Let’s start with an example to understand what peer-to-peer marketing (P2P) is.
Recently I was looking for a new facial moisturizer. Of course, I could have trusted the numerous influencers I follow on Instagram, all with strong opinions on the “best and most effective” options available.
But I wasn’t convinced that these influencers had my best interests. Yes, most influencers (and micro-influencers) succeed because they promote valuable products. But they also get commission from these posts.
So I dealt with my problem the old fashioned way – texting my friends and asking what products they were using.
This doesn’t mean influencer marketing is ineffective. On the contrary, when done right, influencer marketing is a fantastic opportunity to expand your brand’s reach and increase sales.
However, depending on your team’s budget, influencer marketing can be limiting. Additionally, influencer marketing prevents your brand from reaching those consumers who still trust their peers above all else.
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 colleagues. P2P marketing is a powerful part of word-of-mouth marketing and uses reviews and personal recommendations from customers to target new audiences.
Given that 93% of consumers trust friends and family members over all other influences (including review sites, blogs, and social media platforms), it makes sense why P2P marketing works.
And P2P marketing, a form of word-of-mouth marketing, isn’t new. Long before social media, people were giving personal opinions about their favorite and least favorite brands, products and services.
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 members.
However, there are some new tools that businesses can use to take advantage of P2P marketing to a greater extent. Amazing Brands, for example, helps companies generate customer ratings and recommendations, guarantee participation in events or even increase pedestrian traffic in the store.
The tool is ultimately based on the premise of P2P marketing that there is nothing stronger than peer recommendations.
Other tools like Higher Logic build community spirit and increase brand loyalty – an important component of P2P marketing. (As consumers don’t recommend products or services that they feel unfaithful to.)
However, if this is your first time learning about P2P marketing, you may be wondering why you should invest in P2P marketing rather than more traditional forms of influencer marketing.
And what’s the difference anyway?
What is the difference between P2P Marketing and Influencer Marketing?
In recent years, influencer marketing has been one of the most popular and effective ways for brands to reach new audiences by leveraging these influencers’ integrated communities.
However, as mentioned above, consumers still trust their peers more than anyone else. And influencers often feel like celebrities in public – sometimes they’re even real celebrities, like George Clooney with Nespresso. This removes a level of authenticity that you as a brand might strive for.
In addition, many small and medium-sized businesses cannot afford the typical influencer costs. Celebrities or macro influencers charge anywhere from $ 3,000 to $ 500,000 for a single post – and while micro-influencers are undoubtedly cheaper, they can also charge more than $ 500 per post.
Ultimately, P2P is a form of marketing that can make you feel increasingly trustworthy and authentic through real, real reviews from colleagues who have no incentive to promote companies they don’t care about.
Let’s look at an example to further explore the difference between P2P marketing and influencer marketing.
Jessica Alba’s business, The Honest Company, has a referral program that gives existing customers $ 20 for every friend they invite who makes a purchase.
This is an example of P2P marketing.
Influencer marketing, on the other hand, refers to the influencers on Instagram (as well as other social platforms) who tag posts with #honestambassador, which means the post is sponsored by The Honest Company.
Both are equally valuable marketing options, but they accomplish different goals. The P2P marketing initiative (in this case, the referral program) aims to tap into The Honest Company’s existing consumers for new perspectives.
The P2P program is likely to have a smaller reach but can be implemented faster than influencer marketing because it harnesses the power of an existing relationship between customers and their friends or family.
Alternatively, the influencer marketing program aims to make brand awareness for Honest Company accessible to a wider audience.
P2P marketing can take many different forms depending on your brand and business goals – including creating a referral program, promoting reviews on your website in exchange for a small discount or price, or organizing brand awareness events for the larger community .
Ultimately, P2P marketing comes down to increasing the incentive for your consumers to share your product or service with friends and family. This is hands down one of the best long-term success strategies.