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It’s happening. Recent global events like inflated prices and multiple layoffs have led to conversations about a possible recession. Some even say we’re already in the middle of it.
Because of these events, agency owners are looking for new strategies to “recession-proof” their businesses. Ultimately, it’s more crucial than ever to continue providing value to your clients.
Adding value to your clients increases your value
What happens when you create value for your clients?
- Improvement in brand reputation, resulting in long-term success
- Boost in revenue and business bottom line
- Increase in clients’ trust and confidence in your agency
Here’s the truth. When an agency is able to help its clients grow their brands, the clients will stay. This will then increase the agency’s customer retention rate, enabling them to thrive amidst a recession.
So take the time to dig deep and discover how you can continue adding value to your clients’ brands. Once you figure this out, offer it. You will immediately increase your perceived value because you’ve offered something more than what your clients signed up for.
So how can you add value to your clients? Answer: Think of ways to increase your clients’ profits. This will show them you genuinely care about setting them up for success.
Next, recommending referral marketing is the up-and-coming way for agencies to improve their clients’ net profits—and here’s everything you need to back this up.
Top 4 benefits of referral marketing
There are so many reasons why agencies need to add referral marketing to their list of services.
But to keep things simple for your clients, here’s a very quick overview of some of the best benefits of referral marketing that are specifically connected to profit increase.
1. It reduces acquisition costs but drives more sales at the same time
Did you know that it costs 5 times more to acquire a new customer compared to retaining an existing one?
Additionally, numbers from Business Insider show that the increase in both ad costs and ad spending over the past year has been crazy:
- Facebook CPM (cost per thousand impressions): Up by 89% YoY
- YouTube CPM: Up by 108% YoY
- TikTok CPM: Up by 92% YoY
This is where referral marketing can step in, hitting two birds with one solution:
- Brands can spend less on paid ads as well as other acquisition efforts. Referral marketing costs less. Brands will only need to pay for the software of their choice and the rewards for referrers which they would only need to pay after a successful purchase anyway.
- Brands will generate more sales and conversions. According to Business2Community, referred customers have a 16% higher customer lifetime, and they also convert 30% better.
So in a nutshell, referral marketing can lower your clients’ marketing spend while increasing conversions. Win-win!
2. It boosts brand loyalty and trust
Referral programs involve rewarding existing customers who successfully influence other online shoppers to purchase from a brand. Rewarding already existing customers will encourage them to purchase again and even spread the word about the brands.
Because of this, your clients can easily identify their loyal customers and advocates, allowing them to create personalized campaigns or exclusive benefits.
This will strengthen the relationships and engagement levels between your clients and their existing customers.
3. It expands the reach and exposure of brands
Online shoppers are present on a variety of online platforms. Some of them have their own personal websites, YouTube accounts, and TikTok handles among other channels.
Now, more than 70% of online users go to social media to research products.
What does this mean?
If a brand has a prominent online presence on the platforms where its target customers are, then that’s a really big win right there. After all, around 71% of consumers are more likely to buy a product if they discovered it via a recommendation on social media.
When your clients invest in referral marketing, their customers can help bring their brand closer to where potential customers are.
Instead of spending more on brand awareness campaigns, your clients can just let their customers do the job via word-of-mouth on different platforms.
4. It generates User-Generated Content (UGC) efficiently
At this point in time, brands are already very much aware of the benefits that UGC can bring to their business. For starters:
- According to 74% of online users, recommendations from people they know in real life help them decide on a purchase.
- For 90% of consumers, UGC helps them decide on purchasing more than branded promos and content.
- 70% of consumers will study UGC reviews and ratings before making a purchase decision.
Because referral marketing gives incentives to customers, they are encouraged to create UGC that they can use to share about brands or products. This will help your clients lower their marketing spend and get new customers because content creation is essentially free.
Getting access to the content created by customers is also a huge bonus because you can use these for your other services, whether you’re offering email marketing, performance marketing, and others.
Check out some examples here of how you can use UGC in your marketing plan.
