Your existing customers may be your most powerful assets when it comes to attracting new business. In today’s rapidly evolving business world, it’s time to think about word-of-mouth marketing differently. A 2016 Nielsen study revealed that 80 percent of consumers across industries and purchase categories rely on referrals. Companies can strategically leverage existing relationships to attract new customers using techniques such as influencer marketing and social selling. Here’s a closer look at how this type of marketing evolved, and what role an integrated technology infrastructure and clear digital marketing strategies play in making the most of this opportunity.
Understanding Today’s Relationship Marketing Landscape
In order to leverage existing contacts to attract new business, brands need to start with strong customer relationships. Gartner suggests that successful companies today must embrace a different buyer’s journey: buy – own – advocate. Marketers’ jobs start with the sale. From there, it’s important to create a positive experience as an owner to, in turn, get customers excited about advocating for you. Gartner notes, “When marketers improve the entire customer experience across all three phases, their marketing results amplify and improve.”
Beyond making investments throughout the customer lifecycle, there are highly effective tactics marketers can leverage to encourage current customers to promote their brands:
Influencer marketing: Brands partner with influencers to endorse their products or create content used in social and marketing campaigns. Often, the goal of this type of marketing is for influencers to share posts and images that spark their audience to take action. For example, when a celebrity is seen eating at a particular restaurant or wearing designer clothing, sales often increase. In the same way, influencers can be thought leaders within a specific industry such as marketing or finance, or in a niche area like wedding design or model airplanes. The ROI is high enough that the world’s most influential brands and scrappy startups alike are paying attention. One study found that brands made $6.50 in revenue for every dollar spent in influencer marketing, and 59 percent of marketers intend to increase their influencer-related budgets during the following year.
Social selling: Social media isn’t just for building relationships; it can also help brands sell. One recent study found that 65 percent of consumers learned about products and services on Instagram. Another 75 percent had taken an action after being inspired by a post. Social selling is a natural pathway for marketers to cultivate word-of-mouth advertising. Consumers are already on social networks and connected with brands. When you create content that educates, entertains or inspires them, these customers will organically share that enthusiasm, and the power of their networks will then amplify your own.
How to Promote Customer Referrals
Market to the full customer lifecycle: Brand advocates first buy your product, then own it, and then love it enough to share it. Develop marketing programs that target customers throughout the relationship lifecycle. Examples might include exclusive content and events for owners, tips on how to get more out of products or services, or discounts on future purchases through a loyalty program.
Align your incentives: Incentives play a significant role in getting customers to advocate for your brand. Referral bonuses, discounts, and credits for customers who buy as a result of a consumer’s efforts on your behalf are common. Seventy-seven percent of respondents in one study preferred money, and 18 percent preferred merchandise in exchange for promoting brands. While some consumers will love your brand and promote it naturally through different channels, it’s possible to use incentives to spur them to action.
Empower brand advocates with a mobilizer kit: The Harvard Business Review recently discussed the importance of a mobilizer kit, a tech-friendly resource guide for people who want to advocate for your brand — whether it’s as a B2B decision maker within a company or a more consumer-based promotional program. You can use such a kit to create content that helps answer common questions, overcome objections and even offer a discount to individuals your customers refer.
Acquiring new customers is an essential part of the marketing process, but marketers don’t have to go it alone. As mentioned above, your existing relationships may be your strongest assets in attracting new customers. Focus on delivering value throughout the brand relationship, experimenting with different channels that promote word-of-mouth marketing, and developing incentives that encourage customers to help you promote your business.
Liz Alton writes about digital marketing and her work has been featured in USA Today, Forbes, Inc, Harvard Business Review and Entrepreneur. Her specialties include all things marketing, technology, B2B, big data/analytics, cloud and mobility. She holds a bachelor’s degree in journalism from University of Massachusetts, Dartmouth and an MBA from Western Governors University. She is currently pursuing a master’s in journalism from Harvard University. Liz is a paid contributor to THINK Marketing.