What’s in a name? Well, these days when someone you know recommends you try or buy something, chances are, you will. Why? Because the recommendation came from a friend…from someone’s name you know (cue Cheers theme song). This powerful friend to friend connection is forcing marketers to rethink their advertising strategies with their customers in mind. Nielsen’s latest Global Trust in Advertising and Brand Messages research states, “As marketers spend billions of dollars a year on advertising, effectiveness cannot be measured by impressions alone. Resonance is the holy grail of a successful campaign. In a market saturated with clutter, marketers need to reach audiences with advertising messages using the formats that make the most impact, and new findings from Nielsen reveal that trust in online advertising is increasing…Earned advertising in the form of word-of-mouth (WOM) recommendations from friends and family continued to be the most influential source among 84 percent of global respondents.”
Marketers need to start thinking of more creative approaches to advertising, advertising that is not measured by impressions, but rather sales and acquisition. Advertising that is centered around harnessing the voices of their customers. So, what are smart marketers doing to beat the advertising blues?
Let’s take Advance Auto Parts (AAP), for example. A brick-and-mortar brand that has transcended to the digital age with it’s online presence and eCommerce shop. One of the three leading retailers of auto parts, AAP has traditionally leveraged SEO and SEM tactics to drive traffic. But, with competition high, AAP needed more creative avenues to acquire new, high-value customers. AAP knew that friend referrals are incredibly trusted and valued, especially when it comes to buying car parts, so they launched a referral marketing program to let their customers do the advertising for them. By adding an incentive and giving customers an easy way to tell their friends about the brand, AAP currently sees a 25% conversion rate.
Nielsen research, coupled with the AAP story, not only tells us, but shows us, that if brands can activate their existing customers to recommend and refer their friends, they can add an entirely new and effective acquisition channel that drives more than just impressions. Referral marketing can turn that 84% into an advertising army that drives real results.