Why don’t marketers do referral marketing?

In previous blog posts, and in the results of Demand Metric’s 2016 referral benchmark study we have looked at some of the statistics behind referral marketing—from the power of word-of-mouth to the value of incentives, all the way to ROI. Across the board, these statistics showed that referral marketing programs are extremely beneficial to the businesses that implement them and put the work in to make sure they offer a positive customer experience. Yet, one of the stats we included in that post—from a study conducted by the now-shuttered blog media company GigaOM—indicated that only 39% of marketers were using referral marketing on a regular basis. Demand Metric’s study showed a figure of 59% of marketers using referral marketing, but of those, the majority (81%) were managing it manually in-house. Which often isn’t much better than having no referral program at all.

Our question at this statistic was simple: why? Why aren’t more marketers using referral marketing when word-of-mouth is one of the world’s oldest and most dependable drivers of sales and brand awareness? Why are marketers exerting so much effort, spending so much money, and investing so much time in marketing methods that, based on many metrics, are less likely to create valuable customer conversions than referral marketing? And when will the “sea change” come that turns referral marketing into one of the top priorities of marketing departments everywhere?

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