Referral Marketing: the best way of promotion for Startups
Choosing a marketing strategy is always tricky for startups. They want their promotion plan to be easy to set up, execute, and track. They do not want their marketing efforts to cost them heavily, either because startups usually have modest finances and human resources. That’s why referral marketing is the best way of promotion for them. Let’s understand how.
The promotion that takes place when products/services are recommended by users to others is known as referral marketing. People talk about stuff they use with people they are acquaintances with. Whenever a person that you know recommends a thing to you, the recommended entity automatically gains the trustworthiness quotient. Startups being new entrants in the market do not have an established image. That makes it difficult for startups to gain customers’ trust. That’s why referral marketing is a very good way for startups, as the goodwill that the potential buyer has for the person who recommends acts in the manufacturer’s favor.
Running a referral marketing campaign is less expansive as compared to other ways of marketing, like putting up ads on social media or using billboards. Advertisers have to pay for merely displaying ads no matter the ads work or not. All that the advertiser needs to do for a referral marketing drive is to devise a scheme and create functionality for it online.
For example, create functionality using which your customers can share a link to your website. If a new user visits your site and makes a purchase, the customer who shared the link gets rewarded in some way. Creating such functionality would be a one-time cost. Once the set up is complete, then it does not require human resources for execution. Customers interact with your website/ social media account wherein you have set up the campaign functionality. So, there is not execution cost as such. The available human resource can be utilized for other productive work.
It is possible to set up referral marketing campaigns in such a way that money is not wasted. The customers that refer your offerings are awarded only when the person they refer the product to performs the action you want. So, there are no passive expenses, as in the case of putting up online and billboard advertisements.
Generally, startups have shoestring budgets, and expenses are a major concern for them. So, having a marketing strategy that does not cost much is helpful.
Referral marketing campaigns are usually run online. The customers who refer and the potential buyers to whom the product is referred interact with the advertiser’s website or other online presence. Pretty much everything that happens with your website or online account can be tracked these days. Ready statistics are available about every single online activity that occurs with your online presence. That makes it easy to analyze and measure your campaign. Startups generally face crunch when it comes to human resources, so having ready insights into your camping is great for them.