TechDogs-"All You Need To Know About Referral Marketing Software"

Marketing Technology

All You Need To Know About Referral Marketing Software

By TechDogs

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Here are a few hypothetical scenarios:

"Hey, I heard the bookstore across the street has insane discounts on different genres, let's go there and grab some books."

"Every Friday I take a detour from work for this cup of coffee; it tastes delectable, you should try it!"

Doesn't matter if you are the one quoting or listening to such conversations; while having such discussions, you eventually contribute in the marketing process of your favorite brands by "referring" their products or services. This is called "Referral Marketing" or more commonly, 'word-of-mouth publicity'.

Referral Marketing is the cheapest yet most powerful method for brands to grab more customers. Walt Disney has summed up this whole phenomenon as, "Do what you do so well that they will want to see it again and bring their friends."

Referral Marketing has gained a new dimension ever since it has been supported by technology. Referral Marketing Software has arrived as a blessing for marketers; but exactly what is it, how it works and why is it so significant for marketers? This article is here to give you insights into the details of Referral Marketing Software.
TechDogs-"All You Need To Know About Referral Marketing Software"-Well I Just Prefer To Refer!
Joey was leisurely reading an e-book in Central Perk Café. After he finished reading, Kindle flashed a message: "Refer a friend and get 25% discount on your next read.
Without giving it a second thought, he referred it to Rachel. See Joey who doesn't even share food couldn't resist when it was about recommending and getting rewarded in return. Well, just like him, when we come across such offers during physical and online shopping, we can't stop ourselves either!

When it comes to Ecommerce, every new recommendation, review, share and tag is a stepping-stone towards success for brands. These activities are nothing else, but referral marketing techniques used by the marketing teams. In order to do that, marketers use dedicated referral programs and Referral Marketing Software plays a key role in this entire process.

Are you curious to know what exactly this Referral Marketing Software is? Let’s find out in the following section.

What Is Referral Marketing Software?

A Referral Program is a word-of-mouth marketing strategy, or a tactic designed and executed by Referral Marketing Software, used to encourage customers to recommend a particular brand to their contacts. Let's assume that Sheldon Cooper has finished a short-term online course and saw “Recommend us and get a free annual subscription to Physics Journal now!

He would naturally refer to his friends Howard, Raj and Leonard. Now coming back to our Referral Marketing Software, it is a tool that designs various programs and schemes to utilize customer loyalty and grab the interest of affiliate marketers, influencers and consumer advertisers. These programs enable brands to ensure better targeting, segmenting and positioning of their products and services through referrals given by loyal consumers.

Of course, Referral Marketing Software didn’t show up out of the blue; it evolved with time. Let's find out how!

Evolution Of Referral Marketing Software

Even in the pre-digital era, word-of-mouth publicity has been an effective method of advertisement and promotion. Brands used to frame schemes and marketing campaigns to attract more customers using this technique. Although the phenomenon of Referral Marketing Software sprouted just a few years ago, brands have a long history of rewarding existing customers, in turn, bringing in new customers.

The practice of rewarding the customers started in the form of Affiliate Marketing. Thanks to William. J. Tobin who founded an online flower shop named PC Flowers and Gifts and in 1989 he introduced the first online Affiliate Program. William Tobin launched this Program on the Prodigy Network. As per this Affiliate Marketing model he would pay a commission to Prodigy Network on every new sale. By the year 1993, this Affiliate Marketing Program turned into a massive reason for generating millions of annual revenues and brands realized how important it could be! Like any wise businessman, in the year 1996, Mr. Tobin applied for a patent for his Affiliate Marketing Program and in 2000 he was granted the patent.

Later, in 1996, Amazon Associates (who then just sold books!) launched their first Affiliate Program for the public in general where people could sign up, share and broaden the customer base for the brand.

This is how Affiliate Marketing became familiar and the concept of Referral Marketing came into being. Slowly the need to have a special tool arose. With its emergence, Referral Marketing Software took Referral Marketing a step further by automating and integrating the entire process and ensuring reach for new customers.

Here’s what you’re waiting for - how does this software work? (Maybe someone from the TV series How I Met Your Mother can help you with that.)

How Does Referral Marketing Software Works?

While coming back from Lily's kindergarten, Lily saw a sign near MacLaren's "Refer a friend and get a pair of shoes and handbags for free!" After an hour she was in the mall with Robin.  Are you confused about how it relates to Referral Marketing Software? Well, it does...

