This guest post in tnooz compares the effectiveness of customer referrals for driving new business particularly relevant in hospitality in an environment where people are looking to de-stress about their choices. 92% of customers are known trust referrals from friends, and people are four times more likely to try a product generally when they are referred to it.

The article discusses a recent study across three methods; referring a friend by name and email address, leading to just 0.4% providing at least one referral; incentivised referrals, where offering the original customer a perk such as discounts increased referrals by 1.9% – especially popular with millennials; and personalised earned referrals, where customers were kept informed on their own behaviours and the rolling total of points earned, showing the more personaised the contact, the more engaged the customer. Almost 5% referred others using this method.

The writer concludes that hospitality brands that want an effective word-of-mouth programme should combine referral programs and a broader strategy to create customer value and engagement on both sides of the referral programme.

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