Since its inception, Friendbuy has stayed on the cutting edge of referral marketing. By its digital nature, referral marketing is always evolving, and we are constantly updating our platform and implementing new best practices to stay ahead of the curve. This post outlines some of the referral marketing trends marketers see emerging this year and how we think they might affect the future of referral marketing. Refer back to this post later to see if our predictions pan out.
1. Consumers Want an Integrated Brand Experience
Brands were forced to adapt fast in 2020. As 2023 unfolds more calmly and companies and consumers have adapted to virtual interactions, the focus is shifting to creating an integrated brand experience. This integrated experience extends to all channels, including referral marketing.
Friendbuy makes this easy by creating a seamless referral experience within your website, native mobile app, email, and SMS marketing. For example, weight loss brand Lose It! promotes its referral program through its native mobile app with a “Refer a Friend” CTA on the account page, which makes it easy for advocates to share offers with their personalized URL (PURL) or through text, email, or Facebook.
2. Customer Centricity Takes Center Stage
The brands that have thrived throughout the pandemic are the ones that put their customers first. This includes creating an exceptional customer experience at every interaction, from the first moment a customer learns about a brand through the time they make a purchase and beyond.
Referral marketing with Friendbuy allows brands to engage customers at several steps along the customer journey:
- First interaction: A user sees on the website that they can get rewarded for referrals, or a friend learns about the brand from an advocate.
- Post-purchase: A widget overlay prompts sharing, making referral part of the brand experience.
- Referral program promotion opportunities: Customers can be reminded of the program with email, social, SMS, and push campaigns.
Afterpay is an example of a company that incorporates referral marketing throughout the entire customer experience. The brand displays a prominent referral CTA in its native mobile app, so customers can refer on impulse. Afterpay also leverages SMS and push notifications to drive referral program awareness when a customer checks their order history. Afterpay knows when its customers are interacting with the app, so it takes that opportunity to prompt a referral. The company also segments its customer list and sends dedicated refer-a-friend emails and SMS messages that incorporate the customer’s unique personalized referral link for easy sharing.
3. Marketing Budgets Are Getting Tighter
Whether because of reduced revenue or the expectation of an economic downturn, many marketing teams have tighter budgets in 2023. This will force marketing teams to evaluate what’s really working and cut costs in areas that are underperforming. Because referral marketing offers more bang for the buck and better ROI compared to other channels, we expect to see more investment here.
Pet food brand PetFlow made a strategic decision to significantly reduce the number of promotions it offered on its website and instead started making the referral program a more prominent fixture within its brand experience. This helped the brand acquire new customers at a much lower cost per acquisition (CPA), and also increased customer retention because customers who were rewarded for referring came back to order from PetFlow with their referral credits.
4. Micro-Influencers Remain Important
With limited ability to shop in-person since the start of the pandemic, e-commerce has grown dramatically, and with it so has the role of micro-influencers. Consumers are also looking for authenticity more than ever, so having micro-influencers promote your brand to their dedicated followers can be a valuable marketing investment.
Friendbuy gives you the tools you need to engage and motivate micro-influencers, including:
- Analytics to identify top advocates
- Campaign customization so you can create targeted offers for them
- Advanced rewards that allow you to configure tiers based on the number of purchases generated through their referral links
In addition to its standard referral program, vitamin brand Persona Nutrition uses Friendbuy to cultivate ambassadors with its PersonaPack influencer community. High-value subscribers get a personalized email invitation to opt in to the program, and Friendbuy sends a personal referral link via email. When a referred friend makes a purchase, reward emails are automatically sent to the advocate.
5. Brands Are Getting Creative
There is no denying the success of a good referral program, which is why brands are starting to take it to the next level with advanced rewards programs. Tiered rewards allow brands to reward advocates based on the type of product the friend buys, how much they spend, or how many successful referrals they have made. Friend incentives can also be tiered based on how much they spend, which allows brands to ensure ROI at any level.
Mint Mobile leverages a tiered reward structure for its referral program by rewarding advocates with higher credits as they refer more friends. This credit is applied toward the advocate’s next mobile plan renewal. The reward structure is:
- 1 referral = $25
- 2 referrals = $30
- 3 referrals = $35
- 4 referrals = $40
- 5 referrals = $110
Once an advocate refers five friends, their reward equates to $240 per year, or one free year of service. This tiered structure is highly on-brand and incentivizes repeat referral behavior. It also doesn’t hurt that Ryan Reynolds is a co-owner.
6. E-Commerce Continues to Escalate
E-commerce sales are expected to continue rising in 2023, accounting for 18 percent of retail sales with about 27 percent of the global population shopping online. What does this mean for brands? A strong digital presence is more important than ever. For referral programs, this means beefing up the promotion across all channels, including social media, apps, email newsletters, and SMS. The more attention you can grab, the more traffic you can drive to your e-commerce site to boost sales.
Imperfect Foods has capitalized on the recent consumer trend of purchasing groceries online, and its referral program has been a huge driver of new customer acquisition. The company makes it easy for existing customers to refer friends by incorporating the referral program where its customers are interacting with their brand the most: the customer account page, where orders are customized each week. Imperfect Foods is also growing quickly and adding new delivery locations. For each new location, Imperfect Foods will provide a sweeter offer for referrals for a limited period of time in a specific new delivery area. This is a great way to accelerate new customer acquisition at a low CPA.
7. Consumers Have High Expectations for Digital Technology
The global pandemic changed the way consumers approach digital technology, with 63 percent indicating that they will use digital technologies more now than before the outbreak. For referral marketing, this means that any program you implement must integrate with your tech stack to create a seamless experience on the front end and an easy-to-manage system on the back end. Consumers want to use as few clicks as possible to refer friends and make purchases. You can facilitate this by pre-populating email addresses, writing compelling example text, and having a single-click copy option for links and coupon codes.
Friendbuy’s integrations with leading email, SMS, and customer review platforms have made it easy for brands to seamlessly incorporate referral programs as part of their customer experience. Specifically, Friendbuy’s integrations with Klaviyo and Okendo allow brands like PYM to prompt a referral as soon as a customer provides a positive review. PYM customers absolutely love its product, and the company believes that prompting a referral after a positive review is one of the best ways to incorporate referral as part of its customer engagement strategy.
Stay on the Leading Edge with Friendbuy
One of the reasons these brands are able to stay on the leading edge of referral marketing is that they have the right tools at their fingertips and follow best practices. When staying on top of the latest trends, it is important to start with a strong foundation. Learn more about the basics of setting up your referral program in Referral Marketing: The Essential Guide.