Contribution by Simon Dring, Mention Me. Originally featured here.
Did you know AB testing can increase your referral programme’s performance by 80%?
There are countless elements you can experiment with: copy, design, touchpoints, incentives, sharing methods… the list goes on. In fact, there’s so many elements it can be hard to know where to start.
That’s why we’ve written this blog post: to show how brands across sectors are experimenting with refer-a-friend campaigns, and how you can do the same to improve referral performance for your business.
We’ve tested thousands of referral campaigns on behalf of 400+ brands to increase core marketing metrics like new customer acquisition, average order value and brand awareness. Sometimes, experiment results are as expected; other times, they’re surprising. But always, they’re valuable.
Read on for inspiration on AB testing your refer-a-friend programme.
1. Discount Type
A common starting point for refer-a-friend AB tests is percentage versus fixed-value discount. This is the route PrettyLittleThing took when it first launched referral in 2019. It offered £10 off (with a £40 minimum spend) versus 20% off to discover which incentive got people talking and introducing their friends to the fast fashion brand.
The results were interesting: while the fixed-sum was shared more, it converted to fewer new customers. New customer acquisition was a priority for PLT, so it declared 20% off the winner.
“Experimenting with A/B tests has given us valuable insight into our customers and promoting referral has been a great way to reiterate our brand’s message. We can’t wait to see what referral helps us to achieve next!” – Abbie Hodgson, Assistant CRM Manager, PrettyLittleThing
2. Discount Level
The bigger the discount, the better the offer, right? Not according to No1 Lounges‘ customers.
The airport lounge provider experimented with a £10 versus £7.50 incentive for referrers and their friends. Much to its surprise, it discovered the lower discount recruited 29% more new customers and generated 42% more revenue.
Discounts aren’t the only way to get people talking. London-based plant company Patch experimented with tiered rewards versus a free plant as a referral incentive.
Half its customers were offered a discount based on how many friends they referred (15% for one friend and 25% off for two or more), while the other half were offered a free plant for both them and their friend. Within two weeks, the gift proved significantly more effective, increasing Patch’s referral share rate by 49%.
Incentives are an important element of a successful referral channel – but they’re not the only area worth experimenting with. Sometimes, seemingly minor tweaks can make a big difference.
4. Give VS Get
Are your customer generous or selfish? That’s what we ask our clients when they first begin experimenting with referral – and the results of their ‘give’ versus ‘get’ copy tests often reveal something different.
On launching a refer-a-friend channel, pet insurer Animal Friends ran this AB test for 10 weeks. It discovered its customers are more likely to share incentives that focus on rewarding friends; reiterating the importance of social capital (we talk about this in our guide to the psychology of referral). Generally, customers prefer to recommend brands that make them seem generous, rather than self-interested.
Our eyes are naturally drawn to an offer’s CTA, so it’s important the copy there is engaging enough for customers to click it.
Paula’s Choice experimented with ‘Share this offer’ versus ‘Give 7.50 off’ as its CTA copy. By emphasising why customers should refer the skincare brand, it increased the number of people sharing and converting friends into new customers.
6. Background colour
When you think of Virgin Experience Days, it’s likely the brand’s iconic red that springs to mind. That’s the colour the experience provider used as its referral overlay background before deciding to experiment with changing it to white.
Much to its surprise, a white background increased the likelihood of people sharing Virgin Experience Day’s referral offers and introducing their friends. It’s now used as standard across its refer-a-friend campaigns.
7. Number of share options
Boux Avenue originally offered five sharing options to referrers: name sharing, email, Facebook, WhatsApp and link sharing. It wanted to see if people engaged more with fewer options, so AB test removing Facebook for two weeks.
Interestingly, it found less isn’t always more. The control group with all five sharing options delivered a higher share rate and more overall revenue for the lingerie brand.
Winner: 5 sharing options
So there you have it: eight AB tests for optimising your referral programme.
As the our examples show, every brand is different. There’s only one way to find out what resonates with your customers: strategic AB testing. Run tests one after the other to uncover valuable insight into your customer cohorts, then apply these learnings across your entire marketing strategy for optimal results.
Before you start, though, define what you want to achieve from your experiments. Success is different for different brands: is your priority brand awareness (i.e. a high share rate) or new customer acquisition (conversion rate)? Our platform lets users set specific objectives for AB tests in their dashboard. Decide what matters to you, then test away with confidence.
For more information on the services offered by Mention Me, head to their website.