Research results have shown that referral marketing is more effective than traditional billboard advertisements, TV commercials, etc. Come to think of it. You probably ask the people around you first before you try something new.

You might search online to read reviews. But, you trust the opinion of your friends and family more than that of a stranger online.

As a rule of thumb, people tend to believe word of mouth from their friends and family more than what a TV commercial says. However, besides the general practice, there are several other reasons why referral marketing is currently the most effective way of promoting your products, some of which includes;

The Viral Nature of Referral Programs

We have social media to thank for the viral nature of the referral program. It only takes one of your customers to share your referral program link, and hundreds of their family and friends would have seen it. With the click of a button, you can only imagine how fast it would grow your business over time.

One of your customers shares your link or well-structured write-ups to their social media page. Their followers get to see it, and they click, becoming a customer. The new customer also jumps on the referral program, sharing your link with people on their social media page, and the cycle becomes endless. This cycle means more customers for you.

Creating Loyal Customers

You may not know the length to which your customers are loyal to your business until you create a referral program. However, when a customer can willingly refer your business to their friends and family, they automatically become your brand advocate. They are like your business cheerleaders, rooting for you.

That’s why a well-structured referral program provides such customers with incentives. That’s the way to keep them motivated and ensure they keep coming. When you give a reason for your customers to come back, they become automatically loyal.

Low-Cost Form of Advertisement

Referral programs are a form of low-cost advert. Typically, a social media referral link carries information about your business, logo, or image. Each time a customer shares a link or company information, it is a mini advert for your business. Even when followers don’t click, you’ve left a piece of your business with them.

Besides, each customer usually has the opportunity to add their thought to the business image they share. This feature serves as a form of encouragement to their family and friends to click and check it out. Think about what would happen if about 20 people engage and share your referral program. It can be a big break for your business.

Create a Cordial Relationship

As in customer loyalty, the utmost reason your customer will refer your business to others is that they trust you. So when they refer to your business, they feel responsible and have contributed to your success. The notion changes from your brand to “our brand.”

Cost-Effective Promotion

Because people tend to trust their family and friends more, it makes the job of getting new customers easy. With traditional marketing, your goal will be to target potential customers and convince them about your product. That journey can be long and expensive, given that your target audiences are strangers.

It’s not easy to convince strangers. When someone they know does the job, it reduces your cost. You only need to focus on the information you put out about your business.

Final Thoughts

As a small business owner, you should unapologetically invest heavily in referral marketing. While other marketing strategies are also useful, referral programs will yield better long-term results. You only need to learn how to use the referral program effectively.

Ogundiran Ayodeji is a freelance content creator with and other platforms. He specializes in SEO blog article writing, copywriting, product description, and EBook writing. He is always looking forward to the next writing opportunity.

Referral marketing stock photo by carroti/Shutterstock