How word-of-mouth can improve your sales?

For years, we’ve valued the suggestions coming from friends and family, and nothing has changed in this arrangement until today.

One of the most iconic and quoted examples of referral marketing is the Dropbox story. With the advent of mobile apps, especially in the B2C space, referral marketing proved its merit yet again. A series of apps such as Airbnb, Evernote, UBER and others have leveraged this marketing strategy as a part of its app ecosystem, thereby empowering its users on the go apart from ensuring skyrocketing growth.

Airbnb has gone on record and stated that app referrals helped them achieve 300% increase in user signups and bookings.

Referral Programs Build Trust

A referral program gets your potential customers to trust your restaurant mobile app as it has been referred by a friend or a colleague. A program creates a feeling of community among app users. If one prefers to use it, then others also follow suit. Users need a social proof before using a product or a service, and a referral program helps your app achieve more acceptability.

According to a study conducted by Nielsen, 92 percent of the respondents trusted referrals from people they knew. The first step is to get your users to like your product and the next is to get them to recommend it with a reward they can enjoy.

Referral Programs Have a Low Acquisition Cost

Since a referral program itself creates a conversion mechanism that works in the long run, the cost per acquisition of each new user is considerably lower. The users converted through a referral program sign up willingly, and are thus more likely to stay with you as loyal customers. The reward system ensures that there is motivation for each new user to also to refer another or many other potentials.

Referral Programs Will Increase the Number of Customers

Implementing a referral program will increase the number of customers that you have. Therefore, you’ll have to figure out how to accommodate them. Luckily, unlike a one-day promotion, referred customers tend to trickle in on their own schedule instead of all at once.

However, if you do end up with a huge influx of customers, technology has come up with useful tools to manage them. You can start taking reservations, to ensure that there will be enough staff to serve the guests.

If you’re looking for a fresh new way to get more downloads while keeping your current user base engaged, you should implement an in-app referral program.

This is a great strategy because your user acquisition costs will be low and you’ll get a fast return on your investment.


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