Referral Marketing is a proven method of advertising. Referral Marketing is a systematic process that takes word of mouth business to its highest level It "ferrets out all those unpredictable, hidden, complex connections that exist between people in everyday life and in business." [1]Approx 80% of companies obtain 70% of their business through word of mouth from satisfied customers and contacts. Word of mouth is generally spontaneous and is achieved by businesses without any form of structured strategy.
Referral Marketing is a structured and systematic process that maximises word of mouth potential. Referral marketing does this by encouraging, informing, promoting and rewarding customers and contacts to think and talk as much as possible about their supplier, their company, product and service and the value and benefit the supplier brings to them and people they know.
Referral marketing takes word of mouth from the spontaneous situation to a proactive and highly productive solution, where maximum referrals are generated due to professional customer focused strategies.
People, typically users of a get-paid website, are encouraged to refer their friends (or indeed anyone) through a personal referral link, which would look something like: www.getpaidsite.com/?referrer=NAME, where NAME is the username of the referring user. The user then earns an equivalent percentage of what the referral earns.
There are various models of referral marketing, one of the most powerful comprises;Presentation: When a company presents itself as best qualified for referrals through the high standard of its product/ service, the value and benefits it provides customers and customer service and care.
Planning: The supplier company has a systematic and structured approach to referral marketing, which includes a referral marketing plan and budget, also professional database, CRM and strategic customer care programmes.
Strategy: There are approx. 105 referral marketing strategies under 10 main headings which include; strategic customer care, referral program, customer communication, alliances and joint ventures, networking, endorsement, hospitality, agents & affiliates, incentives, loyalty program and traditional strategies |