What is referral marketing? How to start business with referral marketing.

 What is referral marketing? How to start business with referral marketing.

What is referral marketing?

Referral marketing is spreading the word about a product or service through a business existing customers, rather than traditional advertising.

Referral marketing produces the same effect, but is initiated and directed by a business. there's usually some form of incentive or reward offered for customers to refer other people. for example, directive customers who refer a friend that sign up for their service receive $100 in bill credit and the newly referred customer also receives a $100 credit.

Referral Marketing Strategies:-

1) Asking for referrals :- This simple and effective strategy involves mentioning a referral program to as many customers as possible. A computer repair company used this strategy effectively by stamping “We Crave Referrals” on every paper customers received including newsletters, marketing material, and invoices.

2) Employee training:- In conjunction with asking for referrals, many companies have a training process that equips employees with the knowledge to effectively market the referral program to each and every customer.

3) Joint venture referrals:- Some companies partner with complementary businesses to cross-promote to each other’s customer bases. This strategy involves each business offering discounts or other incentives to customers from the referring company, typically in exchange for a percentage of sales from referred business.

Who impliments referral marketing?

Referral marketing is employed by a wide variety of businesses. These strategies can be effective for companies ranging from small single-owner and entrepreneur companies, to large corporations in nearly any industry. Many businesses that offer products or services can implement referral marketing campaigns.

Some types of businesses that typically employ referral marketing include:-

1) Retail stores

2) Specialty stores

3) Restaurants

4) Automotive service companies

5) Airports, hotels, and travel agencies

6) Banks

7) Health clubs and gyms

8) Doctors, dentists, and health professionals

What kinds of customers are effectively marketed to with referral marketing?

Because referral marketing has so many potential benefits, this type of marketing strategy can be customized to reach a variety of target demographics.

Businesses must ask themselves: Who is motivated to refer business to us? Customers are more likely to refer friends and family when there is an incentive like a reward.

The more rewards a business offers for referrals, the more effort their customers will put into finding quality referrals. AT&T Wireless offers a referral program that provides opportunities for customers to earn up to $575 a year through referrals for different services, including high-speed Internet, home phones, wireless phones, and their U-verse packages.

How is a referral marketing plan developed?

Research is an important first step for any marketing strategy. With referral marketing, initial research will often include discovering what customers want. If the incentives are worthless or undesirable to the company’s existing customer base, the customers aren’t interested enough to participate in the referral program.

This initial research could be done in a number of ways. Marketing personnel might study the buying habits of their customers to find out what products or services they enjoy the most, and offer either discounts, free products, add-on services, or bill credits, depending on the type of industry.

Another way companies research what consumers want is through customer surveys. Most of these surveys simply ask the customers what rewards or incentives would be most likely to get them to participate in a referral program. Marketers brainstorm a list of possible rewards to include with surveys, and also ask customers to offer their own alternatives.

Marketers must also plan the procedures for crediting referrals, the number of referrals needed to claim the reward, and any other tools for proving that the referrals actually happened. For example, phone service company Vonage offers two months of free service for each successful referral, and one month free for the new signup. To track which customers should receive referral credits, the company provides a separate signup link for the Refer-A-Friend program, and new customers enter the phone number of the person who referred them during the signup process.

The next step in a referral marketing strategy is to publically market the program. Some businesses place signs in physical stores, typically near the cash registers that invite customers to join the program. A common strategy is to create brochures that customers can take with them, containing information about the referral program, offering consumers a physical reminder of the program.

Internet marketing is also a popular way to spread the word about referral marketing programs, both for physical and online businesses. This can be done through e-mail marketing campaigns, banner advertising, or even e-mail signatures with links to a referral program sign-up page.

When the referral marketing program is in motion, the company’s marketing department engages in continued marketing exposure for the program, as well as follow-up activities to track the success. Usually this process involves figuring out which strategies are generating the most referrals, and concentrating efforts on the best strategies.

How much salaries of referral marketers?

1) As a Advertising Manager

Median income: $103,350

Top earner: $186,630

2) As a Marketing Director

Median income: $126,190

Top earner: $166,400

3) As a Marketing Consultant

Median income: $75,000

Top earner: $109,900

I hope you can learn basic information about referral marketing, if you face any problem about referral marketing then drop a comment.

Thank You 😊.