Basic marketing theory offers that word of mouth marketing is one of the most effective, and least expensive, forms of business promotion. Word of mouth marketing occurs any time one of your current customers or clients recommends your business to someone else, who then, on the basis of that recommendation, decides to visit your business as well. Lead generation (getting the potential customer to walk through the door) is often the most time-intensive element of marketing. Once the potential customer has chosen to "walk through the door", it becomes much easier to convert them to a paying client.
In this form, word of mouth marketing costs almost nothing to implement, and if your business is continually recommended, it, obviously will continue to grow.
There are several forms that this marketing by referral program could take. One is that of "refer a friend", which, as it sounds, is based on the idea that your current customers can be rewarded for referring their friends to your business.
When considering the implementation of this kind of marketing strategy, there are several issues that must be considered. First, consider the lifetime value of a business customer. This value is computed by multiplying the income received by the number of times in a year it is received by how many years the customer remains in your business. For a business consultant, for example, the income received might be $400 per hour, the number of hours per year might be 100, and the average length of the client relationship might be 10 years. So, for the consultant in this scenario, the lifetime value of a customer would be $400/hour x 100 hours/year x 10 years = lifetime value of $400,000. This figure represents the amount that the business can spend to attract and retain a client and still remain profitable. It also implies that if the business can attract and retain clients for less than this amount (such as using a marketing by referral program), the business' profitability can increase significantly.
The first step in setting up a marketing referral program is to understand the lifetime value of your customer. This will indicate how much should be spent to attract new customers.
The second step is to tell your existing customers that their referrals would be valued and appreciated. A simple way to begin is to include a statement about this on all customer-facing materials, including brochures, invoices, and receipts. Many businesses create special "tell a friend" cards, which allow someone to gift a friend with a service or product.
For example, a beauty salon may create "tell a friend" cards, and ask their current customers to pass these out to friends who might want to try the salon. In this model, the current customer is able to be generous by sharing a "gift" with a friend, who may, ultimately, sample the salon and decide to stay on as a customer. For the price of a printed business card, and the cost of the service or product, businesses can generate hundreds of new leads, very cost-effectively. The key to this strategy, though, is that the business must offer a product or service with high perceived value and low actual cost. An example might be a free haircut, or a mini-facial, or something similar.
The third step of this process is to define an internal system or structure for rewarding clients for their referrals. The higher the price points in your business, the more generous the rewards should be. Consider creating a rewards schema which gives customers greater and greater rewards for every two or three new customers referred. Following through with the beauty salon example, the first referral might entitle the referrer a free haircut, but the tenth referral might entitle that referrer to a full spa treatment.
Keeping track of referrals may be best done in some kind of database or with customer tracking software. Build a referral tree to understand which customers are referring the most new business. Be sure to thank them promptly for their first referral, and don't forget to continue to reward them for sharing your business with others.
No matter what kind of business you run, a referral marketing program can increase profitability.
Viral marketing makes use of the tendency of a person to share something they find informative, entertaining or amazing. Many companies bank on this behavior to spread their products and increase the popularity of their company or their website.
Viral marketing makes use of many mediums in enticing this behavior. It might be in the form of an interesting story, an addicting flash game, an amusing video and many others that may catch a person's fancy.
This ingenious form of marketing is typically low cost and is a wonderful tool for any company to utilize. The benefit greatly overshadows the cost or efforts to initialize this marketing scheme. Any website would greatly benefit from viral marketing.
One of the easiest methods in viral marketing is using a tell a friend script. This is a simple programming script that you can attach to the programming of your website.
Generally, tell a friend scripts are installed in pages where a media is placed so that a person can easily send the media to any of his friends or his family members.
The basic concept of a tell a friend script is a script wherein a person may input his name, e-mail address, the recipient's e-mail address and send the media to the intended recipient much like an e-mail with an attachment. As the recipient receives the e-mail he wouldn't think of the mail a spam mail because he would see the sender's name as someone he or she knows and trust.
Tell a friend script eliminates greatly the chances of being blocked because they use the information inputted by the sender. This allows for wider spreading of this marketing method. It can be quite sneaky but it is very effective.
With the e-mail sent and opened the sent media will either be read, viewed or played. Also along with the mail would be a brief description of the company or site that sponsors the media sent. This allows for the introduction of either the site, company name or its products. Then along with it is another tell a friend script.
Then the process begins again. As more people use the tell a friend script, more and more people will know of the existence of the sponsoring company or site. People who read the ads inside the mail who liked what they see would go and click on the link and visit the site. This drives traffic into the site resulting to great number of potential customers.
A tell a friend script is very simple and does not require a complicated method of programming. In fact, you can copy paste a script and simply put it on an intended page. Finding one is even simpler. All you have to do is go to a search engine and type in the search box ?tell a friend script? then press enter or click go.
In the search results page you will see many links that will direct you to a site where you can get a tell a friend script. It would just be a simple matter of looking and searching for the script and copying it to your intended web page.
With a tell a friend script viral marketing strategy you can drive traffic into your site which could potentially spell profits. This is a simple harmless script that offers great benefits for low cost paired with great creativity and foresight.
It is imperative that you have patience in using a tell a friend script. If your chosen media doesn't get the mileage that is expected of it, it may take some time before it gets spread or shared. But surely many people will see your ads and there is great probability that they will visit your site increasing your traffic flow.
Both Ian Williamson & Ninindi Johnstone are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Ian Williamson has sinced written about articles on various topics from Guide Guitar, History and Sports Car. For more by Ian Williamson please visit. Ian Williamson's top article generates over 74000 views. to your Favourites.
Ninindi Johnstone has sinced written about articles on various topics from Cars, Site promotion and Affiliate Programs. Increase your chances of a virally explosive tell a friend script with capabilities for contests and more.