Customer recommendations are the lifeblood of any successful business. In the age of social media, this is more true than ever.
Nowadays, we’re all cynical about anyone who tries to sell us something. Salespeople get the door slammed in their face. Instead, we turn to our friends for advice.
Word of mouth is powerful because we trust our friends. Friends recommend things because they care for us and want to help us out, not because they’ll make a tidy profit if we listen to them.
What can you do to nudge your customers into spreading the word about your business to their friends?
The obvious solution is to give customers an incentive to recommend you. Paying for referrals seems like a no-brainer, until you look at what actually happens when you pay for recommendations.
Back in 2010, researchers at ETH Zurich looked into how people respond when companies offer incentives for recommendations on social media.
The research made two key findings:
As Alex Littlewood of ZuberRants explains, offering money for referrals is an insult to your customers. Alex writes:
“Your customers are not mercenaries for hire. And their friends and family aren’t chumps. Besides that, when someone gets referred by a person that’s being compensated, credibility and trust gets flushed down the toilet.”
If you can’t pay for customers, what can you do?
Offer a high level of customer service. Research by comScore in 2012 found four key factors in why customers recommend an online business to their friends. In their study:
Free shipping, keeping your promises on delivery times, and a hassle free returns procedure are the best ways to get your customers on your side. Offer all of these, and your customers will want to tell their friends about you, without you even asking.
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