How does recommendation marketing work

Spread the word: How does recommendation marketing work?

When it comes to finding the nearest restaurant, a certain product or even a new employer, people are increasingly turning to online reviews. According to a study by Splendid Research, three out of five respondents consider customer ratings to be relevant. 70 percent are convinced by positive reviews about the purchase. Brokers can also benefit from this. The question that arises: How does recommendation marketing work?

What is that?

The basis of recommendation marketing is word-of-mouth propaganda. A potential customer learns about a service, a product or the broker through a third party, be it among friends or through online reviews. With the right recommendation, that third party can ensure that the potential client turns to a specific broker. The marketing institute calls this process active recommendation. Testimonials or letters of reference, in turn, are considered passive recommendations. With the latter, no customer is in focus. Nowadays, recommendations usually take the form of good reviews on the common Internet platforms.

Why should I use referral marketing?

Quite simply: It is considered to be the most successful marketing measure of all. As early as 2008, 42 percent of Germans were of the opinion that recommendations are becoming increasingly important when making purchasing decisions. This is the conclusion reached by the “Opinion Leader” study by defacto.research. A trend that has not stopped in the last decade. On the contrary. Portals such as ProvenExpert, Google My Business or WhoFinance, where customers can find out how other users think about companies, are very popular. According to the insurance broker Marco Mahling, recommendations are still today for customers "proof that they can expect a competent counterpart".

How does recommendation marketing work?

It is important that the customer is convinced of the performance of a company or product - otherwise it is unlikely to give a good rating. At the same time, it can also help to point this out in the conversation. “I really had to stay on the ball and regularly point this out to the customer in a friendly manner,” explains Mahling in this context. But your own employees can also recommend. According to CentralStationCRM, they are even considered the best advertisers because they know the products.

“These ratings are worth their weight in gold when it comes to acquiring new customers.” - Marco Mahling, insurance broker and financial advisor

A few tips at the end

And what should the broker pay attention to with regard to customer ratings? First of all, it's important to focus on specific platforms that fit the goal you're trying to achieve. In the long term, the broker can also consult other platforms in order to be able to come up with positive reviews on a large scale. Presence is also an important part of this marketing strategy, advises Zielbar. Be it in the social networks or at the next DKM. The more presence a broker shows, the more likely he is to attract reviews. Finally, it is advisable to respond positively to these reviews and to explain your own point of view in the event of any negative comments. "For me, that is part of an authentic external presentation," says Mahling.

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Studied art history and literature. Likes to write. So happy that he works on it both in the NewFinance editorial team and in his spare time. And should he not write, he is interested in e-sports, business and who is slipping on the stock market.