Referral marketing
Read time: 5 minutes
Have you noticed the whispers on social media?
People are getting bored of celebrity-endorsed beauty brands. High-profile bankruptcies like Forma Brands and Hello Bello underline a shift in the beauty industry.
Sure, there are exceptions like Selena Gomez's Rare Beauty, which crossed $400 million in net sales and is exploring a sale or IPO, and Hailey Bieber's Rhode, reportedly hitting eight figures in sales in its first year. But these successes are rare.
Most consumers are now prioritising authenticity and trust over star power, and celebrity-backed beauty brands are losing their shine.
Consider The Ordinary. They've turned their back on flashy celebrity endorsements and are embracing minimalist marketing.
The Ordinary, Uncommon Creative Studio. Ad copy: “Someone said working with celebrities would be good for our brand. But we couldn’t find one with a degree in Biochemistry.”
Their ad cleverly highlights their commitment to expertise and transparency—two things that really resonate with today’s consumers.
But beyond smart ad copy, how can marketers create sustained engagement with their brand in the absence of celebrity endorsements?
The power of word-of-mouth in today's beauty industry
When you rely on a single famous face, you’re outsourcing the core feelings and emotions you want your brand to evoke. This is a high-risk strategy.
Take Rosie Huntington-Whiteley's Rose Inc, for example. Despite the initial boost from her star power, the brand was sold for a mere $2.5 million and Rosie has since parted ways with it. Similarly, Naomi Watts's menopause-focused skincare line Stripes was sold for just $500,000.
Investors are rethinking their approach to celebrity-backed brands. There's a growing fatigue around celebrity and creator brands: A famous face is just the beginning, not a guaranteed path to success.
So, it's time for new referral marketing ideas. A far better strategy is to tap into the power of your customers’ social networks, harnessing the positive feelings that come with a personal, word-of-mouth referral. Instead of living and dying by the light of a celebrity flame that burns bright and then fades, you can use the renewable power of your already existing customer base to build your brand.
That way, you can build a referral program that not only attracts new beauty fanatics but is also building customer loyalty among your existing ones.
Key benefits of shifting to referral marketing
Referrals are like gold dust. Beauty products naturally spark conversations—whether it’s about that perfect, sun-kissed blush or that spot-on “lip combo”. Channelling this organic excitement through a structured referral program can convert it into a powerful growth channel.
Here’s what we’ve found through working on referral marketing strategies with top beauty brands at Mention Me:
- Referred customers are 11% more likely to purchase on their first order.
- They spend 11% more on that initial purchase.
- These advocates have a 2.3x higher value than other customers.
- They double their repeat purchase rate after making a referral.
- Their average order value (AOV) is 11% higher.
- They are 5x more likely to spread the word.
Launch your winning referral marketing strategy today
Ready to get started? Here’s how:
Build a strong case for referral:
The potential is enormous. Aim for a 25% boost in acquisition. Referred customers are already predisposed to like you because they come from trusted recommendations.
Encourage referrals at peak moments of delight:
Timing is crucial. Prompt referrals post-purchase or sign-up—right when your customers are happiest. Use dedicated emails, in-package inserts, or a visible dashboard in the “My Account” section to keep the referral option accessible.
Make sharing effortless:
Flexibility is key. Let customers refer friends through face-to-face mentions through NameShare®, unique URLs, emails, and social media. Remove all possible barriers to make sharing seamless.
Test and optimise incentives:
The right incentive can transform your program. From discounts to exclusive rewards, find what resonates best through systematic A/B testing. When conducting your tests, keep in mind that maintaining a consistent customer experience is vital.
Proven success stories: referral marketing in action
Benefit Cosmetics leveraged their loyal customer base through a referral program powered by Mention Me, resulting in a 24% increase in purchases among referred customers and a notable rise in share rates.
Similarly, supplements brand Symprove successfully converts 34% of brand recommendations into new customers, with 51% acquired through Mention Me’s unique Name Share® feature. Wild, on the other hand, achieved a 25% lower CPA by using Facebook lookalike audiences built on referral data.
Transitioning from celebrity endorsements to real word-of-mouth
While the era of celebrity-backed beauty brands may be waning, exceptions like Rare Beauty and Rhode prove it’s still possible—albeit challenging—to succeed.
If, like most beauty brand leaders, you don't have the luxury of an enthusiastic Selena Gomez hanging around the office coffee machine, there are alternative, impactful referral marketing ideas. For example, why rely on one celebrity influencer whose popularity may fade over time when you could have an army of loyal micro-influencers instead?
The real opportunity lies in authentic, trust-driven, influencer marketing through referrals. With Mention Me, we help you identify who these micro-influencers might already be and assist in growing their numbers, which can have an exponential impact on your growth.
Referral marketing isn't just another tactic; it's essential for beauty brands that want to thrive in today's market. Ready to embrace the future of marketing for the beauty industry? Start today and watch your brand soar through the genuine power of word-of-mouth.
For more insights and to get started on your referral program, reach out to Mention Me. We’ll help you turn your loyal customers into your greatest advocates.
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