Millions of dollars are spent collectively by thousands of businesses across the United States every year. As the economy is still struggling through the recession, however, business owners are looking for effective ways to save as much money as possible on marketing to maintain large profit margins.
While the overall costs associated with running an eCommerce business are much less than running a traditional brick-and-mortar company, finding an effective online business can be more difficult.
This is one of the main reasons why online business owners rely heavily on customer referrals to increase annual traffic and sales.
Using the Trust Factor in Marketing
People are more likely to trust their friends and relatives than most companies and pay more attention to recommendations coming from these people than anyone else. Studies have confirmed that 92 percent of consumers trust these referrals more than traditional advertising overall, according to Daily Business News. As an eCommerce business owner, it is important that you become highly skilled at using the referrals and recommendations generated by your customers as an effective eCommerce marketing strategy.
Long Term Benefits from Referable Customers
Along with the short term benefits of increasing the number of sales generated in your business, referrals can also provide greater benefits in the long term as well. This is mainly due to the fact that customers referred to your company by trusted individuals who were pleased with their experience with you are more likely to come back and give you repeat business in the future. Referral customers have a 16 percent higher lifetime value than other customers, according to a study by the Wharton School of Business. Therefore, satisfactory customer service plays a key role in the overall success of this particular type of marketing.
Shifting Positive and Negative Feedback
Keep in mind that customer referrals can also be very effective at driving traffic away from your business if the feedback provided via these people is overall negative. As the old saying goes, negative information seems to travel faster and farther than positive information. how many positive referrals your company probably already has. Strive to ensure that you are focused on providing superior customer service every day.
Provide Incentives for Referrals
To make the most profit from this form of ecommerce marketing, provide customers with incentives that will motivate them to actually want to refer as many people as possible to your business. One study confirmed that more than 80 percent of satisfied customers are willing to refer a company to people they know, but less than 30 percent of those customers actually follow through on the request, according to BuzzReferral.com. Using giveaways and contests and offering discounts and coupons for future sales can generate a large number of quality referrals and recommendations, because your customers will be more interested in what they can personally gain by doing so.
