As the control of brands is slowly moving to the hands of the customers, the economic value of customers is being calculated by their ‘influencing power’ rather than their ‘purchasing power’.
With the democratization of media, the most valuable customer today is the one who has the power to influence the decision of many, using the web in their daily interactions.
The referral factor is not a new phenomenon. It has been around ever since the first salesman came about. Only the tools to influence have evolved and strengthened with the rise of social media and emergence of the referral economy.
With increasing cost of reaching millions through traditional advertising and the diminishing returns of every rupee spent, brands are relying more on authentic word of mouth through social media to drive awareness and purchase.
The networked advocate has the power to influence not only the brand’s bottom line by saving precious marketing spends but also establishing quality connections with the brand. Research has proved that customers who come in through referral are more loyal, spends more money and are more likely to stick around.
However, despite the availability of sophisticated social media tools to analyse their fans, are brands adequately tracking their most networked advocate? Do they know their online habits such as where do they hang around, when are they most likely to talk about their product or service, what is of value to them or most importantly, are they adequately informed?
The referral factor is not a ‘luck by chance’ deal but has to be a planned strategic process. Brands need to sift through their millions of ‘fans’ to identify their most profitable advocates and enable them to share information with the more number of people using multiple touch points if they truly want to leverage the potential,