But customer acquisition cost isn’t just about direct conversion. It encompasses the total cost to ensure that each stop along the customer’s purchasing journey produces the highest conversion rate possible. 

Chapters:

1. What is customer acquisition cost?
2. How to calculate customer acquisition cost
3. The key to lowering your customer acquisition costs
4. Putting customer acquisition cost on the chopping block

What is customer acquisition cost? 

Customer acquisition cost is the total amount brands pay to obtain new customers and attract a larger audience.

While every brand has varying customer purchasing paths and uses different acquisition strategies, expenses generally include advertising, salaries for marketers, commissions, sales overhead costs, and more.

For example, art and entertainment e-commerce brands with less than four employees have an average customer acquisition cost of $21, while electronic e-commerce brands have an average of $377, according to Shopify. As a result, acquiring new customers is an inevitable and often painful expense for e-commerce brands.

Looking for more efficient marketing strategies is the one of best ways to get the biggest band for your buck. 

How to calculate customer acquisition cost

Calculating customer acquisition cost uses a standard formula. Divide the total cost of acquiring customers (cost of sales and marketing) over a chosen time period by the total number of customers acquired during that time

The formula for calculating customer acquisition cost is:

Customer acquisition cost = (total cost of sales and marketing) / (# of customers acquired)

Make sure to include every sales and marketing expense used (think salaries, ad spend, marketing tools) to acquire new customers and the exact number of new customers acquired. Let’s say your expenses totaled $44,000 and you acquired 1,000 new customers, your customer acquisition cost would be:

Customer acquisition cost = 44,000 / 1,000 = $44

The key to lowering your customer acquisition costs

To make every dollar count, you must identify solutions for lowering your customer acquisition costs. 

Want the key to doing so? User-generated content — content such as videos, photos, and reviews created by unpaid contributors rather than a brand. If implemented correctly, your brand will see a significant return on investment. In other words, by using UGC, you’ll let your brand enthusiasts do the heavy lifting for you. 

You trust the opinions of your friends and family members. So, if you’re like most consumers, your network influences your purchasing decisions more than an ad you see on social media. In fact, 85% of consumers say UGC more influences them than brand content itself. 

Brands that implement a UGC strategy see a 29% increase in conversion. Take Tuckernuck, for example. The US clothing giant saw conversions skyrocket 190% after implementing a gallery of UGC on its website and displaying influencer photos on its product pages. 

UGC is undeniably powerful. But, to make it worthwhile for your brand, you must efficiently find and source content to use for your acquisition efforts. 

Ways to source UGC

Sourcing UGC doesn’t have to cost you a single penny. So where do you source UGC? Here’s some initiatives you can use to start driving more purchasing decisions with UGC. 

Offer incentives 

Consumers love to share their opinion. But sometimes they need a little persuasion. You can easily incentivize customer reviews by offering your shoppers a small reward in exchange for an honest review. The same goes for visual UGC too.

Global luggage brand Samsonite incentivized UGC submissions with a giveaway of $2,500 worth of Samsonite goodies. Using the #takewhatsyours hashtag, they encouraged followers to submit their best OOO replies for a chance to win the prize.

The campaign generated 27,000 submissions, which helped the brand achieve a 254% increase in revenue.

But your contests don’t always need to offer a material prize tied to it! 60% of consumers prefer to share UGC simply to have their content shared by a large brand. 

Ask for it

Spoiler alert: You can literally just ask your customers for UGC. Try a simple customer satisfaction survey, which will not only provide you with valuable UGC but also aid you in improving products going forward.

Or the easiest way to ask for UGC, especially written reviews, is with a review request email. These automated emails enable you to easily solicit feedback from consumers and display it across your channels. Our own research shows that they can lead to a 4-9x increase in review content.

Using customer reviews is extremely useful for lowering your customer acquisition cost, as you don’t need to spend (as much) to win over customers. 88% of shoppers already use reviews to discover and evaluate products, you just need to make sure you have the quantity and quality that consumers want.

When you do ask for reviews, be clear and concise about what you want. 53% of customers want brands to provide clear and concise guidelines for the type of content they desire, yet only 16% of brands do so, according to our research.

Engage with your community 

Building solid relationships with your brand communities doesn’t just happen out of thin air. It takes some effort to engage with your audience. To do so, reply to comments with personalized notes or create some fun banter, so they gain a sense of authenticity and connection. 

Engaging with your audience is purely to build relationships. This way, your followers will be more likely to offer up UGC in the future.  

Identify other ways to gather UGC 

Hashtags and brand-associated tags are great ways to quickly identify and source UGC. However, they’re not only solutions for sourcing UGC. Luckily there’s plenty of other ways to do so, like:

• Reading product reviews
• Editing event photos 
• Discovering YouTube mentions 
• Looking at tagged locations if you have a brick-and-mortar 
• Browsing Pinterest, Twitter, Tik Tok and other social sites 
• