You're creating a referral program. Do you use a digital referral platform or a traditional approach? We'll outline both to shape your referral strategy.
Referrals have always been a powerful way to grow your business, but with so many ways to ask for referrals, which method should you choose? Should you stick with offline referrals, or is it time to embrace online referrals?
Choosing the right referral strategy will help you get more leads in the future. If you’re not sure where to start, you’re in the right place. We'll break down the differences between online and offline referrals, explore the benefits of each, and help you decide which approach is best for your business.
Offline referrals are the traditional referral method, usually through word-of-mouth, physical referral forms or casual mentions in person. These are the referrals that happen naturally during conversations or through handing out referral cards. Basically, any referrals that have a manual tracking process, like a physical referral form or an Excel sheet for tracking, are considered offline.
A typical offline incentive referral program looks like this:
Offline referrals have been around forever and are often considered trustworthy because they come from someone you know personally.
Online referrals are the digital version of referrals. They happen through digital referral platforms, emails, social media, or specialized referral programs. When a customer shares a referral link or fills out an online referral form, they’re making an online referral. This method is faster and can reach a wider audience.
A typical online incentive referral program looks like this:
Online referrals are particularly popular because they’re easy to track and manage, allowing businesses to automate the process and reward referrers more efficiently.
Let's dive into the main differences between online and offline referrals so you can decide which one is right for your business.
Online Referrals: With online referrals, your reach is virtually unlimited. Your customers can share your referral link with anyone, anywhere, instantly. This makes it easy to tap into a wider audience and attract new customers you might never meet in person.
Offline Referrals: Offline referrals are usually limited to the people your customers interact with face-to-face. While this can mean fewer referrals, they often come with a high level of trust because they're shared in a personal context.
Online Referrals: Online referrals are easy to track and typically have automatic referral tracking tools. You can see who referred who, when it happened, whether the referral led to a sale and if the reward has been sent.
Offline Referrals: Tracking offline referrals can be trickier. Since they’re often verbal or involve physical forms, it’s harder to keep tabs on them. Analytics for referrals have to be manually tracked in a spreadsheet or something similar, which may take more time.
Online Referrals: Online referrals are incredibly convenient. Your customers can refer someone with just a few clicks, whether they’re at home or on the go. The convenience of online referrals makes it easier to generate more referrals in less time.
Offline Referrals: Offline referrals require more effort from your customers. They need to remember to mention your business in conversation and hand out a referral card or manually fill out a lengthy form and then bring it into your business, which can slow down the speed of referrals.
Online Referrals: Online referrals benefit from automation. You can set up a referral program that runs in the background, making it easy for customers to participate without much effort. However, they may lack the personal touch that comes with a face-to-face recommendation.
Offline Referrals: Offline referrals often feel more personal. When someone takes the time to recommend your business in person, it carries a lot of weight. This personal connection can make the referral more impactful, even if it’s less frequent.
Online Referrals: Rewards are usually automatically sent with online referrals. Rewards are usually sent with some type of prepaid card or gift card instantly. Meaning faster delivery to your customers and saving you time.
Offline Referrals: With offline referrals, you usually have to send out a gift or reward manually. This often means driving to the store, grabbing a gift card and either delivering it or sending it to your customer. This can take more time, but if you prefer a personal gift, you can buy your referrals whatever you think they’d enjoy.
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Expanded Reach: Online referrals allow you to reach a wider audience, leading to more referrals overall. This is especially useful if you want to grow your customer base quickly.
Cost-Effective Growth: Online referral programs can be more cost-effective than traditional advertising. You leverage the networks of your existing customers to bring in new business, reducing the need for expensive marketing campaigns.
Enhanced Tracking: With online referrals, you can easily track every aspect of the referral process, from who made the referral to whether it led to a sale. This data helps you refine your referral strategy over time.
Higher Trust: Offline referrals often carry more trust because they come from someone the potential customer knows personally. This can lead to higher conversion rates when the referral is made.
Personal Connection: There’s something powerful about a face-to-face recommendation. Offline referrals often feel more genuine and can strengthen the relationship between your business and the referrer.
Niche Targeting: While offline referrals may not reach as many people, they can be more targeted. When a customer refers your business to someone in their close network, it’s likely to be a highly relevant and interested lead.
Choosing between online and offline referrals depends on your business goals, industry, and target audience.
If You Want to Reach a Larger Audience: Online referrals are your best bet. They allow you to tap into a broader market and generate more referrals.
If You Value Personal Connections: Offline referrals might be more effective. They’re often more trusted and can lead to stronger, long-term customer relationships.
If You Need Both: Why not combine the two? With Locorum, you can manage and track both online and offline referrals, giving you the flexibility to grow your business in multiple ways.
For the best results, consider integrating both online and offline referrals into your strategy. This way, you can enjoy the benefits of both approaches, from the wide reach of online referrals to the high trust of offline ones. How you may ask? Locorum helps bridge the gap between offline and online referrals.
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