Let’s continue our discussion of how effective and value-added customer referrals can be for a small business and the customers themselves. Knowing that we often seek advice from others when it comes to purchasing goods and services, the sheer amount of search time, expense, frustration and sometimes anxiety factors that a typical consumer faces makes using customer referrals exponentially beneficial. Small businesses also benefit tremendously from receiving customer referrals because it often lowers their overall customer acquisition costs, improves their profitability and often increases customer loyalty and lifetime value.
Many consumers have come to distrust traditional advertising because they know and understand that advertisement are inherently biased. Nothing can take the place of a honest opinion, good or bad, when it comes to vetting a business and getting firsthand knowledge of the type of customer experience to expect. Ninety-two percent (92%) of consumers trust referrals from those they know and trust. So it goes without saying that if you can get an unbiased appraisal of a business that you are interested in transacting, a customer referral from a trusted contact would be the best and most honest solution. Here are some more interesting statistics pertaining to customer referrals and why they are so impactful:
- More than 50% of people are likely to give a referral if offered an incentive, social media recognition, or access to a loyalty program.
- A referral program with an incentive/reward can incite more than 50% of people to refer new customers to your business.
- 69% of consumers are more likely to try a brand/business if they give rewards.
- 64% of consumers believe a referral program’s rewards will impact how much they spend.
- 81% of purchasing decisions in the US are influenced by friends’ and family members’ social media posts.
- 67% of consumers say they’re more likely to purchase a product or engage a business if a family member or friend shared it on social media.
- 71% of consumers are more likely to make a purchase or engage a business based on social media referrals.
- 97% of people read online reviews of small and local businesses.
- 79% of consumers trust online reviews as much as a personal recommendation or referral from a friend or family member.
- 94% of consumers report that positive reviews make them more likely to contact and use a business.
- 70% of consumers give more credibility to online reviews and peer recommendations and images than professionally-written content and ads.
- Four out of five consumers will change their minds about a business and their purchase decisions based on negative reviews.
The aforementioned statistics speaks directly to the power and influence of hearing and receiving credible information from those we trust. So if we know that customer referrals can be powerful and speak truth to customer experiences, how do we get more people to give them? The old school “Word of Mouth” method has always been around and has always been reliable but it is not formal and oftentimes doesn’t give the small business a viral vehicle in which to present an offer for a customer referral such as a discount on the next purchase for sharing the good news with another about. What I have found as a seeker of understanding is the 2nd most common pain point for small business owners, which is customer acquisition, and how do they go about effectively getting the word out about their business. Many have stated that they would like to have a customer referral program beyond remembering to ask. customers to tell their family and friends, but to have a system that can be tied into how people are already communicating. If you think about modes such as email, SMS and social media, the vast majority of society are using these tools to regularly communicate with their contacts. A recent marketing study found that only about 11% of small business owners actually ask for a referral although 92% of them rely on referrals for new business.
It’s not surprising to see the statistics on customer referrals and why they are so important. I’ve created Dealium to be a disruptive technology. Disruptive Technology is a new and innovative way of doing things originating from other methods or ways things were done in the past. It does take a little time for disruptive technology to take hold because people are often resistant to change. The innovators and early adopters are often the first to try something new. Once the early majority sees that something has taken hold then often enter the mix. Next come the late majority and lastly the laggards or non-adopters. When Dealium launches, our company will introduce this solution to business owners who are comfortable using technology and will see the vast benefits of having a referral marketing application that can be up and running in a matter of minutes and has viral implications for their business. In the end, users have to see the benefits in terms of time or cost savings in order for them to adopt to a new way of doing things. Think about all of the innovations that have happened in society over the years and how they have affected you in different ways. Dealium addresses the way people share information about small businesses they enjoy patronizing and supporting. Dealium offers a way for small business owners to get the word out about their business, in a viral and exponential way, with an incorporated referral reward system.
Dealium is a SaaS B2B Referral Marketing Technology Platform that directly connects small businesses with new customers by leveraging their existing customers through our proprietary algorithm-based referral code sharing technology incorporated with the customer’s SMS, Email & Social Media. Dealium creates brand awareness, brand exposure & new customer acquisition opportunities for our business subscribers while allowing their customers to save time, money & oftentimes frustration searching for reputable local small businesses.
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