World Library  
Flag as Inappropriate
Email this Article

Referral marketing

Article Id: WHEBN0004992612
Reproduction Date:

Title: Referral marketing  
Author: World Heritage Encyclopedia
Language: English
Subject: Email marketing, Affiliate marketing, Internet marketing, Online advertising, Refer
Collection: Internet Marketing
Publisher: World Heritage Encyclopedia
Publication
Date:
 

Referral marketing

Referral marketing is a method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously but businesses can influence this through appropriate strategies.

Contents

  • Overview 1
  • Benefits of referral programs 2
  • See also 3
  • References 4

Overview

Referral marketing is a process to increase word of mouth marketing by encouraging customers and contacts to talk as much as possible about a brand or product.

Online referral marketing, using digital marketing as a platform, is the internet-based approach to traditional referral marketing. By tracking customer behavior online through the use of web browser cookies and similar technology, online referral marketing can potentially provide a higher degree of accountability than offline models.

Offline referral marketers sometimes use trackable business cards. Trackable business cards typically contain QR codes linking them to online content for sale while providing a way to track that sale back to the person whose card was scanned.

Benefits of referral programs

A study conducted by the Goethe University Frankfurt and the University of Pennsylvania, on referral programs and customer value which followed the customer referral program of a German bank that paid customers 25 euros for bringing in a new customer, was released in July 2010. [1] According to Professor Van den Bulte, this is the first ever study published on the financial evaluation of customer referral programs.[2] The study found that referred customers were both more profitable and loyal than normal customers. Referred customers had a higher contribution margin, a higher retention rate and were more valuable in both the short and long run.

On whether customer referral programs are worth the cost, the study says that it records "a positive value differential, both in the short term and long term, between customers acquired through a referral program and other customers. Importantly, this value differential is larger than the referral fee. Hence, referral programs can indeed pay off."[3]

See also

References

  1. ^ "Referral Programs and Customer Value
  2. ^ Knowledge@Wharton (22 July 2010). "Straight Talk About Word-Of-Mouth Marketing".  
  3. ^ Page 25 of "Referral Programs and Customer Value"
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
 
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
 
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.
 


Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.