Businesses love to tout feel-good goals like increasing community outreach, reducing their carbon footprint, and increasing shareholder value.
But a primary goal of the business is to make sales and, the goal of marketing is to find the path of least resistance to making those sales.
That’s why P2P marketing is so essential to successful sales campaigns.
Today, digital marketing via our phones and computers is a huge part of sales, but peer-2-peer (P2P) marketing continues to hold an important place in our hearts and control over our pocketbooks.
After all, you probably remember buying your first candy bar or soft drink based on a friend’s suggestion.
So, we’re here to explain P2P and how beneficial it is with examples in action.
What is P2P marketing?
Peer-to-peer marketing occurs when a customer recommends a service or brand to their peers — collectively, friends, work associates, and family members.
With the advent of chat groups, P2P can even extend globally to “trusted” peers online.
So, if you were with a friend or loved one the first time you spent some hard-earned cash, you probably asked their opinion before plunking down your money.
Even if you don’t remember your sibling saying, “Mom says, buy the green dish soap because it makes the most bubbles.”
Effective P2P marketing combines the happy customer a business cultivates and the influence those customers can have with their peers as they leverage the trust instilled in their buyers.
Still not sure about P2P marketing? Ever ask a friend, “Have you seen any good movies lately?” Did you see one of their movie suggestions?
P2P Marketing vs. Influencer Marketing
While P2P marketing is based on the influence a friend or “peer” has on our buying decisions, influencer marketing is based on the “famous” factor.
Athletes and movie stars have captivated our hearts and minds for more than 100 years.
Fifty years ago, athletes sold everything from shaving crème to nylons to cars. Michael Jordan and Tiger Woods became media darlings with unworldly athletic triumphs and collected unimaginable fees from Gatorade, Nike, and McDonald’s.
Today, there’s another group of celebrities who may be famous only for being known. They aren’t athletes, they aren’t actors, but they sure can sell products.
They are influencers who swing their followers toward products they are also paid to endorse.
The main difference is that influencer marketing flourishes on social-media platforms, not TV.
And while the product seller might highlight their connection with the “influencer,” they count on the oh-so-famous one to post an endorsement on their personal websites and social media pages. And no, it’s not that subtle.
However, the most significant difference between P2P marketing and influencer marketing is that P2P can grow naturally, organically (and still go viral) without any prompting from a company.
In contrast, influencer marketing usually happens when the influencers get paid endorsement fees not to appear in ads but to spread the word to their followers via social media.
Is Peer-to-peer Marketing Beneficial to your Business?
According to Nielsen’s Global Trust in Advertising Survey, a whopping 92% of those responding said they trust word of mouth first and foremost in making decisions over other forms of influence.
Much of that trust in peer influence comes from authenticity (unless your favorite aunt is getting paid to bake you those fantastic cookies with a particular brand’s chocolate chips for a fee).
You trust your family, you trust your friends, and that’s a significant reason P2P works so well. It’s authentic.
And while we are inundated with marketing forms that we actively tune out, we usually speak directly (and listen intently) to our peers.
When we think of a business, it often lacks what makes us gravitate to friends and family: heart and soul. But when our friends recommend a brand, we take their personality and can almost put a face on the product they suggest.
That’s a win for the company and the brand.
It’s all about the senses
You might not smell those cookies your aunt bakes when you go buy the brand she recommends, but you might.
Sensory integration is our brain’s ability to gather information from our senses, categorize it, and then respond to it later.
As our brains search for specific sensations, we make sense of our surroundings based on previous experiences.
The smell of a chocolate chip cookie or even the memory of a friend telling us about one can contribute to decision-making about which brand to buy.
Unfortunately for marketers, the relevance of a TV commercial trying to influence people is nowhere near as likely to be successful.
So, is peer-to-peer marketing beneficial to your business? Absolutely, because it presents a significantly stronger emotional quotient, and it can be harvested for a fraction of other forms of marketing while providing long-lasting results.
When referred to your business, consumers are four times more likely to make purchases.
How to Create an Effective Peer-to-Peer Marketing Strategy
Creating a marketing program that harnesses the power of P2P dynamics can be one of the most transformative endeavors your business has ever embarked on.
Why? Because it will change your business from an impersonal, faceless blob into a company with a personality.
Your job, of course, is to sell amazing products that make their way into conversations and come from a source your new “peers” are happy (or incentivized) to endorse.
Treat your buyers as guests and best friends, and they’ll return the favor.
While we mentioned earlier that a business goal was to make sales, the main goal of any continuing company should be to create repeat business.
You’ve got to retain customers. To do that with a P2P program, you must engage your guests and humanize their experience.
You’re not a stuffy old company; you’re a friend with an honest desire to deliver!
To make the transformation natural and effective, ask for input from your guests. Walmart has greeters at the front door. That’s nice. But wouldn’t it be better to have them near the checkout stands asking shoppers if they found everything they were looking for and if they need help or have concerns or comments? Perhaps.
Successful ways for your company to interact with new peers are many:
1. Implement a way to address issues on-site
Like greeters in person and chatbox online, that solve problems quickly. You can also request your buyers’ share their experiences on Yelp or similar social media platforms.
2. Incentivize customer involvement
This is a realistic way to boost your results.
Some restaurants offer free drinks for a shoutout on Facebook. Others offer complimentary appetizers for a mention on Yelp.
Some ask for an email to receive freebies such as % off coupons, free products, free food, whatever floats their boat.
3. Humanize your interaction
Answer comments and questions on social media quickly. Instant responses invoke fundamental human interactions.
4. Increase quality referrals with social media pros
Higher Logic, Gamification, and Discourse capture customer questions and concerns in private online communities.
5. Engage Qualtronics or Momentive to produce a Net Promoter Score
An NPS is a market research metric procured with as little as a single question: “Would you recommend a company, service, or a product to a friend.”
A similar question asked is, “How likely are you to recommend us to a friend — on a scale of 0 to 10?”
Gathering the information from each of the five interaction methods (all five would be best) will give your company a better understanding of your products and services and how your buyers feel about them.
Fixing problems is essential, and so is championing your ability to listen and improve via social media.
How to Balance Cost vs. Return?
In successfully implementing a P2P program, standard metrics used to balance and quantify costs versus returns must use a sliding scale.
While you may incur upfront expenses that take time to balance out, the long-term results from humanizing your company and its marketing strategy should pay worthwhile dividends.
Sometimes the early cost of incentivizing social media interaction needs to be weighed against the actual uptick in likes, mentions, and page views.
Later, these criteria can be defined by spreadsheets to qualify their effectiveness and continued use or the need to tweak their application for higher results.
Peer-to-Peer marketing has always been a freebie that great brands were able to capitalize on in the past, a benefit of noteworthy products.
Personal recommendations carry significant weight with buyers, and buyer-seller interaction can enhance the experience they get and make them more likely to endorse products and services.
With the advent of mobile phone internet access, the trend towards a higher understanding of P2P and enhancing marketing to take advantage of its prospects is now a necessary part of any successful engagement strategy.
In this context, knowing what to do with the data you collect is fundamental. And that has everything to do with data-driven marketing!
Want to learn more about it? Read this issue of the Rock Content Magazine.