How to Reap Relative Rewards with Referrals

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by Michel Fortin

A recent issue of "Global Internet Marketing News" reported an interested piece on how word-of-mouth advertising is statistically getting more nods from the online business community let alone the consumer populace.

Titled "Word-of-Mouth Drives E-commerce," the article pulled some interesting facts from a recent three-part study of US consumers conducted by ORCI (Opinion Research Corporation International) -- a study originally commissioned by "priceline.com" [May, 1999].

The study appears to corroborate the fact that third party referrals are fast becoming an essential part of doing business online. For instance, one of my previous articles entitled "Negative Bytes Can Come Back and Bite You" explained that a person who is satisfied with a product will tell 3 others about it. But if that person is dissatisfied, 10 others will get an earful.

However, the article did not neglect to emphasize the point that, "online, those numbers are easily multiplied." And not surprisingly, ORCI's study has proven that reality.

It found that Internet consumers are more likely to tell their friends and family about their online shopping experience than about favorite restaurants and movies. The study also found that the typical Internet consumer tells 12 additional people about their online shopping experience. (This compares to the average US consumer that tells 8.6 additional people about a favorite film and another 6.1 people about a favorite restaurant.)

According to GIM's article, word-of-mouth referrals are likely to continue to be a very important source of business for e-commerce merchants, particularly given consumers' anxiety about the security of online transactions. With credit card fraud on the increase (although at a crawl when compared to the explosive number of online transactions), the importance of referrals from people we know and trust is increasing significantly on the Web.

While online consumer fears overall are on the decline, referral or network marketing is still the surest way to develop and communicate instant credibility -- and credibility is what it's all about. Thus, good old word-of-mouth advertising is becoming not only an essential component of doing business on the Web but also exceedingly vital to successful, long-term online marketing.

The moral? Get out and about -- both online and off. Get yourself known as an expert in your field. Focus on a specialization -- a niche. Write articles for newsletters, publications, and e-zines in your industry -- especially those read by your target market. And actively participate in discussion groups, boards, and lists.

Proliferate the knowledge of your existence through third parties by getting others to talk about you and to link to you. Anchor your business, your product, or your Web site in the mind of the marketplace by, for example, targeting a niche. In other words, center on a specific theme, concept, or market. Of course, render superior customer service.

Make it simple for them to get others to at least visit your site, such as by using referral services, and most important, set up your own affiliate program. What better way is there to sell your wares than through those who know your consumers better than you do?

In short, multiply your marketing.