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Referral Marketing is Underrated in Successful Businesses

Referral marketing, also known as word-of-mouth marketing, is the practice of encouraging and incentivizing existing customers to recommend a product or service to their friends, family, and colleagues. Despite its potential to drive significant business growth and increase customer loyalty, referral marketing is often underrated and underutilized by many successful businesses.

One reason for this is that referral marketing is often seen as a passive strategy, where businesses simply wait for satisfied customers to refer their friends and family. However, effective referral marketing requires a proactive approach, where businesses actively encourage and incentivize customers to share their positive experiences with others.

Recently, at one of our networking groups we invited a guest to attend one of our meetings who in turn invited a guest who did a large number of sales transaction after the referral meeting. The success of the sales was attributed to the person’s skill of following up yet it was the referral activity that brought forward the sales opportunity.

However, research has shown that referrals can be one of the most effective ways to acquire new customers and build brand loyalty. According to Nielsen, 92% of consumers trust recommendations from friends and family more than any other form of advertising. Additionally, customers acquired through referrals have higher retention rates and are more likely to refer others themselves. BforB’s international activities have produced transformational organizational opportunities. Everyday around the world millions of films, food, podcasts and the like thrive because of your recommendations… let your business be one of them.

Great example are music festivals. A person that attends a festival invites his or her best mate to share the moment with him or her. The friend attended yet invites a friend that subsequently suggested to invite his or her friend that brought a friend. Cinemas benefits from this buying behaviour and most restaurants or holiday industries.

It can work for your business too given a definitive structure.

In conclusion, referral marketing is a powerful tool that can drive significant business growth and increase customer loyalty. Successful businesses can maintain competitive edge with continued implementation of proactive referral marketing strategies as part of integrated marketing approach.

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