E-cigarettes were invented back in 2003. The first patent for fidget spinners was granted in the early '90s. People have been drinking almond milk since the 13th century. There's nothing new about these things but, suddenly, they're everywhere.
That's what happens when a niche phenomenon goes mainstream, and it's exactly what's happened with referral marketing in 2017. Once regarded as something only risk-taking, edgy brands like Uber and Airbnb dared to do, it's now the fastest growing form of customer acquisition.
That's why international giants such as Germany's Zalando, the biggest fashion retailer in Europe, and Expedia.de, part of the largest travel company in the world, have both recently jumped on-board and embraced referral. Like Feelunique, ASOS, Telefónica and hundreds more brands before them, they've teamed up with the leading experts here at Buyapowa to launch programmes designed to get their customers sharing and their friends shopping.
Of course, just like your local Starbucks didn't offer almond milk lattes back in Middle Ages (although I hear their mead frappucinos were divine), none of these brands prioritised referral until their customers began to demand it. According to the Ivy League data-scientists at the Wharton School of Business, 83% of customers want to refer their friends to their favourite brands and services. Crazily, until this year, 87% of brands refused to let them - and here's what happens when those customers are disappointed:
Happily, comments like these are becoming more and more scarce as brands begin to listen to their customers and give them what they want. But, while people-power is playing a huge part in driving adoption, even the most in-touch brands wouldn't incorporate referral into their marketing mix if the numbers didn't stack up. Fortunately, that's no longer in doubt:
- Conversion rates for referred-in customers now exceed 40%
- Average order values increase by 50% compared with traditionally acquired customers
- Loyalty grows by a third, with customers who have introduced their friends not only shopping more often, but also spending greater amounts when they do.
This time next year, people might be talking about RCS messaging, or interactive video, or rounding up everyone called Alexa and forcing them to go door-to-door selling homewares. But, right now, they're talking about referral. The question is: are you?
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