Is it that time of year already? We’ve barely dug out our winter woollens and we’re already zooming towards the new year like Kevin McCallister sledging down the stairs in ‘Home Alone’. And the imminent arrival of 2020 means that it’s time, once again, to gaze into our crystal ball and pick out some referral and advocate marketing predictions for the year ahead.
We’re calling it our 2020 vision because it is perfect*.
1. New channels for referral
Here’s a fun bit of trivia to share when you’re cornered at a New Year’s party by some guy – let’s call him Marcus – who’s been blathering on about the expensive cappuccino machine he’s just bought and the property he’s flipping downtown. Okay, Marcus, get your head around this: ninety-nine percent of all online content lives on what’s known as the Deep Web. Not to be confused with its subset, the Dark Web (which is packed with horrors that would give even Freddy Krueger nightmares), the Deep Web just refers to everything you won’t find via Google, including medical records, banking services and, crucially, private messaging services.
And it’s that last one which changes everything. Where, once upon a time, people spent huge swathes of their waking hours interacting on public-facing sites like Facebook, today’s digital time-sink increasingly takes place within private channels such as WhatsApp and its super-secure, encrypted cousins, including Signal and Telegram.
Even good old SMS text messaging – which has basically remained the same throughout the past quarter-century – is set to receive a massive boost over the coming 12 months, as Google rolls out RCS features within Android’s default Messages app. RCS is like SMS on steroids – it’s not an app in and of itself, it’s a whole new messaging protocol, enabling rich features such as messaging over wifi / mobile data, read receipts, hi-res video sharing and oodles more.
So, what does all this mean for referral? Well, first, as people spend more and more of their time in environments which don’t support advertising, it’s going to become increasingly essential to identify, equip and incentivise advocates to evangelise about your brand within their own personal corners of the Deep Web. Secondly, it’s more important than ever that brand advocates are able to share via whichever communication channel they choose. That means we’re going to see an end to referral programmes where the sharing choices are crudely limited to email, Facebook and Twitter. Instead, we’re going to see more and more programmes which support native sharing via any device, any app and any channel imaginable: public or deep.
Finally, as people spend more and more time ‘Deep Webbing’ (© Buyapowa 2020), we’re going to see an increasing number of super-lean referral programmes which are so pared back they can be experienced entirely within private messaging environments. Prospective referrers will be able to get involved simply by texting a shortcode. They’ll be able to spread the word with fams, fans, friends and followers without ever leaving that environment. Those people, in turn, will be able to transact via text or DM. And, completing the journey, any rewards and incentives due will be delivered straight to the participants’ messaging inbox of choice.
2. Sharing via Instagram
While we’re talking about sharing and channels, here’s another big one: Instagram. The big ‘I’. The ‘In-ster’, if you will. Instagram has been the advocates’ channel of choice for a number of years now, but there’s still one supersized problem when it comes to engaging Insta users and their followers in a referral programme: Instagrammers can’t share links.
Well, actually… no. Let me clarify that. Super-popular Instagrammers can share links, using the Swipe Up feature which magically becomes available once you hit 10,000 followers. But your normal, everyday Insta-Joe? Nope, ‘fraid not. Which is a problem for any referral programme that requires friends to visit a unique link before transacting, but it’s far less of a problem if the programme uses codes instead of complex links.
Let me show you what I mean.
In each of these examples, the URL a friend needs to visit is visually embedded into an image which can be shared by any advocate on Instagram – regardless of how many followers they have. But, since these URLs aren’t clickable, they need to be super-memorable if they’re going to work. The first example shows the limitations of using complex URLs: very few people are going to be able to remember an address like that; even fewer are going to try. But the smart, short URL featured in the second example, coupled with a highly-memorable code that can be entered once a friend clicks through? It’s significantly more user-friendly.
That’s why, as 2020 rolls in, you can expect to find fewer and fewer old-style sharing URLs used in refer-a-friend programmes, and many more simple URLs with memorable codes. And, as a consequence, you can expect to see a lot more referral activity on Instagram.
