To understand what peer-to-peer (P2P) marketing is, let’s start with an example.
Recently I was looking for a new moisturizer for the face. Of course, I could have trusted the many influencers I follow on Instagram, all with strong opinions about the âbest, most effectiveâ options available.
But I wasn’t convinced these influencers had my best interests in mind. Yes, most influencers (and micro-influencers) are successful because they promote valuable products. But they also receive a commission on these publications.
So I handled my problem the old fashioned way – texted my friends and asked them what products they were using.
This does not mean influencer marketing is ineffective. Quite the opposite: When done right, influencer marketing is a fantastic opportunity to expand your brand’s reach and increase sales.
But depending on your team’s budget, influencer marketing can be limited. Additionally, influencer marketing blocks your brand from reaching consumers who always trust their peers first and foremost.
Enter: P2P marketing.
What is P2P Marketing?
Peer-to-peer marketing (also known as P2P marketing) is when consumers recommend products or services to their peers. An effective component of word of mouth marketing, P2P marketing uses personal customer reviews and recommendations to attract new audiences.
Why is peer-to-peer marketing effective?
Given 93% of consumers trust their friends and family out of all the other influences (including review sites, blogs, and social media platforms), it makes sense that P2P marketing will work.
And P2P marketing, a form of Word of mouth marketing, is not new. People have been giving personal opinions on their favorite – and least favorite – brands, products and services long before social media.
If you are new to P2P marketing, you might be wondering why invest in P2P marketing, instead of more traditional forms of influencer marketing?
And what’s the difference, anyway?
What is the difference between P2P marketing and influencer marketing?
P2P marketing relies on your current customers to recommend your products and services to their friends, families and acquaintances. Influencer marketing, on the other hand, uses well-known personalities (usually popular culture figures) to recommend the product – even if they don’t use the product on a daily basis.
Why Peer-to-Marketing is Simply Better
Over the past two years, influencer marketing has been one of the most popular and effective opportunities for brands to reach new audiences by leveraging the integrated communities of these influencers.
However, as mentioned above, consumers still trust their own peers more than anyone else. And influencers can often feel like celebrities to the mainstream – in fact, sometimes they’re real celebrities, like George Clooney with Nespresso. It removes a level of authenticity that you might be looking for as a brand.
Plus, many small and medium businesses can’t afford the typical cost of an influencer. Celebrities or macro-influencers charge between $ 3,000 and $ 500,000 for a single position – and while micro-influencers are undoubtedly cheaper, they can also charge more than $ 500 per position.
Ultimately, P2P is a form of marketing that can feel more and more trustworthy and authentic thanks to real, genuine reviews from peers who aren’t prompted to promote businesses they don’t care about.
To further explore the difference between P2P marketing and influencer marketing, let’s take an example.
Example of peer-to-peer marketing vs influencer marketing
Briogeo, a hair care company, has a referral program in which they credit 500 points to existing customers for each invited friend who makes a purchase. This is an example of P2P marketing.
Briogeo’s influencer marketing campaign, on the other hand, refers to influencers on Instagram (as well as other social platforms) who tag posts with #briogeoambassador, which means that the post is sponsored by Briogeo.
They are two marketing options of equal value, but they serve different purposes. Briogeo’s P2P marketing initiative (in this case, the referral program), aims to tap into the company’s existing consumers to reach new prospects.
The company’s P2P program is likely to be narrower in scope, but has the potential to convert faster than influencer marketing, as it leverages the power of an existing relationship between customers and their friends or family. family. The influencer marketing program, meanwhile, aims to bring Briogeo to a wider audience.
How to start peer-to-peer marketing
You can increase P2P marketing by selling a fantastic product that your customer can’t help but recommend to others. But even if you have a fantastic deal, there is no guarantee that your customers will recommend them to their family and friends.
Here’s how to drive P2P marketing organically.
1. Always ask your customers for opinions and recommendations.
Some older forms of P2P marketing include Yelp, reviews on personal business websites, and good old-fashioned conversations between your consumers and their friends and family. You can still enjoy these traditional avenues by ask for customer reviews and recommendations. Even if a customer doesn’t post a review online, they may feel pressured to share the product with those around them just by having this recall.
2. Leverage referral marketing tools to increase peer-to-peer word of mouth.
You don’t have to rely on luck and hope that your customers will recommend your products and services. You can inspire them to do so by using new tools to leverage P2P marketing on a larger scale.
Engineering references, for example, helps businesses generate customer reviews and referrals, secure event attendance, or even increase in-store foot traffic. The tool ultimately rests on the principle of P2P marketing: that there is nothing more powerful than peer recommendations.
Other tools, like Superior logic, strives to build a sense of community among existing consumers and increase brand loyalty – an essential part of P2P marketing. (Since consumers won’t recommend products or services they don’t feel loyal to.)
Peertomarketing.co has a excellent directory of P2P marketing tools for all budgets and all sizes of business.
3. Conduct NPSÂ® surveys to find out what your customers think of you.
Finding out what your customers think about your product is essential for increasing peer-to-peer marketing. While you could do a traditional survey with many questions, you can capture your customer’s sentiment by asking the classic Promoter net score question:
âOn a scale of 0 to 10, how likely are you to recommend us to a friend? “
As soon as you know your NPS score, you can implement strategies to increase it – and find out what, if anything, is preventing your customers from recommending your business or product to their peers.
4. Encourage referrals by offering discounts and freebies to your customers.
While customers don’t trust influencer marketing because they know influencers get commissions, the same effect doesn’t apply to their peers. Even if you offer credit to your account or offer free products in exchange for a referral, your customer’s identity as a friend or peer will be enough to convince the referred customer to make a purchase.
After all, you wouldn’t recommend just any product to your friends and family for a discount, especially if that product isn’t right for you. But by referring other customers, your customer gives you a vote, making it easy for others to accept the recommendation and make a purchase.
Peer-to-Peer Marketing is a winning marketing strategy
P2P marketing can take different forms depending on your brand and business goals. You can create a referral program, encourage reviews on your site in exchange for a small discount or prize, or host events designed to increase brand awareness with a larger community.
Ultimately, P2P marketing comes down to increasing the incentive of your consumers to share your product or service with your friends and family, which is undoubtedly one of the best strategies for long-term success.
Editor’s Note: This article was originally published in March 2021 and has been updated for completeness.
Originally posted Oct 22, 2021 1:30 p.m., updated Oct 22, 2021
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HubSpot Inc. published this content on 22 October 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on October 22, 2021 10:33:03 PM UTC.