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How to earn trust through referral marketing

By: Andy Cockburn

With trust comes loyalty, and with loyalty comes long term customers who are more likely to want to share your brand.

In an increasingly crowded marketplace, with established online retail brands sharing the stage with a plethora of smaller challenger brands, the need to find ways to attract and retain customers is ever present.

This article explains how to use referral marketing to inspire trust from online shoppers.

The digital economy has permanently changed the dynamics of communication between brands and customers. Old school blanket advertising techniques no longer cut it. In today’s hyper-connected, social media dominated landscape, shoppers crave authentic, trustworthy experiences.

Friends with smartphones

Brands are increasingly having to overhaul and re-educate themselves in order to keep up with the pace of this rapid pivot in customer behaviour and preferences. This is perhaps an easier task for new brands building a fresh customer base. Customers not only expect authentic peer-to-peer led introductions to products now, they also expect to be engaged across multiple online and offline channels, seamlessly, as standard.

For brands, needing to tap into the networks of the savvy shopper, the challenge is two-fold. First of all, companies long used to one-way broadcast models of paid advertising, are finding themselves traversing untrod territory when it comes to things such as customer referral campaigns.

Add to this, the rapidly expanding omnichannel landscape in which we’re operating. We now need to deftly navigate an ever more complex ecosystem of customer touch points in order to achieve truly seamless product recommendation experiences that our customers crave.

This is important if we consider that customer referrals, delivered across a range of online and offline touch points, tailored to the habits and preferences of one particular audience, should be the holy grail of the trust marketing world. 

If done right, a referral programme can create a virtuous chain-reaction of quality interactions between people who like, trust and listen to each other. So what steps should online retail brands be thinking about when considering setting up referral? And what factors are likely to make the programme a success?

Late last year we conducted customer research with 2,000 respondents into what motivates UK shoppers to recommend brands to friends and family, and which qualities make a brand referrable. Using the research as a guide, here are some suggestions for what to think about:

Why we refer, and what makes a brand referrable

Sharing secret

Referring a brand that you’ve had good experience with for most people should come naturally and easily. We want our friends and family to be able to experience this too, and additionally we feel a sense of pride in sharing a brand that we know they’ll like. Still, even with this premise, what are the main drivers and reasons for sharing?

According to the research, loyalty and trust rate highly for people when choosing to refer. The research revealed that UK shoppers value the opinion of a friend or family member most with 41% of those questioned put off referring a brand if they’d been told not to shop there.

Trust also rated highly for qualities that the brand itself needed to possess for somebody to choose to refer, with the research revealing that 76% of those questioned value a brand being trustworthy or credible in order to refer them. Those surveyed also stated that the quality of the product was a key driver for referral (73%) followed by experiencing good customer service from the brand (59%).

The right referral offer is clearly important too. The research disproved the old adage that “it is better to give than receive”. Respondents preferred a referral offer with a reward for themselves (59%), compared to one which led with a reward for their friends (just 16%).

So, as much as it is useful to consider and plan for what motivates people to refer a brand, thinking about what might put people off or stop people referring a brand to others is also really important.

What stops people referring

When done well, a successful referral marketing programme is the most powerful form of marketing there is. Referring a product or service to a friend is, before anything else, an act of trust, reciprocity and social belonging. So with this in mind, once a referral programme is offered, what could put people off using it?

The research suggests that we need to know someone personally in order to fully trust a recommendation, with only 21% saying that the would trust an online review. This compares to 50% trusting a friend and 46% a partner or spouse.

The research also highlighted increasing disillusionment with influencer marketing and social media with only 5% of those questioned saying that they would trust a blogger youtube influencer to refer a product, and only 3% a celebrity recommendation.

Not surprisingly the research also revealed that 72% of those questioned wouldn’t recommend a poor quality product, 65% if they experienced bad customer service and 57% if the return process was difficult.

Timing

Calendar

Once we’ve understood and optimised the basic elements of referral campaigns, success hinges upon where, when, and how we choose to promote and implement the offer. This is when we identify a customers greatest point of delight, and also timings - in their routine interactions with the brand.

Strategically including referrals at these touchpoints is most likely to lead to conversion. Some timely examples of this would be referral offers made for Valentines, with reminders about Mothers day. Another timed with Black Friday, reminding people to use their referral discount for Christmas shopping.

Marketing as a whole has fundamentally and rapidly changed. Trust and authenticity are key and customer referral programmes have emerged as key players in this new world. Even more so now with a backlash against less credible celebrity backed campaigns.

Brands and online retailers need to realign resources and invest the necessary time to understand how referral fits into their existing business model, and how, where and when to place the referral offer along a cross-channel customer journey that goes where their customer goes.

 

By: Andy Cockburn, CEO, MentionMe

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