The 5 Levels of Referral Marketing + FAQ’s

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Referral marketing has been around for a while. It is one of the most effective ways to market your business because it comes from the mouth of your customers. For the longest time, this type of marketing has been limited to offline channels but in the past few years, a new marketing channel has emerged. The channel is virtual and happens almost entirely online. 

In the COVID age, referral marketing is essential for every business. 

There are different levels of referral marketing that you can use to help grow your business. This blog looks at how you can use the different levels and what you can use to increase and track your referrals. 

What is Referral Marketing?

Referral marketing is about the word of mouth advertising, but specifically, it’s about getting people to refer your business to others. It’s about the quality of the customers you’re getting, and it’s about creating a community of people who trust you. This is important because it’s actually the best way to attract customers to your business. When done right, referral marketing is one of the best ways you can get new customers.

Here are the five levels of referral marketing:

The First Level: Satisfied Customers

The first level of referral marketing is the most basic and most important. It is a referral that comes from a satisfied customer and is motivated by the pure satisfaction of helping others.

It could come in the form of a simple “bring your friends here and get a free coffee” campaign or it could be a more elaborate program such as a referral program on your website. The key is that it is not motivated by any compensation.

The Second Level: Word of Mouth

The second level is where the referrals come in. By now, people are starting to talk about your service or product. This is where the credibility comes in. If they haven’t bought your product yet, they will soon. The second level is also where reputation comes in. People will talk about how great your service/product is, and you will have a reputation to live up to.

This is the stage where you need to be sure to keep your promises and keep your product/service good or people will talk about how you didn’t live up to your promises.

The Third Level: Shared Experiences

The third level of referral marketing is sharing an experience. If one customer has a great experience, they are likely to tell their friends and family. This is an experience level of referral marketing. A positive review or a recommendation can bring in new consumers, especially when it comes to B2B. Referral marketing is a great way to spread the word about your business, product, or service. You can even encourage your customers to spread the word by rewarding them for doing so.

If you can get your customers to share a positive experience with others, the sales will keep flowing in.

The Fourth Level: The Introduction

At the fourth level, the referrer makes an introduction to the prospect. The introduction may be a specific introduction, or it may be an introduction to the company; for example, when a prospect is given a tour of a company.

In other cases, the introduction may be to a specific person, as in the case where the referrer “pushes” a prospect to meet someone.

The Fifth Level: Make the Sale

The fifth level is to make the sale. There are many different ways to go about making the sale, but there is one rule of thumb. You want to make the sale as quickly as possible. If you’re looking to build a referral program that gives you a lot of good leads, then you should make the sale as quickly as possible.

There are many different techniques you can use to make your sales.

Referral Marketing FAQ’s

How do I increase and track my referrals?

We outline just how to do this in our Ultimate Guide to Referral Marketing in 2021. Read all about and implement referral marketing techniques in your company today!

What are some common mistakes that people make with referral marketing?

There are a few mistakes people make with referral marketing.  Firstly, they may not have a presence online where they can ask for referrals. If a potential customer were told to go to a website and submit a contact form, but there is no website, then that is obviously a problem!  

Secondly, referral marketing is not a one-time event. A lot of marketers make the mistake of thinking that the time to ask for referrals is when they first meet a contact. This is not true. A lot of business occurs with people who have already purchased from you, so when they come back to order again, that is the time to ask for more business.  

Lastly, people may not know how to ask for referrals. They may do something like send a mass email without personalizing it. Sending out unsolicited emails is a great way to lose friends or even get yourself marked as spam!

What are your thoughts on the idea that “If you don’t promote your brand, no one will”?

The notion that if you don’t put yourself on the map, no one will know that you exist, is a bad one. In the age of information, it is very easy for someone looking for something to discover your product or service. So unless you are a new entity in the market, there is no need to promote yourself over others.

In fact, trying to promote yourself at the expanse of others will only make your brand and product look bad. Focus on giving out good information and improving your product, rather than promoting your own brand.

 Remember, great products and services are what make your brand popular, not flashy ads and promotions.

Closing With Referral Marketing

Referral marketing is one of the most successful ways to grow your business. This is because the people who receive referrals will naturally trust the people who send them. In this post, you’ve learned the 5 levels of referral marketing. While you may see immediate results with level 1, you may need to be patient with the other levels.

We know that it can be difficult to find the right strategies to build your business, and we wanted to give you some insight into the best ways to drive traffic to your website. We hope that this article will help you with your marketing and lead generation efforts.