Rethinking Referral Marketing (Part 3)

I started thinking about my own experience as a customer of many brands. I could not recollect a single instance of a brand pro-actively asking me to recommend others who could become customers. Yes, there would be some link in the app which would give me a referral code or link to send to others. But that didn’t really seem anything exciting. None of the referral programs seemed interesting enough for me to actually talk to others.

And yet I would talk to others about new products that I bought and liked. A case in point was this Yeti Blue microphone that I bought after being attracted by the lovely clickbait headline from a Wall Street Journal article, “How to Sound Your Best on Calls From Home?” I was so thrilled with how my voice quality improved (to others) that I would immediately show them the secret – my new microphone. Not surprisingly, at least five others bought the same microphone! I did all this on my own – unknown to Yeti, and with no financial incentive for myself.

As I thought about my own buying and recommending behaviour, I realised that I do get influenced by what those close to me recommend. It could be books, movies, restaurants or even vacations. Word-of-mouth marketing is a key factor in many of our purchase decisions. And yet the world of referral marketing (like that of loyalty programs) has largely stayed the same through the years.

Few brands that have a relationship with me (and many don’t) actually have reached out to ask me whether I would recommend them to people I know. Perhaps, I would not – there is always a social awkwardness in doing so. And yet, we do it quite often. As a result, referral programs tend to have a one-size-fits-all approach for the lowest common denominator. That’s where I felt they were all making a big mistake – by not creating a program for their best customers, they were missing out on an amazing acquisition opportunity. So, how could it be done better?

Tomorrow: Rethinking Referral Marketing (Part 4)