Benefits of referral Schemes in Marketing

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Going by the different kinds of marketing that usually help sales, referral marketing also known as pyramid scheme tops all of it. Referral marketing is a method of promoting products or services to customers through referrals. Such referrals influence businesses through appropriate strategies and usually works spontaneously. It is one of the oldest forms of marketing. Usually works with offering rewards to the customers, creating contacts worldwide and most importantly to recommend products and services from consumers and B2B brands. Unlike the traditional approach to referral marketing, online referral marketing is an internet based approach. Customer behavior is tracked through web cookies, which in turn increases the brand awareness. The major focus is interaction with customers, to share their experiences, complaints, nature of the product through social websites and/or their own website, where customer reviews and feedbacks are too common nowadays.


  • Referral customers are more profitable and loyal
  • Higher contribution in the margin and beneficial in the long run
  • Cost efficient and positive value differential
  • Increased interaction with like people
  • The value contributed by referral customers is higher than non-referral
  • Guarantees customer satisfaction
  • Helps in establishing long-term relations with customers.

While a lot of pros to this kind of marketing, cons sure will add up to attain a perfect balance. A major drawback to referral schemes is that many opportunists abuse the programme, for to acquire referral fee, many customers recommend unsuitable products.

But in comparison, the referral schemes yield twice the results of general sales. But to avoid the cons to step in proper and organized knowledge of data should be maintained. A particular goal or standard should be set for every service and/or products being offered and the last is to promote the scheme in a formal yet creative manner.

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