The popular belief is that referral marketing is a sledgehammer, something you deploy to get masses of new customer acquistions in one big slam. But, here at Buyapowa, we know it can be much more surgical than that - less a sledgehammer and more of a scalpel; something you can deploy in very specific ways to achieve very specific goals.
In this article, we'll take you through two use cases where referral can be extremely surgical. And, to illustrate the point, we'll use one example brand, Boots: the kind of brand that might think it's too big for referral but, once it understands that referral needn't be a blunt tool, quickly sees the value.
So, imagine you're the Chief Marketing Officer at Boots. You've got busy stores on every high street up and down the UK, your omnichannel offering is going from strength to strength, just about everyone who's ever going to shop with you has already shopped with you. What are you going to say when someone asks why you don't have a refer-a-friend programme? Well, chances are, it'll be something like this: "I like the idea of referral, but it's just not for us. We're too big."
That's a mistake - a massive mistake - because it hinges upon a massive misunderstanding: that referral is only there for new customer acquisition.
Of course, referral does work wonders when it comes to acquisition, but that's not where referral begins and ends. In fact, if you're smart (and if you use the right platform), you can get incredibly surgical with referral and supercharge all manner of different customer behaviours.
For now, let's just focus on two: targeting and acquiring specific types of customer and promoting specific categories or products. And, to illustrate exactly how referral can work in these areas, let's keep pretending you're that Boots CMO.
1. TARGETING CUSTOMER TYPES
General acquisition might not be your top priority, but how are you doing among... say, millennials? Is Boots their go-to store, like it was for their parents? Or are they shopping at Superdrug instead? Are they buying their beauty products from pureplay specialists like Feelunique, or even disruptive newcomers to the category like ASOS?
Well, referral's the perfect way to get more of them - or any other demographic or behavioural segment - and that's because referral is the ultimate lookalike marketing channel. What do we mean by 'lookalike marketing'? Well, put simply, we all tend to have friends who broadly look like we do. They tend to be the same age and gender, they tend to live near where we do, they're into similar things. They have comparable budgets and spending habits. And, most likely, they're going to buy the same kind of things we buy.
Referral leverages the friendships your existing customers have with these lookalike potential customers, and it turns the passion they have for your brand into a marketing channel.
As a result, if you use a referral platform to incentivise very specific segments of your customer database to get their friends shopping, you can be sure that any newly acquired customers are highly likely to fall into that very same segment. That's exactly what Vodafone are doing with their new refer-a-friend campaign, where they're using the Buyapowa platform to get young students on their network to refer their friends, acquiring huge numbers of new students as a result.
And this is something that any brand or retailer can do to grow priority segments, whether they're defined by age, gender, spending habits or any other mission-critical factor.
2. PROMOTING SPECIFIC CATEGORIES OR PRODUCTS
Here's the second major way in which referral can be used surgically. And it's important - especially if, like Boots, you're such a big brand or retailer that acquiring brand new customers isn't your priority. No one's going to tell their friends to shop for the first time at Boots; everyone's shopped there already, so that narrative's bordering on the bizarre. But they would tell their friends about new products they've discovered, or categories of products they've enjoyed, maybe even under-performing categories which Boots struggle to market via more traditional channels.
Take travel insurance. Everyone buys health and beauty products at Boots. Some people might get their photos developed there, or perhaps they pop in for a sandwich once or twice a week. But how many customers have bought travel insurance from Boots? In fact, how many of them even know that Boots sell travel insurance? And how can that Boots CMO leverage the knowledge and advocacy of those that do know to get other customers buying travel insurance, too?
Referral. That's how.
Let's imagine a hypothetical customer, Jane. Jane knows that her sister Debbie's going to a yoga retreat in Thailand next month and, because she's purchased it herself in the past, Jane knows that Boots travel insurance is the perfect choice for anyone with a pre-existing medical condition (like her poor sister, Debbie). By inviting Jane - and all the other customers who've bought travel insurance in the past - to take place in a surgical referral programme, Boots can tap into their experience and evangelism and highlight the perfect products to the perfect friends at the perfect time.
It's exactly what Telefónica's UK mobile network, O2, are doing right now with their Samsung handset promotion. Here at Buyapowa, we've worked with O2 for several years, helping them acquire huge numbers of new customers in a general sense. But now they're getting more surgical, inviting existing customers not just to get their friends signing up, but also to get them purchasing specific Samsung handsets when they do. And, because O2 can control the margins on this limited range of products more closely, they even can offer specific rewards and incentives when customers and their friends achieve these very precise referrals.
Don't worry if the sledgehammer approach is what you're after: more new customers, no matter what they look like or what they purchase when they shop. Referral still remains the number one tool to achieve that. But, if you think you're too big for referral, this surgical approach is something you really ought to consider. Because big is good. But big can always be bigger.
Stay tuned for more Buyapowa Masterclasses: bite-sized explorations of how referral can be used in unlimited ways, with often surprising results.
In the meantime, if you're interested in using referral in the surgical way described above, just get in touch and we'll help you explore the possibilities.