Taking word-of-mouth marketing to the next level
In our first two articles, we wrote on the subject of opportunities in social commerce, and more specifically on the sweet spot where social commerce meets fintech.? In this article we’re taking a step back to explore the oldest form of social marketing - and indeed of marketing in general: word-of-mouth marketing, commonly known today as referral marketing. Kohort’s mission is to help people share their passions, and share deals on the products and services that help them live those passions. We help them do it in the real world, and in the myriad ways we share our joy and our passions online.?
So what is word-of-mouth marketing? In its most simple form, it’s referrals: a form of marketing that relies on the recommendations of satisfied customers to promote a product or service. Sometimes you have to look back to understand how best to move forward. At Kohort we’re convinced that the future of social commerce is rooted in time-old affinity-based word-of-mouth recommendations.?
Below are the elements that make Kohort such a powerful proposition, at the sweet-spot where fintech meets social commerce. Here is why it works:
Referral marketing is built on the foundation of trust. When someone recommends a product or service to a friend or family member, they are effectively vouching for its quality and reliability. This increased level of trust can lead to increased sales and customer loyalty. In fact, 92% of consumers trust recommendations from people they know, compared to just 33% who trust advertisements (Nielsen).
Referral marketing is more cost-effective than traditional forms of advertising. By relying on the recommendations of satisfied customers, businesses can save on advertising costs and still reach a large audience. Referral marketing can result in a 5x higher lifetime value of a customer compared to traditional marketing (Peer1), and reduce customer acquisition costs
Referral marketing can help businesses build stronger relationships with their customers. By providing incentives for customers to share their experiences with friends and family members, businesses can create a sense of community and increase customer engagement. Incentivized referral programs result in a 16% increase in customer engagement (Heathrow).
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Referral marketing can also be used to target specific groups of customers. For example, a business can target customers who are more likely to make referrals, such as those who have recently made a purchase or those who have been customers for a long time. ?In fact, referred customers have a 16% higher lifetime value compared to non-referred customers (Bain & Company).
Referral marketing has the potential to drive higher conversion rates compared to other forms of marketing. This is because people are more likely to trust the opinions of those they know and trust, and are therefore more likely to make a purchase based on a referral. Word-of-mouth marketing can result in a 20-50% higher conversion rate compared to other forms of marketing (Inc).
Kohort brings all of this to your customer happy-path
Kohort brings referrals to payments, where customers passionate about your brand are about to order and receive the ultimate reward: your product. By bringing referrals to the checkout funnel, Kohort addresses a large audience of your brands’ most enthusiastic customers, and therefore its best advocates.
In conclusion, referral marketing is a powerful tool that can help businesses increase sales, build stronger relationships with customers, and reduce marketing costs. Whether you're a small business, a large e-retailer, or a multiservice provider, bringing referrals to payments with Kohort promises to transform the way you do customer acquisition, reactivation, and retention.