Referral marketing: The importance of personal experiences on the Internet is growing
Booking a hotel, buying a new washing machine, purchasing an e-bike - but how do we decide on the perfect product in the mass of options? An article by guest author Alexander Hundeshagen, Managing Director of Reputativ.
Online recommendations based on real experiences have an enormous influence on the purchasing decisions of potential buyers. Personal testimonials create trust and have a more authentic effect than the messages of classic forms of advertising. Potential customers are not only influenced by recommendations from their own circle of acquaintances, such as neighbors or colleagues at work. Instead, interested parties are increasingly researching reviews on online rating portals specifically on the Internet before making a purchase in order to form an opinion.
The importance of valuations in times of the Corona crisis
The global Corona crisis has further strengthened this phenomenon. The more people buy products digitally, the more important online experience reviews become for prospective buyers' purchasing decisions. According to a 2020 study by Capterra on the topic of online reviews, the importance of online experience reports has risen further for 16 percent of respondents since the start of the pandemic. Only 5 percent of German consumers do not read digital customer reviews before making an online purchase.
Companies can take advantage of this trend and win over new prospective customers by using strategic recommendation marketing and the targeted development of positive testimonials from real customers.
How ratings create trust
The trust of Internet users depends on various factors. The more reviews there are of a product or company, the greater the user's trust in what the reviews say. A product should have at least between 5 and 20 reviews to be trusted. In addition, current reviews are trusted more than older reviews.
Although genuine positive user reviews are the key target in referral marketing, the negative online reviews can also provide opportunities.
By means of critical testimonials, companies can show how professionally they deal with negative feedback and to what extent they respond to users. Negative reviews or the responses to them can thus also create trust and increase the credibility of companies. Many companies currently do not respond to reviews at all, yet according to the Capterra study, responses to reviews are read by 91 percent of the users surveyed. 42 percent even stated that they would like to see a reaction from the company.
Companies should comply with this request and comment promptly on both positive and negative reviews on the web. However, companies should always respond in a professional manner. Strong emotions such as anger at criticism, justifications and recriminations do not belong in the responses. Those who find this difficult should rely on the expertise of experts who keep an eye on all the relevant review portals, take over community management and develop a strategy for attracting positive reviews from genuine customers.
Often, dissatisfied customers can also be invited back for a clarifying discussion. If misunderstandings can be cleared up or problems resolved in this discussion, users will at best subsequently update their negative rating to a neutral to positive feedback.
Practical tips for referral marketing
For customers to make recommendations publicly and thus become true brand ambassadors, customer proximity and good communication are particularly important. For example, customers can be asked proactively for a rating after a completed purchase or a consultation. Good customer service is also particularly crucial. Whether in a face-to-face conversation or via other communication channels such as telephone, e-mail, or on social media - the personal and individual wishes of the clientele should always be specifically addressed, because every customer is of great importance for referral marketing.
