The Power of Referrals

Creating and using a strong referral system is a very effective marketing strategy. Every business should take advantage of it.

One of my earlier posts highlighted The Power of Social Media, significantly showing why social media needs to be a part of your social media strategy. Business owners will you about the return on investment (ROI). What they are simply asking you is ‘How much will we make today?”  A better way to measure the effectiveness is to measure the non-financial KPIs. One of them, we will be talking about in this post is the Centers of Influence (COI).

COIs are the people in the community that generate sales for your business through referrals. At times they are your customers. Then at times, some are members of your target market who influence their peers, some who operate complimentary businesses and share their customers.  They are typically well connected with the  ability to generate large volumes of business for your company by referral — and they’re online.

So, the next time you communicate about social networks to business owners, explain them the referral opportunity they represent:

Facebook – the largest referral network
If Facebook were a country, it would be the 3rd largest in the world. It has over 500 million users. An average user creates 90 pages of original content each month and is connected to 80 community pages, groups and events. This social network is the best place for consumers to share brand-related experiences with their friends and family.

Twitter – the loudest referral network
Though Twitter is not as big in size but what it lacks in size, it makes up for in volume. *180 million unique users access Twitter each month and the 10 billionth tweet was posted in March 2010. With over *110 active users, Twitter is the first place that it’s users go to praise or complain about brands. *More than 6 million searches happen on Twitter each day. Twitter’s search makes it easy for companies to find and respond to all brand-related conversations on the site.

LinkedIn – the largest B-to-B referral network
LinkedIn has more than 60 million worldwide users with about half of its users outside the US.  ** It has executives from all Fortune 500 companies and every second a new member joins LinkedIn. It attracts and connects business professionals, business owners, sales people and corporate decision makers — making it one of the best resources for fostering COI relationships.

Each of your customers on  social network is likely to have many friends and acquaintances who fit your “target customer” profile. You’ll be amazed at how social media will be a big help in growing your business. Referrals are valued by social network users as a credible alternative to time-consuming research. Referrals are valued by business owners because they result in more sales over the long haul and a shorter sales cycle.

Social networks are the most affordable and powerful resources for identifying COIs, monitoring the perception of your brand, and placing your brand high among the ‘add to cart set’ when prospects are ready to buy.  Social networks are good marketing tools — and they are good business if you use them to be.

The goal of an effective social media program is to attract, gather and nurture these COIs and customer relationships that will generate ongoing referrals, increased awareness and future sales.

Sources:
* Statistics from Twitter and Chirp Conference
** Statistics from LinkedIn Press Centre and SysComm International

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One thought on “The Power of Referrals

  1. […] | Leave a comment » Taking it further from one of my earlier post where I talked about the Centers of Influence (COI), I would like to talk about Influence […]

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