Using Current Buyers to Recruit New Buyers

Are you utilising your current buyer base?

Which is more effective at getting people to turn out to vote? Telling them that turnout is expected to be low or that turnout is expected to be high?

You would probably think telling people that turnout is going to be low would make them more likely to vote, right? An individual vote counts for a little more if the total number of votes is lower. However, the opposite is true. You are more likely to get someone to turnout to vote if you tell them turnout is going to be high.

Why? Social proof. We are more likely to do what we know other people are doing.

This is why, when US electricity companies started putting the average electricity usage of households in a neighbourhood on bills, households that had higher usage than average started using less, whilst those with lower usage than average started using more.

There is a lot of good marketing communication out there. But, no matter how good your marketing is, what you tell shoppers is likely to be less influential than what other shoppers tell them. And the closer those shoppers are to the person, the more influential they will be.

What other people do or say (hotel X has a great rating) is quite likely to influence my behaviour. What people like me do or say (hotel X has a great rating amongst young families) is very likely to influence my behaviour. What someone I know does or says (hotel X is recommended by a friend) is almost certainly going to influence my behaviour.

So, why is this important? Well, last week we talked about using existing products to sell new products. This week we want to talk about using existing buyers to recruit new buyers.

So, how can you do this?

Well, there are two routes – direct or Indirect. Let’s start with direct.

Getting a current buyer to recommend you to new buyers. Take Graze as an example. When you sign up for a Graze subscription, you are invited to recommend friends. If a friend takes up the offer they get 3 of their first 10 boxes free. The friend feels good that you thought of them. You feel good about giving them a little gift. Graze feel particularly good because they get a new buyer.

Even better for Graze, is the way that they’ve structured the offer. It’s not the first 3 boxes you get free. It is the 1st, 5th and 10th. Once you have reached 10 boxes, you have built the habit.

Getting a current buyer to spread the word to new buyers. For instance, when Coke Zero first launched a few years ago, they offered people a coupon for money off their first purchase. Then they told people to share the coupon with their friends. This triggers a network effect. Your activity gets far greater reach than it would otherwise have done. That reach is often better targeted – people share with other people in their network, who are typically people like them.   All these mini networks help you get to more prospects, and often, better prospects.

How about indirect routes?

Telling shoppers how many shoppers already buy you. Shoppers buy what they know other shoppers buy. Bestsellers are bestsellers because they are bestsellers. Read that again if it didn’t make sense first time. Yes, big brands are better able to do this type of communication. But smaller brands can also do it, by talking about the amount of relevant buyers who buy them. For instance, if you have a product targeted at young mums, say it is the bestseller amongst young mums.

Telling shoppers what existing shoppers say. These are things like ratings and reviews. Used heavily in other industries – e.g. the travel industry – and now starting to play more of a role in FMCG.   It can be collective, for example, ‘loved by you’ in Waitrose. Or it can be specific, for example, individual shopper ratings and quotes in Boots. Either way keep it simple. Nobody reads the 50 reviews on Amazon, they use the number of stars as a shortcut.

Telling shoppers what other shoppers do. So, people who bought X also bought Y. In the FMCG world this can be particularly relevant for meals and key consumption occasions – ‘most shoppers have A with B’ or ‘used in X amount of lunchboxes’. The tactic can also be used in personal care when you want shoppers to add an additional product to their hair care or shaving regime.

In the modern world with so much choice and information, how do people figure out what is good or bad? Well, they follow what other people do, especially people they trust.

It’s a simple rule of thumb, but a pretty good one.

Feel free to forward.  Have a great weekend and speak to you next week.

© 2020 by Insight Traction