The Whisper Game is a common game people play worldwide, where the players pass on the message of the first person to the last one. This is a fun game where the message gets distorted by the time it reaches the last one but in the e-commerce business, it has been given the name of Referral Marketing with added incentives of discounts and coupons.
We all have friends and neighbours who advertise their favourite shop or products and are happy to be validated for such good choices. We trust them enough to be influenced by their reviews, recommendations and referrals. This is a win-win situation for both the store and the customer.
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Referral Marketing Meaning
Theoretically, this is a word-of-mouth initiative which promotes new arrivals in your colony or on the markets through social chatter and helps you identify potential customers for referral development. This marketing is a tool used by various businesses to spread the word and gain customer bases. This is different from the word-of-mouth strategies primarily led by a company for advertising their products. Social media is another aspect where people broadcast their daily use products, and free marketing is a blessing to the product. However, this process is not amplified as much; sometimes, people love the products but wouldn’t necessarily mention it, resulting in the loss of potential customers. The referral program comes into play when existing customers are rewarded for their service by discounts or coupons.
Why is Referral Marketing Important?
The first point is, it is free marketing. When people are excited about a company’s product or service, they will advertise this without the company’s push. This encourages all businesses to do better and bring in more sales.
Since we trust people around us, we tend to be influenced and bring in 5 percent more sales than paid advertisements. Your customers can have a higher conversion rate based on their social media status or trust, and when there are added incentives for their referrals, they become your brand’s cheerleaders and bring in more leads.
Social media marketing can be incorporated into referrals too, as the content on online media encourages people to spread the word. This is an organic process that happens through daily conversations, and according to Nielson, 92 percent of business recommendations come from our family and friends through the natural word-of-mouth initiative.
Types of Referral Marketing
These are tactics of word-of-mouth advertising and free marketing. They are cost-effective and trustworthy. Customers are more likely to trust their friends more than online reviews or brand advertisements.
For example, Zappos is an online apparel and shoe retailer company. Its buzzworthy marketing was based on word-of-mouth initiative as they went out of their way to surprise customers and upgraded them to VIP status when they heard one of their customers’ foot was injured.
Ninety three percent of B2B companies use referral marketing as customers prefer brand interaction through mail to maintain a formal relationship.
For example, Dropbox sent an email to all its customers offering extra 16 GB of free Dropbox space on bringing in referrals.
It’s a great idea to reward customers who tag their friends along, increasing their brand loyalty. Incentives can mean digital discounts or personalised codes for each customer.
For example, at Bikayi, merchants can offer customer customised codes for each customer as INR 300 off or seasonal coupons.
Whenever we look for hotels to lodge in, we always look at the rating and consider them after three different hotels or more. The reviews left by previous customers influence our judgement to make a decision, hence asking the customers to leave a review after their stay is always a good idea, only if you’re ready to take a few bitter ones.
Social Media Referrals
Businesses must utilise the power of social media as the majority of brand advocates use technology as their first choice so that word could spread through social media through viral campaigns and influencer marketing. This could happen when influencers flaunt your products on their page and you could repost it for their brand – a win-win for both.
Bikayi Referral Program
Bikayi is on a mission to enable every business to sell online and make e-commerce simple for everyone. The merchants can host their offline stores online here and the Bikayi folks will help you with the rest. Here, the merchants also have a referral program for their customers to track the number of referrals and reward them with incentives. Existing customers could refer to the product, which would avail both new and existing customers a whopping discount.
Create a Referral Code at Bikayi
Step 1 – Open your Bikayi App and click on ‘Services’ at the bottom of the page.
Step 2 – Under Services > Select Referral Program.
Step 3 – Click on the Referral option and you will receive a message ‘Create Referral Code’ where you can create an instant discount code.
Step 4 – You could also create a new code by clicking on the cursor of the Referral system. When a previous customer recommends your product, you could give them a commission of INR 300 off, and the new customer would get a 50 percent discount. All these can be set on the merchant’s terms.
These are the steps to create a customer commission code under Bikayi and the referred orders are recorded in the merchant’s tab, which helps them keep track of the customers who are always ready to help.
Referral Marketing strategies have been in existence ever since we’ve had local chatter over tea and discussed the best shops in town. So brands are recommended to not only wait around for an organic process but also treat customers with utmost care, and they would be your personal brand advocates.