The marketing team of the mall knew that the area around MacLaren's Pub would be an ideal spot to attract #shopaholic customers like Lily. Hence, to utilize the Referral Marketing Software in the best manner it is essential to know what kind of audience brands want to target.

Although convincing Robin Scharbatsky (or we should say Robin Sparkles!) might not have been easy but with an attractive referral program, it was easy enough for Lily. Referral Marketing Software enables businesses to understand their target audience, segment them and apply referral marketing schemes for better marketing outcomes.

So far with the help of little examples, you have understood the concept, evolution and mechanism of Referral Marketing Software but exactly how can this tool be beneficial to brands? Let's discuss it in detail and guess what, Sheldon Cooper will aid you with that!

Sheldon, What Are The Benefits Of Referral Marketing Software?

Referral Marketing Software uses the customer database to form interesting referral programs. This eventually helps in attracting more customers and enhancing their business revenue. Although the benefits of this software are not limited to this, they go far beyond.
  • Analyzing The Customers

    We all know that Tuesday nights for Sheldon meant burgers from Big Boy Restaurant and eventually he became a regular customer of this restaurant. Whenever there were any exciting offers in Big Boy Restaurant, Referral Marketing Software would auto-generate a pop-up notification for Sheldon. He can then take his entire group to Big Boy Restaurant and they get 5 customers instead of one!

  • Cost-Effective Marketing

    Referral Marketing Software doesn’t need you to hire additional IT teams or marketing gurus; instead, it makes everything super-easy for you! Hence, framing marketing strategies for rewarding the existing consumers and bringing in new audiences becomes cost-effective.

  • Enables Higher Reach

    Data shows that 92% of the customers are influenced by the recommendations given by their peers. Since Referral Marketing Software pools, the attention of customers by framing attractive reward programs, it instigates the customer to recommend the brand. This eventually attracts new customers to the brands. Just like Big Boy Restaurant soon became a favorite spot for Sheldon's entire squad!  

Referral Marketing Software also manages the key performance indicators, handles influencers that help in offering and testing various campaign segments and automates the reward process. Future trends will add to its benefits and make it even more awesome!

Future Trends For Referral Marketing Software!

One of the popular data collection sites, Forbes quotes that 78% of brands recommend referral marketing as an important asset to frame influential strategies. The Referral Programs will take a leap forward and integrate with techniques like barcode scanners, pay-per-click and referral advertisements to make the complete process of marketing even more effective. Besides this, the rise of automation, Machine Learning and AI-based chatbots will be integrated with Referral Marketing Software.

This will make the entire process streamlined, with predictions for what will work, what’s the best time to offer consumers a referral and who has the highest referral likelihood. 

Summing It Up

That, kids, is what Referral Marketing Software is all about!

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Frequently Asked Questions

What Is Referral Marketing Software?

Referral Marketing Software is a tool designed to facilitate word-of-mouth marketing strategies, encouraging customers to recommend a brand to their contacts. It operates by creating and managing referral programs that incentivize customers, affiliate marketers, influencers, and consumer advertisers to promote a brand's products or services. By leveraging customer loyalty and utilizing various program schemes, Referral Marketing Software enables brands to effectively target, segment, and position their offerings through referrals from satisfied consumers.

How Does Referral Marketing Software Work?

Referral Marketing Software functions by understanding the target audience, segmenting them, and implementing referral marketing schemes to achieve marketing objectives. By analyzing customer data, businesses can tailor referral programs to attract more customers and increase revenue. Through automated processes and targeted marketing strategies, Referral Marketing Software identifies potential customers, encourages referrals, and manages reward systems. This software ensures that brands can effectively engage with their audience, capitalize on word-of-mouth advertising, and optimize their marketing efforts for maximum impact.

What Are the Benefits of Referral Marketing Software?

Referral Marketing Software offers several benefits to businesses seeking to expand their customer base and increase brand visibility. Firstly, it allows for detailed analysis of customer behavior, enabling businesses to create targeted referral programs that resonate with their audience. Secondly, it offers cost-effective marketing solutions, eliminating the need for additional IT or marketing resources. Finally, Referral Marketing Software facilitates higher reach by leveraging the power of peer recommendations, driving new customers to the brand and fostering loyalty among existing ones. Overall, this software streamlines marketing efforts, enhances customer engagement, and positions brands for sustained growth in a competitive marketplace.  

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