Whether it’s Apple’s billboards scattered along the highway or L’Oréal’s pop up commercials before every YouTube video, everywhere you go and everywhere you click, a company is trying to sell you something. However, these endless advertisements may be doing more harm than good by annoying their audiences with products people are not interested in. In 2015, over 45 million Americans blocked advertisements. Out of people who did not block ads, research reports that the average person sees over 5,000 advertisements a day, yet only 12 of those advertisements make an impression.
How can companies fix this problem of constant irrelevant advertisements? By advertising to people who will truly be interested in their products. Companies can collect endless data about their market such as their gender, age, and occupation to target their advertisements to a specific audience, but they can’t know the whole story of what exactly customers want.
So, how can companies overcome this barrier? Through referral marketing—having your existing customers refer their friends to your company. Referral marketing is extremely effective because who knows what your potential customers want better than their friends and family? Once your current customers start using and loving your products, they will refer their peers who they know will like the product as well. This will allow your company’s advertisements to make an impression on those who see them. Research shows that 30% of people are more likely to respond to companies’ offers when they have been reposted by a friend. Referrals eliminate people’s frustration of irritating advertisements because customers refer like minded people who are more likely to engage into this form of marketing.
Image Credit: Shuttershock
Not only will your company be able to acquire more customers through these referrals and advertisements of your products, but referrals prove to perform better in the long run. Referred customers have a 16% higher customer life-time value. Your customer base will increase along with their purchases.
Ultimately, referrals allow your company to receive more sales and more pleased customers who receive advertisements that make a positive impression on them, instead of annoy them. So, out of the 5,000 advertisements someone sees in one day, make sure your company’s brand makes a positive impact.