References are not generated, they just happen, right? While many companies believe this, it is a common marketing myth. Most companies assume that referrals happen by chance when someone tells another person about their experience with the products or services they have received. While word of mouth has always been a dark and certainly unpredictable concept, new Internet technologies make it easier than ever to move forward and follow its momentum.
The difference between referrals and word of mouth
Before starting a word of mouth or referral ad campaign, you need to understand the difference between the two. While referrals and word of mouth (WOM) can help promote your business, referrals go further and allow customers to truly participate in the sales process. This participation may include a presentation in person, by phone or by email. And while a referral begins with word of mouth, word of mouth doesn’t always generate a referral.
Successful referral lead generation begins when a marketer or business owner adopts a new mindset about referrals, recognizing the sales potential available through a warm market. A warm market includes those customers, suppliers, or other companies that have worked with you in the past or bought your products or services and had a good experience. Utilizing this warm market, in addition to integrating some kind of customer relationship referral system, promotes successful lead generation and keeps your business going.
Cold clients or warm referrals?
Many companies are too busy chasing customers to take the time to learn how to get customers to chase them. They say that people change for one of two reasons; pleasure or pain. Unless the pain is painful enough, many companies prefer to keep pumping money into ineffective advertising media or buying leads from brokers.
This is especially true for certain industries, such as the mortgage industry, where buying from leads is a mainstay. A potential customer is a person or contact who is unfamiliar with your business and has never bought your products or services before. These potential customers demand the longest purchase process and reaching them is challenging because it requires repeated message saturation to achieve optimal results or customer conversion.
Today, higher advertising costs, increased competition, an excessively saturated consumer market, and lower ROI are causing business owners and marketers to consider referral marketing as an alternative to marketing methods. standard advertising that just doesn’t seem to bring the results that they used to. Which sounds better, a cold track or a warm recommendation?
When statistics show that up to 45% of most companies are chosen based on the recommendations of others, why do companies and marketers keep throwing their hard-earned marketing dollars in a cold market?
The Internet offers hope through interactivity, affordability, and accessibility. New technology resources are available to help support referral generation efforts and facilitate word of mouth. Unlike rising gas prices, we can fight the rising cost of ads by using the Internet to improve customer retention and ease the referral generation process. Satisfied customer advocates are our best-selling asset, and they’re also the best defense against rising advertising costs.
Some ways in which technology can be used to increase referrals and save advertising costs:
ยท Permission-Based Emails: A Vehicle to “Spread the Word”
Recommend a friend links: makes it easy to send information to others
E-newsletters – a simple and inexpensive way to stay in mind
Audio and Video Testimonials – Increase Credibility and Trust
E-Gift Cards – An Efficient, Low-Cost Way to Send and Track Rewards
Affiliate Web Links – Additional Exposure with Reciprocal Referral Partnerships