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BizReport : Social Marketing : April 13, 2011

Why brands need peer referrals not just friends

In the realm of social marketing, many are focused on building fan- and friend-bases, but in doing so may be missing out on a true beauty of social marketing. The peer referral. Peer referrals are burning up the group-couponing craze. What can brands do to capitalize?

by Kristina Knight

socialtwist.jpgReferrals give added value to an ad - if Friend A sees that Friend B, who knows the likes and dislikes already, is recommending a product or brand, they are more likely to engage with that information.

I had the chance to chat with SocialTwist CEO Vijay Pullar about deal sites, peer referrals and how brands can increase their social profile. SocialTwist helps brands connect with consumers through different types of social campaigns including peer referrals, group couponing and purchasing.

"Peer referrals are recommendations can be categoriezed into two different types: anonymous reviews and friend referrals. Peer referrals are the number one most effective influencing factor leading to a purchase," said Pullar. "While anonymous reviews and expert opinions are reasonably good to assess a product, peer referrals allows consumers to guage the product relative to their personal preferences."

One area that has been helped by peer referrals is the new group couponing space filled by the likes of Groupon. The problem with sites like Groupon is that they attract impulse buyers, not necessarily repeat purchasers. But, there is the chance of turning an impulse buyer into a repeat customer through the big deal.

"Deal sites tend to attract more users through referrals. Brands have a great potential audience here where engagement with ads and deal ads will produce a better yield," said Pullar. "For example, a CPG customer of SocialTwist ran an engagement ad 'Share with three friends and get a buy one get one for free' offer; the ad generated an 8% click-through rate and 66% conversion rate."

Will these deal sites get old with consumers? Not according to Pullar.

"A key trend brands can leverage is that friends know what other friends like and they know what their other friends are looking for," said Pullar. "Turning social and leveraging users social connections significantly enhances reach and potential prospects. Social referrals are currently increasing engagement and customer loyalty."

Tags: peer referrals, social ads, social content, social marketing, social networks, SocialTwist

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