Marketing is about promoting a product or service. And since the beginning of time, that promotion has included people sharing their recommendations with others. As social media and platforms like YouTube continue to revolutionize the way we do business, it has also evolved the way prospects learn about businesses. People are increasingly turning to folks outside of brands for recommendations. Faith Maginley, Global Partner, Ecosystem Marketing at SAP shares how influencer and referral marketing can help brands connect with their audience and consumers more effectively.
During the early months of the 2020 lockdown, many of us spent countless hours doing things we did not normally do, like learning to whip up Caesar dressing from scratch (or was that just me?) or spending more time doing DIY projects. I also found myself spending more time than ever on YouTube, where I discovered some of the best content did not come from brands but everyday people. I subscribed to dozens of channels on everything from culture to style to skincare. Before long, YouTube content creators became as much a source of my programming as HBO and Netflix.
Marketing is about promoting a product or service. And since the beginning of time, that promotion has included people sharing their recommendations with others. As social media and platforms like YouTube and TikTok continue to revolutionize the way we do business, it has also evolved the way prospects learn about businesses. People are increasingly turning to folks outside of brands for recommendations.Â
Rise of the Influencer
Not long ago, influencers were considered little more than hobbyists, amateurs in search of fame. However, because social media democratized access to the masses, the public discovered that talent and expertise exist beyond traditional gatekeepers like professional critics, consultants, and reviewers. In fact, some â€œamateurâ€ content creators are making millions of dollars a year.Â Â
Influencers are found across a range of industries, including enterprise software. SAP uses an influencer relationship managementOpens a new window tool to reach new audiences. â€œWe work with B2B influencers who might have been a practitioner in a certain line of business, a former analyst with a tier-one firm, or someone who has a lot of knowledge on how technology is changing the future of business,â€ said Ursula Ringham, head of influencer marketing, SAP.
Marketing services and platforms like TVPage can help companies get started. TVPage helps recruit content creators that understand a specific industry. The influencer then creates videos with â€œshoppable contentâ€ embedded with product links. Many companies even encourage their sales associates to use the platform as a selling tool and a way to earn extra commissions.Â Â
The choice to use influencers or celebrity ambassadors depends on the objective. Celebrities can serve as a big draw for events and add razzle-dazzle to campaigns. On the other hand, influencers (many of whom are celebrities in their own right) can provide commentary and credibility on industry-specific topics. They may be seen as more trustworthy since they tend not to be beholden to one specific brand, which gives the appearance of objectivity. Even influencers with less than 5,000 followers can provide a level of credibility that brands cannot achieve on their own. Conversely, you will probably never see a celebrity spokesperson like Michael Jordan promoting Adidas.Opens a new window Â
Referral Marketing and Why â€œWord of Mouthâ€ Is Still King
In addition to influencer marketing, referral marketing is an effective tactic to consider, especially since 81% of consumers trust their friends and family’s advice over advice from a business, according to HubSpotOpens a new window .
Or, in the words of hip-hop legend Jay-Z, â€œWe don’t believe you; you need more people.â€
Furthermore, according to the same HubSpot study, 65% do not trust company press releases, 69% do not trust advertisements, and 71% do not trust sponsored ads on social networks.Â
Yikes. What is a marketer to do?Â
There is no need to toss out PR and advertising. They are absolutely essential for sharing updates and building awareness. But when it comes to trust, there are few better ambassadors than a satisfied customer. For better or for worse, thanks to social media, word of mouth is still king. We tell each other everything. So why not jumpstart those conversations?Â
Referral marketing harnesses the power of word of mouth, making it easier for customers to tell their contacts about their purchases. Often paired with a reward to sweeten the deal (â€œShare with your network and get $5 off your next purchase!â€), people are usually happy to let everyone know they just purchased a great product.
Referral programs can take a variety of forms, each providing specific benefits that can incentivize more engagement on social media or drive traffic back to a company’s website. When beginning to map out a referral marketing program, it’s critical to keep a few points top of mind.Â
- First, ensure a simple referral process with an automated self-service referral form. If any barriers are in place, customers will be less likely to complete the process.Â
- Next, encourage referral marketing by providing rewards for successful referrals.Â
- Lastly, automate your referral campaign to ensure the company remains responsive to customers at all times and easily generates referrals in a timely fashion.
Apps like Mention Me can help facilitate the process. One cool feature allows friends to input the customer’s name at checkout online; no link or code is required. This streamlines the process for customers and removes barriers that could keep them from referring.Â Â
- Friend: Hey, loving the new lipstick! Where can I get it?
- Your Customer: Thank you! Just go to [insert your website] and input my name as your referral at checkout for a discount!
Offering the customer a reward and the friend a discount sweetens the deal for everyone.
Referrals can also make a difference in the B2B space, with 84% of B2B businesses initiating the buying process with a referral, according to Edelman Trust BarometerOpens a new window . However, with lengthier and more complex customer buying cycles, an airtight, end-to-end referral program is needed to ensure proper promotion and tracking.Â
Referral and influencer marketing are both evolved versions of traditional advertising tactics â€” word of mouth and the celebrity spokesperson or ambassador. They both employ people outside of a brand to spread the word, which is a crucial component for building trust and credibility. The more external third parties can say good things about a product, the better.Â Â