With society’s explosion into an information age, many businesses find it difficult to stand out and be heard amongst customers. Why do referral programs propel your business forward? Read on to find out more.
How powerful are referral programs?
Firstly, referral programs pave a way for your business to create brand awareness — the first touch point in your customer’s decision journey. With so many businesses vying for customer attention, having your potential customer’s trusted relative (or friend) recommend your brand puts you at a cut above your competitors. A Global Trust in Advertising Report by Nielsen found out 82% of people on average trust recommendations from people they knew. This pales in comparison to other advertising campaigns, which had significantly lowered trust levels from about 38-61%.
Referral programs also result in new customers being more loyal. According to a Harvard Business Review, referred customers were found to be approximately 18% more likely to stay with that brand, and were estimated to boost profits for that brand by 16% . Loyal customers are very important for your business because when you build relationships with this group of people, they can bring in more new customers when incentivised correctly!
Benefits of referral programs for your business
Less work and time spent on your advertising campaigns. Everyone needs more time, most businesses included. Motivating customers to bring in more customers can save your time and effort from running exhausting advertising campaigns.
Reduces customer acquisition cost. Acquiring new customers can be one of the costliest things to do today, given the diversity of brands available and the short attention spans of customers. With referral programs however, you can avoid a costly advertising campaign through your customer’s word-of-mouth recommendations. As Larry Myler, CEO and Founder of By Monday wrote on Forbes: “Word-of-mouth advertising is the least expensive and most effective method of getting the attention you’ve always hoped for.” This can definitely help your business save valuable resources and generate greater returns on investment
Create Referral Programs
Vouchermatic provides a simple and easy way to create referral programs. With Vouchermatic you can execute a “Two Way Incentive” strategy or a “One Way Incentive” strategy.
What does that mean?
1. Two way Incentive strategy: This is what most of the popular brands do today. Let’s take the example of GRAB or UBER services. You refer your unique code to your friend to download the app, once your friend downloads the app both of you get a promotion code to use in your next rides.
This is a two way incentive, where the incentive is offered only after the referral code is used by your friend and the intended action is validated.
2. One Way Incentive Strategy: This strategy helps incentivise the new customer who has been referred possibly by an existing customer.
Let’s use the F&B industry as an example here. Imagine you dine at ‘restaurant ABC’ and you love it. So you refer it to your friend/relative using their referral program. So in this case the friend/ relative who has the referral code/voucher will be able to avail the discount when they dine at ‘restaurant ABC’ next.
If you are finding ways to cut your advertising costs and want to start your own referral program, why not take that leap with VoucherMatic today? For more enquires on what we can do for your business, reach out to us on [email protected]