This document discusses referral marketing strategies for beauty brands. Some key points: - Referral marketing through word-of-mouth is an effective way to acquire new customers, but many brands do not systematically drive this channel. - Referrals work particularly well for health and beauty businesses if the right approach is taken, including developing a strong case for referrals and enabling easy sharing options for customers. - Referred customers tend to have higher lifetime value and spend more than other types of acquired customers, making referral marketing highly beneficial.

1. Mention-Me.com
The Referral Marketing Series
Referralsuccess
in the Beauty Sector

2. Introduction
Why referral marketing?
Everyone knows word of mouth is an effective
channel for acquiring new customers, but few
businesses systematically drive the channel
through a dedicated referral programme.
Often, it sits as a request from the marketing
team on the development pipeline year after year.
Or perhaps worse, a referral programme is built,
fails to deliver and is then neglected and marked
down as a failed endeavour.
In these situations it’s easy to assume that
referral will never work. Our expertise at Mention
Me means that we know that health and beauty
businesses can be particularly successful at
driving referrals.
Success depends on approaching the challenge
in the right way and investing in discovering the
keys to unlock the channel.
• Develop a strong case for referral
• Encourage referral at points of
customer delight
• Enable customers to tell their friends
• Find the right incentives
• Plan for long term success
• Discover how other health and
beauty brands have developed their
referral programmes
Learn how to make the referral channel work
for your business. This guide will help you:
Referral Success in the Beauty Sector
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3. Introduction
Peer groups generate authority
and shape purchasing behaviour
.
But what about people with the biggest
influence on purchase behaviour? Friends.
Whist many companies concern themselves
with identifying key influencers and the
problem of fake profiles and lack of
authenticity, the most influential group of
people of all have been staring them in the face.
Harnessing the social connections of your
existing happy customer base is the most
authentic and relevant form of marketing. After
all, if a friend tells you about a great new
product you will trust that recommendation
over advertising via another source.
More and more beauty brands are waking up to
the power of referral as a highly converting
marketing channel.
Ultimately, selling any kind of product is all about
building up trust; and never more so than with a
product that customers apply to their skin. Whist
a brand can position themselves as an authority
to build trust, the opinions of their users can
make or break that trust.
Beauty products lend themselves to
conversations by consumers about which
products to try and how to apply them. Social
media has increased the influence these
conversations have on brand preference. A study
by Deloitte suggests 47% of millennials are
influenced in their purchases by social media.
Brands have been quick to jump on the
”influencer” bandwagon. According to
Econsultancy, 60% of beauty brands have an
influencer strategy in place.
Referral for beauty brands is more than skin deep
The percentage of
millennials are influenced
in their purchases by
social media
47%
DELOITTE
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4. The hidden benefits of referral
The number one benefit of referral is the number of
new customers that it delivers to your business.
However, what is often overlooked is the quality of
the customers that are delivered.
Part 1:
Develop a strong case for referral
The potential of referral
At Mention Me we believe that most businesses
should be targeting an increase in acquisition of
10% to 30%.
For businesses that already have an established
model and marketing mix, referral is likely to
represent one of the best ways of materially
increasing acquisition.
Since the new customers are the friends of your
existing customers, they are a great match for
your target market. Unlike some channels where
you bring in discount hunters who are not in your
target demographic and likely to only buy once,
referred customers are usually right in your target
demographic and tend to become great,
longstanding customers.
They’re also predisposed to liking you as a brand
before they’ve even bought anything because their
friends have been enthusing about you to them.
Our experience shows that referred customers:
• Spend 25% more
• Have a LTV 2x that of customers acquired via
other channels
• Are 3x more likely to refer someone else
Referral Success in the Beauty Sector
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The increase in customer
acquisition that most
health & beauty brands
can expect from referral
marketing
10-30%

5. Underlying customer satisfaction
A high Net Promoter Score is a great
indicator that referral has the
potential to work well.
Demographic
As a rule of thumb, women share
more than men & under 30s share
more than 30+. However, whilst older
ages share less, the shares they
make tend to convert better.
Impulse or considered purchase
It will take longer to get a referral
progamme off the ground for high
consideration products, as referred
friends may not yet be ready to buy.
