What Makes Referral Marketing Such A Powerful Business Tool


There are numerous studies that clearly establish the fact that referral marketing is the ideal form of marketing in online business when the focus is on sales and conversions. This type of marketing which is also popularly known as word-of-mouth marketing is a process by which consumers purchase after being influenced by the opinion of a third party.

Marketing professionals say referral marketing is a powerful marketing channel because buying decisions are made by customers on the opinion of people they trust. The influencers could be family members, friends, famous personalities, icons or social media idols. There are many reasons why referral marketing in online business is regarded as one of the most effective business tools.

Precision Targeting

The key ingredients of a successful marketing campaign include a powerful message and precision targeting. Referral marketing is always sharply focused on the targeted audience because there is a solid connection of trust and faith between friends and social audiences. This underlying faith allows you to spread your brand message more effectively than with other online marketing tools.

Wider Reach

The average reach of a typical consumer was limited a few years ago. Their circle of influence was largely limited to the number of people they saw and interacted with on an average day. Today, with the internet making deeper inroads and social media channels becoming a raging hit among web users, the reach of consumers has increased dramatically. It is definitely not an exaggeration when marketers say that a few influential social media users now have the power to make or break a business just by voicing their opinion about a product, service or company on Facebook or Twitter.

Easy Magnification of Brand Image

Consumers nowadays decide which movie to watch, or which TV show to watch or even which restaurant to visit based on the suggestions and opinions voiced on the web by influencers. It makes sense because end consumers themselves are eager to share stories about the products they bought or the service they used or the brands they choose. The impact it has can be magnified many times over when the buying experience and products are exceptional.

A simple Facebook post, a tweet on Twitter or a photo uploaded on Instagram can now reach thousands of consumers within minutes and can get shared to many times that number. It can lead to large scale exposure of your products/services and help in influencing buying decision among hundreds and thousands of users. The growing social reach of consumers is the key reason why referral marketing has gained reputation as the most powerful marketing tool for online businesses.

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