Looking for an innovative BFCM marketing strategy? Try optimizing your referral and loyalty programs to boost your revenue this holiday season.
Rather than get lost in the wave of online sales, incentivize loyal customers to make repeat purchases through your loyalty program, and have them share your brand with their friends and family through your referral program.
Loyalty marketing, referral programs, and word-of-mouth marketing are some of the top marketing strategies to boost revenue all year long. But they're especially effective during the BFCM season when holiday shoppers are spending the most.
In a recent podcast for Wavebreak, Friendbuy's VP of Partnerships, Samantha Samuels, gave five tips for boosting holiday sales with referral and loyalty marketing. Read the transcription below for all the tips you need to create your most innovative BFCM marketing strategy yet.
- Tip #1: Identify Your Best Customers
- Tip #2: Display Your Calls to Action
- Tip #3: Boost Your Referral Reward During BFCM
- Tip #4: A/B Test Everything
- Tip #5: Get Creative With Your Loyalty Program
Today, we'll be sharing five tips for getting more out of every customer this quarter with referral and loyalty programs.
Before we dive in, let's start with some context about Friendbuy. We work with D2C (direct to consumer) brands like Casper, AWAY, Spanx, and Dollar Shave Club, as well as Fortune 100 ranked companies like Walmart, Disney, and Nestle. Our programs help these brands achieve two times higher conversion rates, three to four times higher lifetime values (LTV), and lower CPAs than any other marketing channels.
It's an exceptionally challenging time to try and accelerate acquisition as a brand. Right now, paid ads can be expensive and unpredictable, as people start cutting back on spending. It's a hard sell to convince a customer to convert with a brand they may not have tried before.
That's where word-of-mouth and loyalty can be really powerful. Having your already loyal customers recommend your brand to their friends and family is a sustainable and cost efficient way to grow. Now, let's get into the five tips to help you do just that for Q4 and beyond.
Tip #1: Identify Your Best Customers
Our first tip is to identify your best customers now and treat them like royalty.
You should always treat them like royalty, but even more so in Q4. There are a few ways you can find your best customers.
- First, check who your best Advocates are by seeing which customers have referred the most. It's usually your best customers that are loyal and are your Advocates. And it's usually the case that you acquire your best customers through word-of-mouth referral programs. You can use your referral program dashboard to segment the customers who have referred the most friends, giving you a list of contacts that are invested in your brand.
- Next, you can use your reviews or NPS survey platform like Okendo or Delighted to find your happy customers. You can segment the audience that has recently left you a four or five star review, or scores of nine or 10 in an NPS survey. If you're not already, then you should automate asking these customers to refer a friend year-round. Friendbuy has integrations with Delighted and Okendo to help you remind customers to refer friends whenever they leave positive feedback.
- And thirdly, another great way to find your best customers is through your loyalty program. Find customers that have earned or redeemed points in the last month or segment out your top tiers such as VIPs. Once you have the list of best customers, put together a Q4 offer strategy specific to them. If you're comfortable giving new customers 15% off their purchase for Black Friday or Cyber Monday, then offer your best customers 20% off. This gives you the opportunity to brand the offer as though it is specially curated just for them. Also, set up email and SMS campaigns to let them know about their special offer and make your favorite customers feel seen.
You can also curate these offers to meet your customers where they are in the buying journey. For example, ILIA Beauty curates their content based on specific products that their audience has purchased. They know that if someone purchases skin tint early on, they'll have a higher lifetime value than other customers.
So they specifically target those customers to receive messages about their complexion to help them build out their product regimen early on, and then increase average order value (AOV) and LTV.
You can do something similar during Q4 by seeing if you have a popular product with a high repeat purchase rate, and offering bundles or discounts around that product to your best customer segment.
Tip #2: Display Your Calls to Action
Our second tip is to pick prime locations for your referral calls to action. During Q4, you might have special offers and banners all over your homepage, making it harder than usual to draw attention to your referral program.
And in some loyalty programs, referral CTAs actually get buried. But every customer you acquire through referral is one less you have to acquire through a paid channel, which can be particularly expensive in Q4.
To start, pick a hard to miss location throughout the customer journey to promote your referral program.
For example, Friendbuy recommends placing CTAs in your main navigation bar in the mobile web hamburger menu.
Or if you have a native mobile app, add a referral CTA to that main menu.
If you go to spanx.com and you'll see a Get $20 CTA on the left hand side. Once clicked, that opens up a referral widget so you can start sharing.
Also, consider providing an opportunity to refer post-purchase, specifically on the order confirmation page.
