Spanning Black Friday, Christmas and the Boxing Day sales, the golden quarter represents a valuable time for you to drive sales and acquire new customers.

Despite the tough economic climate, last quarter saw record retail sales growth. Changing consumer behaviour and tier restrictions mean ecommerce sales are set to explode over the coming month. Especially for brands with a referral marketing programme. 

The valuable potential of referral marketing in peak season

In normal circumstances, referral programmes perform well during the final quarter of the calendar year. In the current circumstances, they’re set to perform at record levels.

In lockdown earlier this year, online orders and referrals soared across sectors including food and drink, gifts and occasions, and fashion. Despite non-essential shops reopening, they’ve remained high. And they're likely to be even higher as people begin Christmas shopping online.

Let’s take a look at the numbers.

With the exception of travel (for obvious reasons), every sector is generating more revenue via referral now compared to this time last year. Combine this evolving landscape with seasonality – and the increase in referral revenue around this time every year – and the coming months offer value potential for brands with refer-a-friend schemes.

That’s not all. Customers acquired via referral are significantly more likely to return than other festive shoppers. 

On average, referred customers spend 25% on their first order, have double the lifetime value and are three times more likely to refer your brand to their friends. 

Here’s how you can make the most of it.

How to optimise your referral performance during the festive period

OFFER IRRESISTIBLE INCENTIVES

Make your referral scheme stand out by offering something better than anything else on-site. If your welcome offer gives new customers 10% off, for example, give referrers and their friends 15% off (we find double discounts perform particularly well). If you’re nervous about tight profit margins, add a minimum spend into your discount to keep average order value (AOV) high while driving referrals.

Having said that, incentives don't always have to be discounts. The most powerful incentives are those that feel exclusive and hard to come by. Make your referral scheme feel special and festive with offers such as complimentary gifts, free gift-wrapping or a competition to win an advent calendar or other seasonal goodies. For even better results, target your customer segments with different offers based on what’s most likely to engage them. 

Support your irresistible incentive with social proof. Our integration with Trustpilot means mutual clients can show their dynamic Trustpilot score badge on the referee registration page. By showing how highly other customers rate your business, you can give potential shoppers that extra nudge to place their first order. You can feed into this post-purchase by prompting customers to leave a review.

MAKE IT EASY TO SHARE

As with most things, simplicity is the key to success when it comes to referrals. Even your most devoted customer won’t share your brand if it’s difficult to do so. 

Give your customers sharing options they’re likely to use. A millennial audience, for example, is more likely to refer your brand over WhatsApp or by copying and pasting a link. An older audience, on the other hand, is more likely to share via email or Facebook.

One sharing method we’ve found to be consistently effective across demographics is name-sharing. This feature lets referred customers enter their friend’s name at checkout for an exclusive reward. So the next time your customer is on a Zoom call talking about their comfy new sweatshirt, they can tell friends to enter their name at checkout for a special offer on one of their own.

FEATURE FESTIVE COPY AND DESIGN

The most successful referral programmes look on-brand at every stage of the customer journey. This is important to remember when it comes to seasonal promotions. You should update your referral campaign to reflect seasonality just as you would your homepage.

Implement copy and design that taps into the festive spirit while reiterating your brand USPs. A vegan brand, for instance, could promote sharing the gift of looking after the planet. A furniture retailer could encourage customers to help friends enjoy their comfiest Christmas yet. A wine merchant could talk about sharing favourite festive tipples.

Brand example: Figleaves makes a festive play on words

PROMOTE IT

As we mentioned in our Black Friday blog, making your campaign visible and enticing throughout the customer journey is key to driving referrals. Especially during peak periods, when consumers encounter even more brand advertising.

Feature your refer-a-friend campaign on your homepage, promote it in an overlay on the order confirmation page, shout about it on social. Display it at the touchpoints you know your customers engage with (what we call the curve of delight), using language that resonates (for example, ‘give’ a reward rather than ‘get’ one, or vice versa).

If you have a Feefo page, you can also display a branded or customised referral banner here as another touchpoint after a customer leaves a four- or five-star review. By promoting referral to happy customers when they’re actively engaged with your brand, you’re significantly more likely to increase your share rate.

And think about how you promote your referral programme, too. An overlay on the post-purchase page makes sense; the customer has finished buying your product and is engaged. An overlay at checkout, however, risks disrupting the transaction and annoying your customer. We’d recommend using a corner-peel here instead. You can find out more about promotional methods in this blog.

If you’re launching your referral programme, start with a few touchpoints and build more over time as you learn what works best for your business.

Brand Example: Charlotte Tilbury encourages customers to refer friends for the chance to win an advent calendar

EXPERIMENT

Experimenting might sound daunting, but the simplest tests can yield the biggest results. Virgin Experience Days, for example, found customers were more likely to share its referral offer when shown a white (rather than red) background. Done strategically, A/B testing can optimise referral performance by as much as 80%. 

If you’re getting up and running with your referral programme, the high volume of traffic coming to your website during peak season makes it the perfect time to learn more about your customers. Establish a strategic A/B testing roadmap that equips you to run tests, one after the other, to continuously gather insights and optimise your programme.

If you’re already a referral pro, experiment with showing different referral offers to customer segments. You could learn, for example, that low-spenders prefer to ‘get’ for themselves rather than ‘give’ to friends. Or that second-order customers are most incentivised to refer friends by a free gift. Use your business objectives to plan an A/B testing strategy that develops your understanding of customers and how to drive the next best action. 

Looking for ideas? Check out our referral marketing guide to experimenting.

Brand example: Iceland uses festive imagery to promote referral 

TURN FESTIVE SHOPPERS INTO LOYAL CUSTOMERS 

Of course, the festive season is a prime time to drive sales and boost profits in the run-up to year-end. But it can also be an opportunity to drive longer term revenue that continues into the new year.

As we mentioned earlier, referred customers tend to have higher lifetime value than customers acquired via other marketing channels. This is because their friend’s recommendation means they’re predisposed to liking your brand. It means they’re more likely to spend more on their first order and be more forgiving of any hiccups (such as slower delivery times due to high demand). It also means they’re more likely to return. 

To make this likelihood even stronger, engage with your new customers. Shoppers acquired during the festive period likely have different needs and characteristics to your other customers. Tailor your messaging to reflect this. Ask for their feedback with tools like NPS, showcase what makes your brand special, and delight them with unexpected touches like handwritten notes. Exceed their expectations and motivate them to return. 

Personalisation is another great way to do this. We have two integrations that support this.

Our integration with Ometria means mutual clients can build personalised referral campaigns into their wider marketing strategy. With real-time data sync, personalised referral landing pages and targeted campaigns, you can significantly boost your referral conversion rate.

We’ll also soon be launching a new integration with omnichannel marketing platform Emarsys. Once live, this will equip you to enhance the customer experience, drive loyalty, and increase customer lifetime value.

Get it right, and you can turn customers acquired via referral during the festive period into loyal customers with high lifetime value.

Brand example: Harvey Nichols uses festive designs with high-end imagery to reiterate its brand positioning

So, there we have it: why and how referral marketing could be your biggest revenue driver this peak season. For more ideas for your referral programme, speak with your Client Success Manager.