3. Pulling the trigger
Pop quiz: which kind of marketing emails generate 5x the number of transactions as other marketing emails? No, it’s not the ones announcing new product lines or promotions. It’s not the ones inviting customers to join a loyalty club or to apply for store credit. It’s the ones which brands send customers on or around their birthdays. That’s because customers are significantly more likely to engage with something that centres around them, instead of around the brand that’s reaching out.
The same phenomenon exists within the world of advocate and referral marketing, and this is where triggers come in. Thanks to the deeper integration now offered by advanced refer-a-friend platforms, it’s now possible to pick the very best moments to engage potential advocates, and to offer them something special when they get their friends on board. Double rewards if you refer within your birthday week? A bonus prize if you refer on the anniversary of your becoming a customer? These are the kind of highly-engaging scenarios which can inject some personalised sparkle into otherwise generic programmes, driving outstanding results. Expect to see much more of them in 2020.
4. The bright side of NPS
For the past 15-or-so years, brands have been fine-tuning their customer experience in line with NPS surveys: quick questionnaires which ask customers how likely, on a scale of zero to ten, they would be to refer the brand to their friends, family and colleagues. And that’s great – brands should take customer feedback seriously and act whenever improvements are viable.
But here’s the bizarre bit: the vast majority of brands who run NPS surveys only react to negative feedback from Detratctors (customers who rate their likelihood to refer between zero and six), and do nothing at all with their Promoters (customers who rate their likelihood to refer as a nine or a ten). That’s crazy, and it’s why we hear this message over and over again:
The good news is that this trend is, all of a sudden, beginning to swing in an opposite, more sensible direction. Instead of regarding positive NPS scores as nice but ultimately of no value, brands are quickly beginning to give Promoters exactly what they’re asking for: the chance to refer their friends, family and colleagues. In so doing, they’re converting all that previously wasted advocacy into valuable new customer acquisitions. Expect to see a lot more of this over the coming months.
5. The death of loyalty
Fancy one more? It’s quite a painful one, so strap yourself in, but brand loyalty has pretty much gone the way of the dodo. Ninety percent of the world’s leading CPG brands are losing market share to disruptive newbies, while 80% of customers say they’d happily switch to new grocery brands at the drop of a hat. And, in the sectors where retaining customers for a number of years is absolutely vital to the bottom line (telecoms, financial services, etc), innovations such as eSIMs, text-to-switch and super-short-term contracts are making retention harder and harder by the day.
So, bad news all round – and there’s no sign of things improving as we tumble into 2020. But there is a bright side: for every brand who loses a disloyal customer, there’s another brand who’s acquired one – and it’s here that brands really need to be focusing their energy. Now, as a referral marketing platform, it’s pretty easy to guess where we’d insert ourselves into that conversation and, yes, referral is a brilliant way to acquire new customers, even to poach them from your competition. But it’s also a powerful way of instilling loyalty among existing customers. Here’s why…
Imagine you and I are having a drink, and you tell me you’re thinking of getting a new car. I’ve got a BMW, so I explain how great it is, and my enthusiasm influences you so much that you go and buy one, too. That’s referral in action – brilliant. But now imagine bumping into me in a car park a few days later, and there I am: stepping out of a brand new Audi. You’d be absolutely furious – and rightly so.
But here’s the thing: people don’t do that. Once they refer a friend, they’re significantly likely to stay with the brand themselves. In fact, in the six months after referring a friend, existing customers spend on average 37% more, they transact 32% more often and, if they’re on a contract they’re 26% less likely to churn.
So, there you have it. Five predictions for the year ahead – a year which promises to herald a lot of changes and a lot of innovation. If you’ve got any thoughts about what’s coming down the pike, drop us a comment below. And, if you want to know how you can get up and running with your own refer-a-friend programme in the new year, just get in touch. We’d be delighted to help get your 2020 off to the perfect start.