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Could Launching A Customer Referral Program Be Key To Buffer Your Business Against COVID-19?

While, sadly, some businesses won’t make it through COVID-19, others are adapting. They’re finding new ways to position their brand, pivot their offering, or simply reach new audiences.

It’s this latter point where referral marketing plays a key role. 

With people spending more time inside than ever, the vast majority of consumer spending has moved online. For brands willing to take the plunge, this digital boom presents a real opportunity to leverage incentivized rewards and start building new business despite the crisis.

Could it be that, even in a world which forces people to be apart, it’s them coming together which contacts your business a lifeline?

Let’s find out.  

Referral marketing: the bigger picture

Before we get too deep into the tactical stuff, let’s first zoom out and consider the bigger picture.

What are referral programs, and why have they become such popular promotional tools?

In a nutshell, referral marketing is an evolved form of word-of-mouth promotion. Put simply, if someone refers someone else to use a product or service, the referrer receives a reward of some kind — most often a financial incentive. In the case of two-way referral programs, both parties get a kickback.

Referral marketing is rapidly becoming a go-to tactic for marketers across the world. In fact, surveys suggest that 60% of marketers believe that referral marketing generates more leads, while 78% of B2B marketers believe those leads are of a higher quality

Long story short? Referral marketing works.

3 ways a referral program could boost your business through COVID-19

With introductions done and dusted, let’s get to what matters: the practical advice.

Here are 3 reasons why referral marketing might be your secret weapon for surviving COVID-19.

#1: Customer loyalty and the power of social proof

The coronavirus crisis has had a couple of interesting effects on consumer behavior, including a significant (and perhaps predictable) surge in social media use.

As businesses move their focus to the online space, social media becomes a critical touchpoint for customers — and it’s here we find the concept of social proof. Essentially, if consumers see their friends engaging with and making purchases from certain retailers, they’re far more likely to do the same.

With a referral program that enables customers to share referral links or codes via social media, you can leverage social proof through your loyal customers and channel it into new business.

#2: Referrals are an efficient (and fast) way to boost your bottom line

It’s a simple fact that all business comes down to one thing: profit. It’s what keeps a business alive, after all.

With a crisis like the COVID-19 pandemic, many businesses are seeing a drop in net income, but a referral program can be an excellent way to reverse the trend. Here’s why:

  • You’ll tap into an organic source of new customers who are essentially pre-qualified, having been recommended by an existing customer.
  • Customers who refer others and feel rewarded for it are far more likely to continue buying from you — especially if you continue to incentivize them. This means a higher Lifetime Value per customer (up to 16% higher, according to some research).
  • Referral programs can work very fast, especially when compared to traditional promotions like pay-per-click ads. They’re also very cost-effective, meaning your bottom line remains as high as possible.

#3: When customers aren’t buying, referrals can still drive your brand

As many businesses have discovered during the COVID-19 crisis, the flow of sales can vary greatly day to day.

If you’re having a slow period, that’s no reason to sit on your hands and wait — especially if you have a referral program. You may not be able to incentivize with discounts and monetary rewards, but you can get creative by giving away free items for every X number of new accounts signed up. In this way, you can build a customer base even if sales have flat-lined. Brands like American Music Supply are already doing this and seeing great results.

And, when things pick up, you’ll have an engaged potential audience ready to buy.

Discover the power of referral marketing today

If your company has been feeling the pinch of COVID-19, you certainly aren’t alone.

But, for all the reasons we’ve explored here (and a few more), a referral marketing program might just help you weather this storm — and come out stronger on the other side.

Want to find out? Claim your free trial with LinkTrust today and start tapping into the true power of social selling.