Referral marketing
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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
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[edit] Different Types of Referral Marketing
On the web there are multiple referral methods. For example posting the business on a forum or simply sending it to your friends in your professional network and social network. Such sites include XING, LinkedIn, Salesconx and Jigsaw. Another option is to use web-sites focused on referral tracking and bonus distribution. Such sites include Blue Chip Expert, FaceContact, H3 and Zubka. There are also websites that will allow you to insert a referral banner into their directory for a large audience to view.
Referral marketing has many different techniques. It has traditional offline applications. These offline applications have also been optimized for the web.
In the offline world, there are a number of systems that can be used to generate more referrals.
[edit] Different Ways to Get Referrals
Users often obtain referral through exchange methods or advertisement of their links:
- Conga lines have started since these sites came about. A conga line can also refer to an organized system of people trying to acquire enough referrals to get a "free gift" (such as an Ipod or an Xbox 360 from websites run by or similar to those created by Gratis Internet.)
- Referral trading is another common method of obtaining referrals. The process consists in doing a referral on a site for one person with the compensation of receiving an equivalent referral (of the same payout) on the site of your choice. You can do this in a very casual fashion or through the means of a website dedicated to referral trading (such as or RefStop or Referral Swapper).
- Payment for referrals: If desired you can pay someone to complete a referral for you, usually half of they payout of the referral.
- Exchange of anything for referrals is a more uncommon if not eccentric method. One will complete a referral in exchange of any object, such as a game or computer part.
