Monday, 10 december 2018 | Redacción CEU
It is your last day of vacation and you are looking for a restaurant. You have never been in the city before, so you have no reference and do not know where to start. Of course, the last thing you want is for your last night to be ruined by a bad choice. What can you do? You find the simplest solution on the Net. You decide to check which restaurants are in the area and, while you are at it, you keep an eye on the comments of those establishments that have a better score. A negative comment means a discarded restaurant. One or several positive comments and you already know where you will dine today. Sometimes a recommendation is worth a thousand words but, is it always the case? Is referral marketing still effective? Are brands abusing this resource? How can companies build strategies based on recommendations without tiring users?
Word of mouth, or in this case "comments" to "eyes", is very effective. Especially when these recommendations are offered by friends and family (who are usually those that make up most of the contacts that users have on social networking sites) or when they are made by a public figure that we admire and follow (which is what the succes of influencers precisely relies on). From this unparalleled potential of comments and opinions, especially in digital media, emerges the germ of the so-called referral marketing. The idea is to encourage customers to express their opinions (as long as they are positive) and give recommendations about brands. Thus, it helps to encourage the purchase of their products and services.
Studies agree on the great capacity of recommendations to influence the purchasing decisions of users. References serve as economic and effective resources when it comes to attracting new clients, as well as increasing brands popularity. However, when these references are forced or are perceived as untrustworthy, they lose their effect. In fact, when this happens, promoting them can even be counterproductive. For example, this is the case of the celebrities who try to promote products that do not fit in their lifestyle or their image insistently, or a friend who persistently shares post on Facebook about brands that they are not interested in, just for having more options to win a raffle.
When users recommend something, they usually do it spontaneously and naturally. At least, that was what originally happened. For the last years, companies which are aware of the multiple opportunities that referral marketing offers, have bet on developing all kinds of strategies based on recommendations. By these means, these firms not only reward users who share information and offer their opinion about their products, they also demand more feedback. Every time customers call their phone companies, they should subsequently undergo a brief and voluntary survey. Every time people travel by plane, they receive an email to evaluate their experiences. There are a lot of examples, since the relationship with brands has never been as close as it is now.
This context has favored a different way of communication between brands and consumers. It is true that, apart from reporting great benefits to its promoters (see the example of Amazon or Dropbox), referral marketing has also been positive for customers (they now have influence over brands, an access to more detailed and specific information about the products, their opinions have been democratized,...). On the other hand, customers have begun to show certain symptoms of boredom due to so many requests for opinion.
Either by their own initiative or increasingly pushed by brands, users have jumped at the opportunity to give their opinions about everything. The platforms where this strange "hobby" is practiced are more and more numerous. Thus, users have begun to experience fatigue and do not respond to this strategy as they did before. Besides, in the same way that companies have learned to take advantage of certain strategies on digital media, customers have learned to identify when brands are resorting to certain types of marketing plans and they have even begun to make use of them.
Users have lost their innocence. They are aware that a comment can have a great impact on companies, especially when they are small. Many of them, tired of the high demand for feedback, respond negatively to these surveys just to show their displeasure, not because the service or product have not met their expectations. On the other hand, the excessive use of this strategy by some companies has favored the loss of value of opinions. As we mentioned before, when recommendations are forced, they lose their effectiveness. This excessive bet on the evaluation of businesses has also had an impact on the loss of freshness and originality. Moved by the recommendations that users give, clients usually choose the same places in a homogeneous manner.
Of course, this does not mean that the referral marketing strategies are no longer useful (in fact, they can be very effective, especially for small businesses). They should simply be approached with a new perspective. Brands cannot risk losing the trust of their potential customers because they are betting on this type of strategy in an excessive way. It is important for them to always think about their clients' desires, because their final goal is to satisfy them, so it is important for companies not to force or harass them. After all, it is about a greater commitment to quality. Strategies must be custom-made for the companies. Just because something works for others, if does not necessarily have to be the most appropriate strategy for your brand.
At The CEU IAM Business School, we are committed to a current training which is adapted to new trends both within the digital world and outside. Our Master's Degree in Digital Marketing is a good example of this. This program will enable you to become a specialist in the communication and marketing of online products through the use of different digital strategies: SEM, SEO, inbound marketing, social networks, affiliation or display campaigns.