Do you ask for Referrals?
Referrals Have the Highest Conversion Rates of all Customer Acquisition Channels at 3.74%
Consider Koodo’s referral programme. They were able to reduce their customer acquisition cost by 167% and got 75,000 new customers within two years. Their success speaks for itself. Here is another encouraging stat – referred customers bring profits as high as 25%! Perhaps, you should give referral apps like ReferralCandy a shot? Or, if budget permits you could hire specialists.
- Referral: The power of “word of mouth”. Bah, I guess that old cliché saying was right. Referral is by far the highest acquisition channel for conversion rate (almost 4x the average.) In fact, some of the largest, fastest adoptions (Gmail, Dropbox, Zappos) can be credited directly to “word of mouth”. Takeaway? Build a great product, build a great experience, tell the world, ask your customers to tell the world (maybe even reward them)—and you’ll profit.
- Inbound: Content is king. As Bill Gates predicted in an article written in 1996: “Content is where I expect much of the real money will be made on the internet”. Almost 20 years later, this couldn’t be more true, especially in the digital marketing era where choice of content is in the hands of the consumer. Imagine a popup ad (outbound) versus a funny infographic you chose to look at (inbound). Data clearly shows that people who choose to interact with your brand naturally convert higher (28% more than paid marketing). What are your doing to build content to support your customer’s journey? Not sure? Well, for one, it’s time to take a cue from me and start writing those awesome blogs!
- Prospecting: Mining for leads. This one is a bit surprising. Leads sourced from prospecting convert at a third of overall average. But this goes to show you how old-fashioned prospecting such as door-to-door or cold calling just doesn’t work well compared to other sources. It isn’t uncommon these days for me to hear about companies with 60-80% of their leads sourced from marketing. It’s much more efficient to have sales do what they do best: selling, not cold calling.
- Email and Nurture: Emails have the lowest conversion rate. Wait…what?! Don’t fire your email marketing team. This is showing conversion by acquisition channel, which means if your lead source came from emails and nurture, you’re doing something wrong, or you’re just desperate, or…you’re a spammer (which also explains the bad conversion rate). And as we’ll see in an upcoming Marketo Institute blog, emails and nurture both have amazing ROI for multi-touch attribution after you’ve acquired the lead.