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Trust us: referral marketing is here to stay

Referral marketing – the method of promoting a service or product via trustworthy recommendations / word-of-mouth – has become an essential element of marketing campaigns across nearly all sectors. But does it have any relevance in the more restrictive world of healthcare?


Trust. Hard to gain, easy to lose, so they say. That’s certainly true for companies seeking to sell you something.

As individuals we don’t give our trust freely; companies must work hard to earn it, through integrity, engagement and of course their products and services.

But once we really believe in a product, service or company, we are much more likely to recommend it to a friend or someone we know, who is then more likely to purchase or use the product or service based on the opinion of someone they trust. And that for companies is the sweet spot of what is known as “referral marketing” – customer acquisition via personal word-of-mouth recommendation.

 

Recommendations from people I know

A 2013 Nielsen survey1 about various forms of advertising revealed that “recommendations from people I know” are the most trusted of all, with 84% of respondents saying they trust such recommendations. This compares favourably with other forms such as newspaper adverts (61%) or online banner ads (42%) (see table below).

What is interesting about the survey is that the items that come in third and fourth – consumer opinions posted online and editorial content such as newspaper articles – are also types of “referral marketing”. The person providing the referral does not have to be a friend or family member – it can also be a journalist, blogger, key opinion leader or just another customer posting their experience online.

Indeed online is a major source for referral marketing; research has shown that 72 percent of people have the same level of trust in online endorsements as they do in personal recommendations, and 89 percent verify the recommendations of friends against customer reviews in the internet.2

Impact on consumer sectors

This has already triggered a strategic rethink in many sectors. Many consumer companies have now made referral marketing, offline as well as online, an integral campaign element of their own product marketing strategies.

Referral Marketing

Take the example of Braun launching the CoolTec, a new electric shaver for men. A consumer-to-consumer endorsement programme was initiated, specifically targeting socially active users and let them have the product for testing purposes, triggering a snowball effect that quickly flooded the web with ratings and reviews on global platforms such as Amazon, user videos on YouTube and a variety of blog articles. In this way the product was turned into an experience and new customers were convinced they were making the right choice in buying it. Referral marketing campaigns such as this have been found to work equally well for existing product as they do for the launch of a new product.

What about healthcare?

Of course this is all very well, but what about healthcare? Companies cannot promote their products directly to patients nor can they be seen to be covertly asking others to do it for them. So does that rule out referral marketing in healthcare? Not at all – it is just about choosing the right time and place.

Indeed you could argue that pharmaceutical companies have actually been doing referral marketing for years, but among a very specific target audience: doctors. The influence of key opinion leaders (KOLs) among their peers and other healthcare professionals (HCPs) has always been considered of paramount importance. A key priority of pharma companies remains targeting those key influencers with complete integrity, transparency and engagement – if the KOLs believe in their products and services, their opinion means a lot more to other HCPs than the words of the sales rep.

In terms of reaching the end user more directly, there are probably two key areas where referral marketing can be employed – OTC products and disease awareness campaigns.

OTC is A-OK

Over-the-counter (OTC) products do not have the same restrictions on direct-to-consumer marketing that prescription medicines do, but referral marketing has still been under-employed in this area. And this is despite the fact that this area arguably has greater scope for referral marketing: The opinion of people we trust matters more in healthcare because health is a very personal and important priority.

It is important to bear in mind that point of sale (POS) remains as important as ever for the decision-making process in this area – up to 70 percent of buying decisions are reached at POS.4 It is also true that some people would prefer not to discuss their healthcare needs with others, whether they trust them or not. But we do know that people tend to go online to research their symptoms and potential solutions before they visit the doctor or pharmacy and that creating forums, for example, for other users to communicate their experience of your product, or engaging bloggers who specialise in the area, could be very advantageous.

Disease awareness – spread the word

Of course, if the message you want to communicate doesn’t involve a product at all, then referral marketing is a potentially great solution.

You are not looking for product referrals but message referrals, or knowledge referrals. The same principles apply. Disease awareness campaigns hinge on word-of-mouth communications and recommendations for your campaign.

Getting recommendations / word-of-mouth hinges on finding reasons for people to care and get involved. That can be done by creating compelling pieces of shareable content (for example infographics, patient videos, opinion pieces by celebrities or big names in the area). It is not enough for a campaign to be “worthy” – it must pique interest and resonate on some emotional level, whether that is laughter or empathy – and inspire people to share it or mention it to their friends.

Picking the right strategy

There are other simple methods that can be employed. The healthcare website of one of our clients managed to immediately obtain a ranking of 2 in an organic Google search result by simply adding user statements to the website content.

In another example, by presenting customer opinions on social media channels, we promoted a dialogue in which the users engaged themselves with the product in an exceptionally open and intensive way.3

Ultimately, there are lots of ways to employ referral marketing in the healthcare sector. It is about picking the right method at the right time and, most importantly of all, ensuring integrity of engagement throughout.

Sources:
  • Nielsen Global Trust in Advertising and Brand Messages, September 2013
  • Blog provenexpert.com, Summary from: Revoo Insight Research, 2013
    The Impact Of Online Products Reviews and Ratings On Sales, 2013
    Cone Online Influence Trend Tracker Study, 2011
    Local Consumer Review Survey, 2012
    Service-Provider Report, 2009
  • Marketing campaigns implemented by antwerpes ag for customers

Michael Vorbrink, Ross Williams

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