Something most entrepreneurs have in common is that they don’t have enough money to do big $30 million launches to get their new product, app, or service out on the market. Luckily, there are many tricks you can do online to make your business shine even with a limited budget. We talked to the CEO of IdeaPros, Fred Cary about three ways to implement referral marketing strategies for your business and get more leads and clients.
Referral marketing means bringing new customers in by word of mouth from the ones that already love your business. According to Nielsen, 92% of consumers trust recommendations from people they know. McKinsey says that referrals influence up to 50% of ALL purchasing decisions and generate more than two times the sales of paid advertising. So the next time you hear someone enjoyed working with you or your product, be sure to ask them to share their experience and refer you to their friends and family.
If you have a friend telling you, this is the best pizza I’ve ever had, it’s going to carry a lot more weight than seeing some ad from a pizza company saying it is guaranteed to be the best pizza you’ve ever had.
Affiliate marketing means you are building a sales force that works on commission. Many websites do that. ShareASale being the largest. Affiliates write reviews, have your product on their website, and offer it to their huge audience. When they make a sale, they take their share around 10-15% of the price and give you the rest.
Determining the percentage you will offer your affiliates can be tricky. It all depends on the product price and how motivating it is for the product to be sold. If you’re just getting started, you can find other smaller affiliates to work with. If you want to go big, you have to offer them a good deal, 25% off the price for example. This can seem like a lot of money but to reach the type of audience that person already has is going to cost you much more than this 25%. It’s going to take you a lot of time. With this type of marketing program, you can do it overnight.
“With affiliate marketing, you’re using people that have some level of expertise in their marketplace and have millions of people following them for their expectations and expertise.” — Fred Cary
The goal of loyalty programs is to get existing customers to buy more of your products. They can earn points to purchase more products or get one product for free after buying 10 in a row. The idea is to get your current customers to shop continuously or use your services to earn rewards.
Home Bistro is a company that sells prepared meals online in 48 states using a referral plan where you get a discount if you refer to other friends and family. There is also an affiliate marketing plan with 25 different affiliates around the country that sell their products for them. Using referral and affiliate marketing has helped the company grow.
Harry’s spent months getting people to start spreading the word. The more friends that you’ve got to join, the more prizes you would get. The prizes don’t have to be huge and customers would have to get 50 people to sign up to get them. When people are interested, they can be motivated by bigger prizes.
DropBox also used the referral program to build its first base of clients. They were not the first to offer storage space, but they had better pricing and free space. They offered more free space if you brought other people on board. Instead of reaching a couple of people with the ad, they reached a hundred people through already satisfied customers.
“Use the audience that you already built to go out and spread the word.” — Fred Cary
So, the next time you think about the ways to attract clients and leads, don’t think only about how much money you have and think about how many opportunities you have.
The “Idea Pros” at IdeaPros have the resources, experience, and tools to help you at this step or any step in the entrepreneurial journey.
We partner with entrepreneurs at any stage and who are ready to invest their ideas. Apply for an interview and let’s explore partnering together.
Want to see the products we have launched? Check out the IdeaPros Launchpad!