It’s easy to add referral marketing as a service through the use of ReferralCandy—a Shopify Plus-certified software. So if any of your clients want to jump in, you can get started immediately.
5 referral marketing strategies for your clients
When your customers get started with referral marketing, they may have some difficulty navigating it at first. Here are five strategies to help their referral marketing program find its footing.
Prime the customer loyalty program
If your clients don’t have existing customer loyalty programs yet, now is the best time to start. After all, their customers are probably waiting for it already. As much as 84% of online consumers are more likely to continue supporting a brand with a loyalty program.
Some steps for conceptualizing and implementing brand-new loyalty programs:
- Finalize the type of referral program you want to have.
There are point-based programs, tiered programs, or paid programs.
- Check out the loyalty programs of brands you emulate.
Know what’s out there so you can effectively come up with a unique loyalty program that works. For example, Sephora gives one point per $1 spent. The North Face also lets customers earn points through other things aside from purchasing, such as attending events or downloading their app.
- Plan out the benefits and rewards carefully.
They should be attractive to customers, while still making sense resource-wise.
Upgrade referral benefits and incentives
Now, for your clients with existing loyalty programs, it may be worthwhile to revisit the rewards and incentives.
Rewards are proven to increase referrals. A discount, a freebie, or any other benefit can give shoppers good reasons to promote ecommerce brands. Here are some popular examples of referral incentives your clients may want to explore:
Discount coupons are rated by more than 50% of global customers as the most-valued reward, so you can’t go wrong with these. You can explore set discounts ($50 off) or varying discounts depending on purchase value ($100 off for purchases of at least $2000)
- Cash backs
Cash is enticing because the customers really feel that they got something in return. An example is PayPal’s $10 double-sided incentive: the referrer gets $10 and their friend who opens an account gets $10 too.
- Store credits
Combine discount coupons and cash back rewards and offer store credits as a referral incentive. Store credit basically comes in a monetary amount, but the referrer can use this credit to buy from the same store. These are usually cumulative too, and can be used instead of a discount voucher.
- Free items
Throw in some samplers or branded merchandise because people love getting something for free. If consumers receive freebies for every successful referral, they will continue promoting these brands.
Feel free to also check out this in-depth guide on choosing the best incentives for referral programs.
Recruit repeat customers as top influencers
Referral marketing rewards brands’ already existing customers and recognizes their influence in their respective circles. If your clients notice huge volumes of referrals from a few customers, it might be a viable option to work with them as official brand influencers or ambassadors.
After all, eight out of ten consumers have bought something after seeing it recommended by an influencer. The power of influencer marketing is undeniable—but instead of spending millions on celebrities, your clients can invest in referral marketing and let their loyal customers be influencers in their own right.
Try a referral program software that runs by itself
Yes, referrals can happen organically, especially if customers are really satisfied with their purchase. With a referral marketing software, each and every successful referral can be tracked and referrers will automatically be rewarded.
Having a dedicated software for referral marketing will provide your clients an additional revenue source without too much of a hassle. It’s definitely a way to help them increase their net profits.
Prepare shareable content to create more referral opportunities
Customer loyalty program—check. Referral marketing software—check! First few affiliates, referrers, influencers—check.
Your clients can technically sit back and let their customers start promoting their brand whenever and however they want to.
But why not help your clients provide their customers with ammunition?
This can come in the form of ready-made assets, or even ideas and prompts. Brands can even be more active on their social media channels and post surveys, relatable articles, quizzes, or even memes—anything that is easily shareable. That way, existing customers will have plenty of opportunities to refer the brand.
Your clients can also consider creating an exclusive community for members of the program. Then the brand can broadcast announcements, assets, ideas, and even seasonal promos to market.
Conclusion: Help your clients start their referral marketing journey today
Offering referral marketing as a service to your clients will help them increase their net profits and overall business bottom line.
Additionally, this will also increase their lifetime value as your customer. You won’t be just another agency—instead, you’ll be the agency that just keeps adding value.
Join our Partner Program to get your referral marketing service up and running in no time and start transforming your clients’ businesses.