers. The goal of referral marketing is to encourage your customers, via incentives, to sign family members, friends, and social media followers. As a marketing agency in Miami, we offer statistics on how your customers can exert social capital into brand capital:
- 92% of respondents trusted referrals from people they knew.
- Every referring customer makes an average of 2.68 invites.
- The lifetime value for a new referral customer is 16% higher than non-referrals.
By using your customers, you’ll eliminate unqualified leads. Unqualified leads cost small businesses money and decrease conversion rates.
It’s Cost Effective: You Have the Marketing Materials Available
When you advertise to prospects, you use offline and online media to gain leads. Businesses create banner ads, pay-per-click campaigns, or television commercials to garner interest. However, with referral marketing, you have the marketing materials at your disposal. Do you communicate with your customers via email? What about business cards? We give three ways to use your current media to promote your referral program:
- Customize an email to your current customers which presents a refer-a-friend program. In addition, offer a non-cash incentive. A non-cash incentive, such as a discount or a gift, is 24% more effective than a cash incentive.
- You can put a refer-a-friend on the back of your business card.
- Use your receipts to promote your referral program.
By using email, business cards, and receipts, you save money on advertising and increase your brand awareness.
Referred customers received recommendations and information from their friends or family members about products and services. When products or services solve problems for their friends, referrals believe that they do the same for them. Referred customers don’t focus on price. Referrals gained your confidence and trust because of recommendations. With referred customers, conversion rates improve which increases revenue.
As a marketing agency in Miami, we know that customer acquisition is crucial for small businesses. Referral marketing increases customer acquisition by leveraging social capital into brand capital. Remember, referral marketing still requires customer engagement, creativity, and dedication to make it work.
https://www.referralsaasquatch.com/17-referral-marketing-statistics/ Referral Saasquatch
https://hbr.org/2011/06/why-customer-referrals-can-drive-stunning-profits Harvard Business Review