Customer sponsorship: for whom, for what, how?

At a time when digital technology is increasingly fragmenting consumers’ attention, customer referrals offer a focused, targeted, personalized, and highly distinctive approach.This new marketing tool thus stands apart from affiliate marketing, SEO, and SEA. In other words, the customer is placed back at the heart of the strategy, with the relationship being valued on two fronts—both for the consumer and for the brand.

After Silicon Valley revived and digitized referral marketing, the insurance, telecommunications, energy, and banking sectors were the early adopters of this new strategy in Europe. But customer referrals are gradually being adopted by retailers and e-commerce businesses, an increasing number of which are now jumping on board.

But what exactly is customer referral?

Are you familiar with word-of-mouth? That age-old concept of informally recommending a brand or product to friends and family? Customer referrals follow this same principle in every way, but in a slightly more formal—and, above all, digital—manner.

Nowadays, in its simplest terms, customer referral is defined as a process whereby a customer recommends a brand or product to their friends and family in exchange for a gift, a perk, a small token of appreciation, or a coupon. In fact, referrals—that is, prospects referred by a brand’s existing customers—are also offered a reward if they agree to sign up for the referral program.

Why Should You Launch a Customer Referral Program for Your Brand?

A customer referral program allows you to achieve several goals: recruit new customers at a lower cost and generate additional revenue, while strengthening the loyalty of your existing customers.

• Acquiring new customers: Beyond simply acquiring new customers, customer referrals allow you to attract qualified leads. Referrals are already aware of the value you offer, since your brand or product has already been recommended to them by someone they know.
• Optimizing Acquisition Costs: As the number of acquisition channels continues to grow, the most expensive solutions aren’t always the best. In fact, customer referrals are recognized as one of the most cost-effective acquisition strategies on the market, since the strength of this strategy comes from your loyal customers themselves.
• Boost Engagement: A referral program allows you to quickly and easily identify your best brand ambassadors. This will enable you to reward them appropriately and strengthen your relationship with them.

In addition to these goals, there are many other benefits to customer referrals! To learn more, take a look at our infographic.

Is your brand ready for digital customer sponsorship?

To get a referral program off to a good start, there’s just one essential requirement… having a list of active, qualified customers. Contrary to what you might think, referral programs aren’t limited to e-commerce sites. There are referral solutions phygital referral solutions that work just as well in-store as they do on an e-commerce site. This way, you increase your chances of seeing your revenue grow as more customers visit your retail locations.

In fact, that’s the approach taken by the ready-to-wear brand NAF NAF, which has developed an annual referral program by turning its loyal and engaged customers into brand ambassadors within their personal networks.

When is the best time to offer a referral program to your customers?

It’s important to always keep the fundamentals of business in mind. It’s when a customer is in the store that you can offer them other products. So if we apply this business principle to the digital world, the more“recent”your customer email addresses are, the more responsive they’ll be to referral programs. The quality of your database is therefore a key factor in the success of your referral strategy.

It’s also important to remember that the best referrals happen after a customer has had a positive experience with your offer or product. Ideally, you should therefore combine your satisfaction survey with your referral program. At the end of your satisfaction survey, simply include a link to the Splio Referrals platform to invite your customer to join you as a referrer.

You now have all the information you need to better understand customer referrals and consider the benefits of such a strategy for your brand. Feel free to contact us for a demo of the platform.