Commentary

Referrals As Conversion Channel: How Do They Stack Up?

Studies and research consistently present us with digital channels, maybe some offline channels, but rarely acknowledge customer referrals. This is why a recent study caught my eye, as it presented comparative measurements showing that customer referrals, by a large margin, were the #1 conversion channel.

In this client survey from Implicit  of nearly 500 clients who also use Salesforce as their CRM system, 3.63% of leads from customers and employees resulted in a sale. The word-of-mouth referral rate doubles the conversation rates of website and social media leads, 1.55% and 1.47% respectively.

So, what can the travel industry learn from this B2B survey? 

Word-of-mouth referrals are still the best, most powerful form of marketing for your business. The experience that people have working with your agency, experiencing your service or staying at your destination is the product. The experiences people have mean more to them than any glossy brochure or google ranking — and they share it.

The most powerful marketing tool at your disposal is customer service. If people enjoy themselves, they tell others about it. If people have a bad experience, they tell others about it. While campaigns may bring new visitors, your best chance at referral marketing lies with the visitors in your care — right now.

I was never more aware of this than when I stayed at The Langham in Chicago. Now, I have had great hotel experiences where I knew that the staff were well-trained and responsive, but the Langham was obviously a step above what I had experienced. I truly felt that I was the most important person in their care when I talked to them. Nothing else was taking their attention, it was fully on me. It made a remarkable impression, even on someone who spends about 60 nights a year in hotels.

The distinguishing level of attention and service was palpable throughout the experience. It was genuine, never forced, but at the same time, unique to each person. One could tell there was a high level of training, but personalities also showed through. At the conclusion of my stay, I asked for directions to my appointment, only a few doors down. The doorman overheard my question and offered to walk me over. When we arrived, he introduced me to the security desk attendant (whom he knew by name).

A visitor’s experience is the best advertising campaign and investment. In his book, Endless Referrals (McGraw-Hill, 1998), Bob Burg states that “Every customer is a salesperson ... train them to sell you.” In travel, this instruction is clear. Every experience, every moment that a traveler has will be shared. Sometimes, it will even be shared digitally.

The concept of training the customer to sell you is an interesting one. That means that all of the employees first must be able to act in a way that reinforces that message and be able to articulate it in whatever capacity they work. 

However, another recent study found that nearly three in four companies do not have “formalized marketing message process for all employees to follow.” Of the companies that did have a formal marketing message process, 60% stated that it was not followed consistently. Therein lies the key, especially for the travel industry. Each employee must know the formal message of the company and how it is displayed in customer interactions.

Word-of-mouth tends to be a forgotten channel with all of the digital channels, social, CMS, and automated messaging taking center stage in our attention; however, I believe that the most powerful marketing message is the one communicated between two humans in conversation. 

Also, this is what makes those experiences with the traveler so vital; those face-to-face human interactions, which leave deep impressions and lasting memories. Those are the ones that will be primarily communicated to friends, associates, and colleagues by true (non-digital) word-of-mouth.

1 comment about "Referrals As Conversion Channel: How Do They Stack Up?".
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  1. Dan Mandle from Colle+McVoy, March 12, 2015 at 11:26 a.m.

    Great recap of the research linked to--and published through--eMarketer. Thank you! Would love to see more such work citing the travel industry's own data and not just reliance upon third-party studies or data more pertinent for B2B or even B2C [product] marketing. #onward!

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