You'll also want to include a banner or link to refer in your post-purchase transactional emails, newsletters, and new product announcements.
By prioritizing prime locations for your referral program, you'll be setting yourself up for success for customers to refer on impulse, and then subsequently new purchases and new customers.
Now, what does referring on impulse mean? Let's say two friends are talking at a bar and your brand comes up in conversation and one of them says, "Here, let me send you my referral link."
That's a referral happening on impulse, and you need three things to encourage impulse referrals.
- First, strong awareness of your program. In order for your customers to share on impulse, they'll need to know that you actually have a referral program.
- Secondly, the next ingredient is accessibility. It has to be really easy to get to.
- And then finally, it has to be super simple to use.
When working together, these ingredients make a referral program successful. Driving awareness of your referral program is really important, so you'll also want to ensure that it's integrated with your tech stack, such as your emails, reviews, NPS, and SMS platforms.
NOTE: See Friendbuy's technology partners to see which integrations you can get started with.
Another way to pick prime locations for your referral CTAs is to make them more prominent on highly shareable products.
For example, Dropps, an eco-friendly cleaning supplies brand, added a refer-a-friend prompt on their product pages for sensitive skin and baby detergent. They noticed that a lot of people that are looking for products like that are more likely to trust people that have actually used it.
Tip #3: Boost Your Referral Reward During BFCM
The third tip for getting more out of every customer this Q4 is to boost your referral reward during Black Friday and Cyber Monday.
What do most brands typically focus on during the holiday season? Acquiring new customers and generating new sales with existing ones through aggressive promotions.
The influx of sales in November and December is great, but what if you could simultaneously invest in long term customer retention while you're experiencing the spike of holiday revenue? For sustained growth, there's nothing more important than customer retention, and that's how referral programs can help.
With a referral program, you can incentivize existing customers to refer their friends and family. For example, if you typically offer your customers $20 for referring a friend between Black Friday and Cyber Monday, boost that to $50.
Not only will you see an influx of new customers, you can also capitalize on the influx of new referred customers by increasing their LTV with a loyalty program.
Tip #4: A/B Test Everything
The fourth tip is to A/B test everything. With Friendbuy, you can concurrently A/B test your referral program to see which offers and copy resonate best with your customers.
One thing to consider when A/B testing is the rule of a hundred. If your product's original price is under a hundred dollars, then a percentage based discount, such as 30% off, will appear more attractive to customers. Likewise, if your product's original price is above a hundred dollars, then a numerical discount, such as $50 off, will impress customers more.
A jewelry company called Get Back Necklaces tested this and it made a difference of 700%. They originally offered their customers Give $10, Get $10, but they wanted to A/B test that against Give 50%, Get 50%. As a result, their referrals spiked higher than ever before. Referral revenue of their percentage based offer doubled their dollar based offer, resulting in a 700% increase in referral revenue.
Another example is Casper, who recently tested their offer strategy to see if:
A) A higher Friend incentive of 25% off and a lower Advocate offer of $75 off worked better than
B) A lower Friend incentive of 20% and a higher Advocate offer of a hundred dollars.
Drum roll for the results please...
They found that A performed better, with the higher Friend incentive and lower Advocate reward. When they made that change, they saw a 26% lift in shares and a 16% lift in conversion rate.
That's an important reminder to not rely on what you think is the best offer for your customers. Let the data guide your strategy.
In terms of timing, testing your referral offer strategy and creative now is a great way to get prepared for the holiday season ahead to make sure your best converting creative is live during peak times.
Keep in mind that you want to encourage repeat referral behavior. Some of your customers will refer a lot, so provide an incentive that encourages these high performing Advocates to keep referring.
For example, consider offering an account credit towards a featured purchase or maybe a third party gift card if your product category calls for that. As a counter example, a free t-shirt with your brand logo might sound nice, but how many of those does someone need and will they keep referring after they get one? Probably not.
Tip #5: Get Creative With Your Loyalty Program
The fifth and last tip to get more out of every customer for Q4 is get creative with your loyalty program, specifically around the earning events and rewards that customers can earn by taking actions that are most valuable to your business.
Yes, you can offer customers the usual points or credit towards their next purchase, but Q4 is a great time to creatively think about how to motivate your customers.
With a tool like Friendbuy, you can pick earning events that are unique to your business. So whether a customer purchases, refers a friend, downloads your mobile app or subscribes to SMS or email marketing, you can reward them.
For rewards, think about offering them
- gift cards,
- maybe early access to product drops,
- or maybe even an invite to an exclusive event.