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Our March Newsletter Is Out…

Our March newsletter went out today. The Opinion piece is reproduced below:

Social Referral Marketing

Vijay Sundaram

Through our work at SocialTwist, we see a new emerging category – Social Referral Marketing (SRM).

What is it? It is the process of acquiring and retaining customers by asking your existing customers and influencers to refer others, through their social connections.

Where’s the opportunity? Businesses sit atop “social assets” – customers, fans and followers, email subscribers, website and store visitors – who have demonstrated affiliation to the business already. Each is connected to hundreds of others who they influence through peer relationships. Asking for a referral is the first step and institutionalizing this process is a gigantic growth opportunity.

Is it big? The Fortune 400th company is a pet store with 827K Facebook fans, 37K Twitter followers, and 2.7 million unique website visitors. They also have 1,145 retail stores where customers walk in every day, and an email subscriber list that’s likely in the millions. Even after accounting for massive overlaps, their social assets must number at least several million consumers, who in turn can reach over 120 million others – an amazingly large set of prospects, all within reach. Compare this with the largest web property in the world – google.com – with 173 million unique visitors. [Update: The last number was obtained from a publicly available source for the largest single Google website, but appears to be understated when compared with Google's published numbers.]

Can it be effective? Every piece of research shows that consumers trust peer opinions far more than anything else. Referrals also tend to implicitly target the right people. Personal referrals that come from trusted parties thus result in dramatically higher engagement, as measured through referral open rates, CTRs, and purchases.

But, can you measure it? The big conundrum around social media strategies is how to measure their results. Not so for social referral marketing. Influencers drive referrals. Referrals drive actions. Actions have value. Most businesses know the value of these desired actions, from clicks to customer acquisition costs. SRM can be measured and expressed in terms of value creation and ROI.

Will SRM become a core strategy for businesses in 5 years? I think so. You may ponder longer – but remember, you heard it here first!

 

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