Research records billions spent annually on advertising. Many companies invest a bulk of their resources in widening their reach and trying to acquire new clients, all to little or no avail. Fact however from a number of studies show that referrals are the best marketing strategy.
Referrals are also known as word of mouth is when a client relates the experience from using a product or service to a friend, relative or via social media. Word of mouth is a subtle but powerful way a customer converts new clients for a business with little or no effort on the part of the company.
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People from around the world using surveys talk about how they have been introduced to a product or service that they would otherwise not have considered simply because a friend or member of their close circle suggested it. They say that it is easier to trust the word of mouth experience from a person they know than from a brand that is far away.
What then does this mean for a business? This new discovery cut costs in ways that are unprecedented as the company spend next to nothing on advertising or anything in that category asides from their initial production. Word of mouth takes away the need to install a large signpost or even organise rallies. All the company has to do is produce an excellent product or service.
Major companies that deal with consumer connections like Facebook or any social media apps do not have to do much after the initial launch. This is because consumers use the app and quickly invite other friends to join the platforms for connection. A referral is indeed a powerful thing as there are more than 1billion Facebook users from around the globe. Other start-ups and small businesses also record an increase in customer base as a result of referrals. Many consumers have developed a thick skin for sponsored ads and direct info-materials. However, they are quick to listen to a friend share experiences from the use of a product.
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The key takeaway from this knowledge is that as much as a referral is powerful it is a double-edged sword. The same medium that can grow a business to unmentionable lengths can also bring a business down. This is because people are quick to spread all the negatives before they can recognise the positives.
In addition, however, it is important to realise the referrals are a great way for companies around the world to leverage and expand reach. When companies fail to use this medium, they are opting for failure at a higher cost.
Our advice to start-ups and small businesses out there is to reduce the costs of Facebook marketing and increase quality product and customer referrals. This is the best way to cut down costs and channel resources to other areas of the business for all-around growth and productivity thereby increasing profits. When start-ups, small businesses and large companies understand the power of referral in business, then the world is about to see something massive.
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