Part 1:
Develop a strong case for referral
Talkability of the category
Fashion is common topic of
conversation so is a highly referable
sector
Proportion of existing customers
Existing customers are more likely to
share than those coming to the
checkout for the first time.
Discounting environment
If a brand regularly discounts heavily it
makes it hard for a referral offer to
stand out. Referrers will not share if
they know their friends will get better
value elsewhere. In these cases,
exclusive events or competitions
might work better as a referral reward
than discounting.
Brand factors which influence referral success:
Referral Success in the Beauty Sector
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6. We typically recommend starting on the post-
purchase or post-sign up page.
This page is usually close to a point of delight. In
online retail the greatest delight is when people
have physically received their order. However
you’re not in an online conversation with them at
that point; so back up to the last time you were,
when they were happy enough to buy.
Putting an offer in front of customers here should
result in between 10% and 30% of customers who
see an offer sharing it with their friends.
You should also include a reference promotion
point for launch so that customers can find the
referral programme if they’re looking for it. The “my
account” section typically lends itself to this and
including a dashboard giving the status of any
referrals that have been made works well.
It can also be good to include the referral
programme as a standard feature in email
newsletters. Like almost all things in marketing,
reminding customers about something means
better conversion.
Inserts can also work very well. In an online retail
example, including a physical card with the product
does get to people at exactly the point of greatest
delight.
The key here is to find a way to enable people to
share without needing to go to a website to share a
link. If you can give them cards that they can share
with their friends it is much more effective.
Mention Me’s ”name share” functionality also
enables customers to share just by mentioning
their name. No code to remember; the ultimate
frictionless process.
.
Part 2:
Encourage
referral atpoint
ofdelight
Referral Success in the Beauty Sector
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When promoting
referral you should:
• Get as close to the point
of delight as possible
• Aim to keep the
programme top of mind
• Enable customers to
easily find it
To achieve this, it’s great to
place promotion points in
different places on your site
and within email cycles.

7. .
This allows us to capture the face-to-face referrals
that are happening that might otherwise be lost,
reward the referrer and start a virtuous circle.
Unique sharing URL
Each customer gets their own unique sharing URL
that they can post wherever they like: in an email,
on social media on a blog.
Email
Allowing people both to send an email from the
share page with the option to look up their friends
email addresses and giving them an email they
can forward on to their friends later on.
Social
For example, via Facebook (directly or on their
timeline), via Twitter, via Whatsapp or Weibo (for
the Chinese market).
Part 3:
Makeiteasyforcustomerstoshare Optimise the programme
For most demographics, the most used
sharing methods are:
• face-to-face
• email
• sharing URL
However, some demographics favour
social sharing. 70% of successful referrals
for the “young mum” demographic come
from Facebook sharing.
The share rate is only half of the story. The
conversion rate from customer sharing to
their referred friend purchasing varies
significantly by share channel.
The more personal a sharing message
feels, the more likely it is to result in a
successful referral.
Experiment with all the channels - don’t be
afraid to get rid of share options that aren’t
working.
You should enable your customers to share
however they like. The options we find most
successful are:
Face-to-face
At Mention Me, we let customers share using their
name so that a referred friend can visit the site and
just enter the referrer’s name in order to receive
their introductory offer.
Referral Success in the Beauty Sector
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8. .
Part 4:
Findtherightincentives
Whilst incentives are not the sole driver of referral
programme success, they are important and can
make a big difference. We find that it is possible
to more than double the performance of a
programme by testing different offers.
Testing offers sounds like an obvious thing to do
but it’s more complicated than it first sounds and
you need to make sure that your programme has
the capability to do so.
You need to be able to conduct AB testing by
cohort so that you can offer consistency of
experience even if your offer changes. It enables
you to offer one cohort an offer and for them and
their friends to continue to benefit from it for the
next six months but for the next cohort to see a
different offer and for them and their friends to
be able to benefit from the new offer.
If you show an offer to a cohort of customers for
a month and then want to test a different offer, it
would be a very poor user experience to just
switch out the offer that referred friends of the
first cohort are expecting.
