Many customers today give more attention to, and often trust the opinions of those who may have had some experience dealing with a product or service that they are thinking of trying out.
The facts speak for themselves:
Now think about this…
According to The Viral Agency, the average consumer in the US for instance, mentions specific brand names 60 times per week in conversations on and offline. Another noteworthy insight is that about 66% of all brand related recommendation conversations are positive and about 8% are negative.
This means that if you can get more people talking about your project, brand, product or service - as long as you have a good quality offering and great customer support - you can grow your business customer base exponentially through peer-to-peer advertising.
Let’s take a step back...
What is Peer-to-Peer (P2P) Marketing & Advertising?
P2P marketing is a promotional technique where brands directly or indirectly encourage customers to recommend their brand, product or service to other people in their social network. In such instances, customers then act as advocates for the brand and its service or product offering.
Successful P2P marketing campaigns prove that buying decisions are driven more by recommendations than by price. According to a report by Heinz Marketing, companies with formalised referral marketing programs saw 86% more revenue growth when compared to those that didn’t.
Even companies that don’t have a dedicated P2P marketing programme in place still benefit from customer evangelism. However, those who benefit the most are the firms that understand that fostering a recommendation marketing culture and focusing more on P2P marketing are some key drivers essential for sales and user acquisition success.
Referral & Affiliate Programmes
Both are important marketing strategies. A major factor that cannot be overlooked is that businesses should ensure they have attractive affiliate/referral programmes to complement their offerings and incentivise people to share their experiences when engaging the product or service. The key difference between affiliate and referral marketing is that the former focuses on third-party brand advocates driving customers to your business for a flat fee, while the latter focuses on rewarding your existing customers when they invite others in their social networks to try out a product or service.
Case Study: Turning digital asset buyers & sellers into brand evangelists
A sector that seems to understand this concept is the digital asset industry wherein you find some of the most successful projects typically being those that offer great referral incentives. Some great examples are P2P digital asset exchange platforms such:
Now consider the 66% of buyers who report that consistent and relevant communications are a key factor in their buying decisions, according to HubSpot.
Ask yourself: what if you managed to get people talking about your brand, product or service and the incentives you offer consistently and the key messages were being delivered by sources that they trust i.e. peers - how effective would your marketing be then?
The importance of communicating business value proposition via proper information distribution sources
There are three key motivations that make people susceptible to social influence: 1) the need to be accurate, 2) the need to be affiliated, 3) the need to maintain a positive self-concept.
Influencer marketing was rated as the fastest-growing customer acquisition channel in a survey of 125 online marketers according to Tomoson. In another study by the Word of Mouth Marketing Association (WOMMA), 79% of brands see the need to increase their investment in online recommendation marketing. They also report that referral marketing impressions are reported to drive sales 5x greater than the equivalent number of paid impressions, and this discrepancy widens for high-consideration purchases. Due to the high ROI of P2P marketing, 73% of enterprise companies have a dedicated budget for influencer marketing according to Forrester.
Why P2P Marketing via Social Media?
According to Nielsen, 65% of social media users indicate using social networks to learn about brands, products, and services. And when it comes to recommendation or p2p marketing online, 55% of shoppers choose to share news about online purchases via Facebook, 22% via Twitter, 14% via Pinterest, and 5% via Instagram, according to Fedelta.
Other research from sources such as Market Force suggests that over 80% of consumers report social posts from their friends and peers directly influence their purchasing decisions. It’s quite evident that having a p2p marketing team or working with peer-to-peer marketing experts can be the difference between success and failure to onboard users, grow a customer base or increase revenue and profit.
According to Alida, 43% of social media users report having purchased a product after sharing or favouriting it on Facebook, Twitter, or Pinterest and 40% of consumers say they’ve purchased a product after seeing it used by an influencer on YouTube, Instagram, or Twitter, according to Annalect.
Conclusion
Brand loyalty overcomes any rational-based or price-based decision-making, and powerful emotional drivers tend to almost always override incentives. It is thus important for businesses to know that peer-to-peer endorsements are the most effective way for their customers to help other people make informed purchasing decisions through sharing personal experiences.
Peer referrals break through the noise in a way that paid media and other marketing channels just can’t. According to MarketShare, recommendation marketing has been shown to increase marketing effectiveness by as much as 54%. According to Extole, referred customers are 400% more likely to refer customers to your brand than non-referred customers.
Where to begin?
Not investing in P2P marketing means that your project, brand, or business has no human interaction marketing elements that can yield the fruits of peer brand endorsements. It is therefore imperative for any business looking to scale in today’s world, to adapt to a new dawn - one that is heavily dependent on social marketing for product or service offerings to reach their full scaling potential and businesses to grow in meaningful ways.
Invest time and resources in devising not only a great customer referral program, reward and loyalty discount offerings, but more important, an effective P2P marketing strategy that is actionable and measurable. You can do that by making niche influencer marketing part of your marketing mix in-house or hire a team or P2P marketing specialists to help you realise your growth goals!
