Over the past several weeks, we’ve talked about the life cycle of online marketing. You need a solid reputation to build trust with your consumers, and reach in order to influence them. You need to learn the skills necessary to resell your customers, increasing their lifetime value. Finally, it takes referrals to keep expanding your reach, improving your reputation, and even retain your existing customer base. So let’s talk about what counts as a referral in the online space, why most businesses can’t get them to work, and how you can leverage them effectively.
What Counts as a Referral in Digital Marketing?
When we hear the word “referral marketing” in a traditional context, we usually think of “word of mouth.” Referrers might be incentivised with a special deal or a commission, for example. Other businesses might focus more on party planning and events, deals, or even on products that lend themselves to conversation directly.
The situation is similar online, but referrals actually go on to encompass a more broad category. In short, a referral is any visitor who comes to your site because they heard of you from somebody else. It’s easy to see the similarity with offline referrals, but there are a few noteworthy differences.
In traditional marketing, for example, we generally wouldn’t think of customers who heard about our business in a magazine article as referrals. However, a visitor who came to our website from a popular blog would be categorized as “referral traffic,” and for good reason.
The digital realm blurs the lines between “word of mouth” and “broadcasting.” A blog is a broadcast medium as well as a place for one-on-one communication. A devout member of a blog audience isn’t exactly the blogger’s friend, but there’s a good chance that they’ve interacted with the blogger directly in comments, and perhaps social networks. When somebody hears about your business from a blogger they trust, it’s more akin to a referral than anything else in traditional marketing.
Acquiring Referrals Online
So what does referral marketing look like online? It can take many different forms depending on your strengths and your target audience. However, your basic approach can typically be boiled down into some combination of these categories:
Guest Posts and Collaborative Projects – If content development is one of your strengths, this can be a very powerful strategy. When you write a guest post on a popular blog, the blogger’s audience trusts you implicitly, and is more likely to visit your website or your business. This is equally true of any collaborative project that involves online influencers.
Viral Marketing – This is all about creating content that people naturally want to share with people they know. Blog posts that are especially helpful, entertaining, and surprising tend to get shared through email and social networks. Viral marketers face a conflict between virality (better for reach) and relevance (better for referral). It’s important to strike a balance.
Incentivised referrals – Straight out of the traditional marketing playbook it may be, this tactic still works. Unfortunately, very few businesses know how to do it correctly online. For example, they might offer visitors a deal in exchange for a “like” on Facebook. According to research by BuzzStream, there’s actually no correlation between Facebook “likes” and referrals. (This is also questionable when it comes to Facebook’s terms of service.)
Social bookmarking – This is less useful for local businesses but it’s worth mentioning. Social bookmarking sites like Reddit and StumbleUpon can send a massive number of referrals if you share a piece of content on their network that appeals to their culture. Pinterest is even more effective, sending more referrals than Twitter.
While most businesses still see far fewer visits from referrals than from search engines, the right kind of referral traffic is actually more likely to convert. Visitors from social networks, for example, are more likely to subscribe to your blog. Referrals from product review blogs are more likely to make a purchase.
The key ingredient that referrals bring to the table is trust. Keep that in mind in your efforts to attract online referrals.