How can I get recommendations that work

How digital referral marketing works

From Philip Kühn

You can usually rely on recommendations from acquaintances and friends. The big advantage: You can benefit from the experience of people you trust - much more than advertising messages or recommendations from third parties. For the person making the recommendation, in the end there is usually nothing more than the thanks of the person seeking advice. A fact that many companies are now changing by promoting positive recommendations with a corresponding reward - and the trend is rising.

Distribute rewards, win customers?

There are some elementary aspects to be considered in the corresponding customer-refer-customer programs. Firstly, the selection of the right bonus: Especially with a heterogeneous target group, the distribution of prizes is suboptimal. Cash prizes or multi-shop vouchers (e.g. Amazon) make more sense here. It is also important to choose the right strategy and clarify whether the program should run offline and / or online. If you decide to go online, it is important that automated processes are set up in order to achieve the highest possible conversion rate. Specialized providers can provide a technological infrastructure that enables user-friendly recommendations - for example via Facebook.

Which company can I trust?

The example of the energy industry shows how much recommendations from satisfied customers can be worth. Various factors play a role when choosing the right electricity provider. The electricity price itself comes first. But other factors are also taken into account as selection criteria. This includes customer service and the reliability of the electricity provider - because it is not uncommon for new electricity providers to appear, only to disappear again a few years later. As a basis for decision-making, trust - alongside the price - is the decisive sales argument. And recommendations from satisfied customers are certainly a very solid basis for establishing trustworthiness - especially from those who are close to you.

Use expertise, outsource digital recommendation marketing

There is a simple reason why many companies do not use the potential that is hidden in digital recommendation marketing at all or only to a limited extent: there is a lack of experience and staff. An external service provider can remedy this. Specialized companies such as Tellja GmbH offer specially developed platforms plus a full service for customer-recruiting programs. The company has several modules to choose from, from a highly standardized solution to a solution adapted to the corporate design. Individual advice on the optimal placement of buttons and widgets is very important. In addition, this always includes setting up a helpline for customer questions and all processes relating to the payment of bonuses.

Countable results

The result is usually clear: "Our conversion rate across all industries is an average of 37 percent, which means that if 100 recommendations are made, an average of 37 new customers will be generated," explains Jens Rode, Managing Director of Tellja GmbH. At the same time, the financial outlay is clearly predictable and manageable. The costs for the implementation are often refinanced after a few months, while the running costs depend on the performance.

It remains to be noted: The advertising customer is rewarded - ideally in monetary terms. The new customer can make his purchase decision with a clear conscience. And companies get an additional sales channel for acquiring new customers with relatively little effort, which works separately from the use of SEO, SEM and affiliate marketing.

Checklist for online referral marketing

1. Like any good online shop, the customer-refer-customer process must be kept as simple and direct as possible: a few clicks, clear user guidance, transparent conditions.

2. The look and feel of mailings, widgets and similar aids should correspond to the provider and blend in with the overall appearance so that there is no gap in trust.

3. The premium should be monetary as this promises the highest conversion rates. If the target group is very homogeneous, rewards and vouchers are also conceivable.

4. The ability to divide the bonus between the advertiser and the person referred increases the attractiveness and thus the success of the recommendation process: Friends who share are even more trustworthy.

5. Current developments in this segment must be implemented quickly. Professional service providers for recommendation marketing are constantly developing their system: for example with new add-ons, additional solutions and functionalities, e.g. B. Direct recommendations via apps and Facebook.

6. The possibility of delegating the payment of bonuses or the dispatch to the service provider, streamlines internal company processes and ultimately saves costs.

About the author: Philip Kühn is an IT journalist at Wordfinder. The sales-oriented public relations and lead agency looks after customers such as Tellja GmbH, a digital platform for recommendation marketing that enables online shop operators to create their own "customer-recruit-customer" program with little effort.