Referral marketing, also known as word-of-mouth marketing, is a strategy that encourages individuals to promote a product, service, or brand to their friends, family, or colleagues. It harnesses the power of personal recommendations and incentives to drive customer acquisition and increase brand awareness.
Significance and Usage Referral marketing
Referral marketing leverages the trust and influence of existing customers to attract new customers. By incentivizing referrals and providing rewards for successful conversions, businesses can tap into the social networks of their satisfied customers, resulting in cost-effective customer acquisition and improved brand reputation.
Example of Referral marketing
For example, a ride-sharing company may offer existing users a referral code to share with friends. When a new user signs up and takes their first ride using the code, both the referrer and the new user receive a credit or a discount. This incentivizes existing users to promote the service and helps the company acquire new customers.