Since time immemorial, people like to see the best version of themselves when they look in the mirror. Not much has changed in that wish. That explains the core reason behind the size of the cosmetics industry. With an estimated annual worldwide turnover of USD $170 billion, it’s a venerable industry. Given that word of mouth marketing is also one of the oldest and most proven selling techniques, referral marketing for cosmetics makes perfect sense.
Besides, if you go through this infographic, you will learn that Americans are the heaviest spenders when it comes to beauty products. What this highlights is the enormous potential of the cosmetics industry when it comes to enhancing customer acquisition.
Referral marketing for cosmetics also makes sense when you consider the intimate nature of beauty products. Customers are terrified of using a foundation that will make their skin break out, wasting money on an expensive hair treatment that does nothing for them, or buying a lip color online that looks lifeless in person. This extra sensitivity that consumers have for beauty is what makes them need recommendations and reviews. And when they see with their own eyes that their friends, relatives, neighbors have been using a particular brand or product with great results and no side effects, it becomes visual proof of the quality of the product. When those people recommend some beauty product, a fewer traces of doubts remains in shoppers’ minds.
But as I always say, every industry is different with its own positives and negatives. Every industry has a different way of functioning and thus every industry has a different quotient of appeal. As a marketer, you need to understand that appeal and try to weave all your communication around it. Hence, your referral program also needs to be augmented accordingly. The beauty industry is no exception. Because what has worked for one industry may not work for some other industry. We will look what referral marketing for cosmetics should do to leverage its unquestionable potential.
The importance of word of mouth carries more weight in the beauty and cosmetics industry. After all, these are the products which decide our look and come in direct contact with the body. Thus, a personal communication in the form of tips about which hair color might suit someone or what gel might be effective for oily skin can bolster the relationship beyond the temporary and cold business transaction. It’s like you are giving more than a mere product to your customers. And unless and until this bone of connection doesn’t get developed, it’s hard to convince consumers that they should recommend your products to their friends. It’s like a prerequisite to your referral program. First, create a ground and atmosphere for referrals and then give them the medium, i.e. a referral program, to do it! You can even add such tips in your communication of referral program as well. Consciously or subconsciously, this will act as a motive for people to share more about your products.
We have seen enough referral programs falling flat due to illogical ways of rewarding people. And a lot has to do with the old wisdom, which says that cash benefits act as biggest motivation for people to refer any brand. But with the changing times, this wisdom has faded. A study conducted by the University of Chicago found that non-cash incentives are 24% more effective at boosting performance than cash incentives.
Consumers are more liberal spenders when it comes to cosmetics, and besides, beauty products fall into a category of costly products anyway. Thus, if your product price is $50, a $5 off has no allurement in it. Instead, marketers can invest in creating experiences that linger on customer’s mind for a long time. You can still keep a points reward system. But you should make your best customers and advocates feel special by giving exclusive access to special products. Or you can invite them to the special events such as a launch of the product or the success party of your products. These are the events whose access have been traditionally given to journalists and eminent personalities from various fields.
Giving your customers, who have shared the most about your product, the opportunity to rub shoulders with such bigshots does a lot to their experience level. There are simpler ways too. What if you give the referring client a free service or a product after 3 referrals? Is it too extravagant? Absolutely not. Let’s do the math here. Assume that your product cost is $100. If you reward a client with a free product after 3 referrals, you will get $300 in additional sales – plus repeat business when the referral comes back. Rewarding your advocate generously will give a strong incentive to your customers to refer new customers. These new customers may also want to get a free product for referring 3 new customers…and thus, the snowball effect may get ready to roll.
And don’t forget to A/B test these incentives! This blog post will guide you through which variables to consider when testing and optimizing your program.
Of course, beauty is usually considered the domain of women, but men are also getting in this groove. There has been an increasing tendency of men to care more about skin and look. That’s why they are buying various cosmetic products. In America alone, men’s skin care products’ sales have increased from $2.2 billion to $3.2 billion in just a span of 6 years (2006 to 2012). Cover Girl also just named their first male spokesmodel!
So, if you have men’s products on your shelf, do not hesitate to carve out a referral program for them. They are becoming conscious about beauty and thus there are high chances that they will refer your products to their friends. Even if you don’t deal with men’s products, it’s a wise idea to have something for men too to have their participation in your referral programs. Consider something like a family scheme where he can get rewards for sharing with his sister or wife.
1- The beauty industry works on the intimate connection that customers share with the brand. Try to foster it to see a better performance of a referral program.
2- Innovative rewards are needed to really give some strong motive for customers to refer your brand to their friends. Think beyond cash incentives.
3- Don’t make the mistake of excluding men from the whole beauty business. They do care about such things. Involve them too in the environment of your referral program.
Note: For more tips on promoting your referral program, check out our white paper, “The Step-by-Step Guide to a Powerful Referral Program!”
On a more granular level, our latest case study shows that our Sharing and Referral and Social Login solutions grew a footwear client’s email list by 20% and boosted orders by 38% over a year! The seller, Vivobarefoot, saw a 10:1 ROI.
Additionally, refer a friend programs don’t have to be online-only! There are many ways give them a robust in-store element. We care about the safety of referral programs too. This blog will help you in avoiding possible referral program fraud.