Examples of
incentives to consider:
• Discounts - % or $/£/€
• Gift cards
• 3rd party vouchers
• Free Delivery
• Loyalty points
• Cash or Rebate
• Free product
• Donations to charity
• VIP Access
• Competition Entry
Referral Success in the Beauty Sector
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9. Referred customers make
24% more purchases than
non-referred customers
Benefit
Benefit Cosmetics grew from a single make up
shop “The Face Place” in 1976 to a global
cosmetics brand. The growth has been fueled by
a love of the fun, tongue-in cheek approach to a
sector which can often take itself too seriously.
With such loyal customers, it made sense for
Benefit to harness this brand advocacy with a
referral programme. They appointed Mention Me
to power their scheme and worked with the team
to start rewarding customers in mid 2016.
Part 5:
Great referral examples
It is rare that any marketing activity delivers its
best results from day one. Referral marketing is
no different, and requires a systematic program
of testing of all elements to optimise and
increase conversions.
The Mention Me platform facilitates AB testing
by cohort, which allows the Benefit team to test
all aspects of their scheme. A programme of
testing offer, messaging and the customer
journey has led to significant increases in the
number of referrals.
Here are just some of the great results the team
at Benefit have achieved:
• The brand is very referrable. In peak weeks
30% of enrolled customers share the brand
with their friends.
• Customer journey is key: changes in the
referral flow has seen the rate at which
customers share the Benefit brand improve
by 16%
• Referred customers are valuable: They make
24% more purchases than non-referred
customers
“We’ve been really impressed by the AB
testing functionality available with the
Mention Me platform. It’s enabled us to test
a variety of gifts & samples as rewards to
find which ones resonate best with our
customers”
Sacha Patel
CRM Manager - Benefit
24%
Referral Success in the Beauty Sector
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10. 45%
Part 5:
Great referral examples
“We started working with Mention Me as we
could see an opportunity to reward our loyal
customers for something they were naturally
doing, referring us to their friends & family.
We have seen good growth since we started
and the channel continues to expand our
new customer base. The reporting & tracking
provided helps us to closely monitor the
performance.”
Cassandra Cash
Online Marketing Executive
Simply Supplements
Simply supplements was established over a
decade ago and has grown to become one of
the leading suppliers of premium healthcare
supplements.
With an ethos of providing quality products and
great value prices, Simply Supplements pride
themselves on delivering great customer
service.
Already boasting excellent customer reviews,
Simply Supplements wanted to harness this
advocacy with a customer referral programme.
The scheme has been live for 2 years, and in
that time has delivered over 1.5K new referred
customers. The team regularly run AB tests on
all aspects of the programme including offer,
share method and creative. This has resulted in
referral metrics continuing to improve over
time:
• The rate at which customers refer
friends has increased 3x since launch
• The average order value of a referred
customer is 13% higher than a
non-referred customer
• % discount outperformed £ discount
• 45% of referral orders are driven by Mention
Me’s unique Name Sharing capability
of referred customer
come via Mention Me’s
“Share by Name”
functionality
Referral Success in the Beauty Sector
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11. Other health & beauty brands we work with….
Referral Success in the Beauty Sector
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12. Mention Me exists to help businesses unlock referral as their leading
marketing channel. Our world class platform has unique features to
deliver referral success. Our team work alongside you to determine
how to maximise the potential of the channel for your business.
We start by modeling a business case to show
how well the channel will work for you and the
numbers you can expect to deliver from a refer-
a-friend program.
Our integration is light (based on JavaScript
tags) and places few demands on your
technology team. So your referral programme
can be up and running quickly.
You’ll have all of the tools you need, and the
expertise on hand, to allow you to optimise the
referral programme for your different customer
segments.
Find out more
Contact Mention Me for a demonstration of
how our referral program can help you.
hello@mention-me.com
+ 44 203 813 4460
AB Testing
Our tools offer AB testing & optimization as
standard, with unique sharing options
About Mention Me
We incorporate best practice and innovation
(such as the ability for customers to share by
name) so that you can have a world-class
referral program live from day one.
We also back ourselves to make it work for
each business we work with by charging on a
cost per acquisition basis, rather than charging
license fees.
If you would like to learn how you could join
the growing number of health & beauty brands
who have partnered with Mention Me –
Benefit, Elemis and Feel Unique – then get in
touch.
Referral Success in the Beauty Sector
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