October’s guide to the most interesting things happening in the world of advocacy marketing

The problems with 5-star rating systems and how to fix them

Does your business rely on a 5-star rating system for feedback? New research suggests you might want to rethink this approach. The truth is that 5-star systems are good at weeding out very low-quality businesses or products, but they make it hard to separate the good from the great. Why? Well, the 5-star system has built-in selection biases. Without incentives to rate businesses or products, most customers who leave feedback have either had a very good experience or a very bad one. Also, some businesses inflate their ratings system, meaning that 4.8-star average score might not be as exceptional as you think. The solution? Show customers an average rating for products or suppliers in that sector. Or, adjust user ratings based on differences in their reviewing behaviour. Follow the few easy tips laid out here to make your rating system more meaningful.

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Happy employees might be the key to happy customers

Customer satisfaction is a goal for many companies, but how to actually go about achieving it is a bit more tricky. A new study, conducted using Glassdoor employee reviews from top companies, plus ratings from the American Customer Satisfaction Index, found a strong link between high ratings of employee wellbeing and customer satisfaction. This correlation was even stronger in industries with lots of contact between customers and employees (retail, food service, tourism, etc..). But that’s not all – the study also found that a one-star improvement in employers’ ratings on Glassdoor was likely to result in a 7.8% to 18.9% increase in long-term market valuation. Clearly, prioritising employee satisfaction can result in a pretty big payoff for all involved.

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Revlon’s cautionary tale proves adaptability is vital

Let’s compare two brands, starting with Revlon. For decades, it was a staple of the cosmetics industry, known for their classic lipsticks and supermodel brand ambassadors. But just as other heritage brands have struggled to adapt to the digital age, so has Revlon. The company is considering the sale of its business after another year of low sales and $3 billion of debt. What happened? Well, it looks like the brand’s troubles come down to a lack of adaptability and agility. Back in the ’80s, Revlon revolutionised cosmetic and influencer marketing by using supermodels like Iman and Cindy Crawford as high-profile brand ambassadors. Given this history, you’d think they would have moved smoothly into today’s era of influencer marketing, right? Wrong. It was only in 2017 that the brand finally adapted and started using social media influencers as brand ambassadors. Being late to the game means being late to innovation and optimisation. The takeaway? In an age of constant change, adaptability and customer feedback is key.

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What companies can learn from Estée Lauder’s use of influencers

Now, let’s look at Estée Lauder, whose CEO recently announced that 75% of their marketing budget is spent on influencers. While this might seem like a lot of money for paid posts, a break down of how Estée Lauder uses influencers is a lesson in influencer marketing across industries. The company (which owns 29 different cosmetics and skincare lines) uses different strategies, depending on the product or brand. For example, the Estée Lauder line partnered with a trusted cosmetics influencer known for engaging with followers and creating unscripted, authentic videos for their Advanced Night Repair serum (one of their most popular products). The reason? The goal wasn’t to sell more products (10 bottles are already sold every minute), but to hold on to existing customers and nurture their consumer base by delegating to a trusted influencer. Another example: for a new Smashbox eye palette, the EL-owned brand hired five beauty influencers to create ‘how to’ videos for customers. How can you apply these examples to your business? Remember that, when it comes to influencer marketing, a one-size-fits-all approach isn’t always best. Use diverse tactics for different products and set unique KPIs for each partnership accordingly.

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Fewer than 20% of marketers have complete integration of their marketing funnel

All companies hope to create a marketing funnel that runs smoothly and leads to a high ROI. However, few can claim to have a funnel that’s totally free from the friction that prevents leads from reaching that coveted conversion stage. A new survey examining friction at every stage of the funnel highlights the fact that fewer than 20% of marketers report having strong or complete integration at the top, middle and bottom of their funnels. So, what can you do? The survey revealed that one of the best performing tactics at each stage is referral marketing. Also, automating your funnel can result in double the campaign performance results, while integrating the funnel can result in triple the performance gains. The takeaway? In addition to analysing the tactics that work best for your customers, you might want to consider automating and integrating your company’s marketing funnel.

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