Remember, every customer you bring in costs your business money, whether from advertising, discounts or other marketing techniques. If referral customers have a higher lifetime value than the ones acquired through paid channels, they can pay off those costs more quickly and help your business save money in the long run.
Likelihood of conversion
Referral marketing often leads to higher conversion rates than more traditional forms of advertising. With word-of-mouth referrals, customers receive personalized recommendations from someone they trust. fantuan data This makes them more likely to take action on the recommendation and purchase.
According to data from McKinsey, 63% of GenZ consumers say that recommendations from friends are their most trusted source for learning about products and brands.
Establishes trust
Humans trust other humans. That’s just a fact. Think about it, if you’re looking for a new product or service, it’s much more likely you’ll purchase if you get a recommendation from someone you know. You might even read online reviews before you buy, to make sure you’re getting exactly what you expect.
We often call this social proof, which is the idea that if people around us are doing something, it must be alright to do it as well. It’s why people stand in line for the latest Jordans, or why Supreme drops are such a big hit. They aren’t necessarily offering the best product on the market, but it’s the most coveted because everyone else is buying it.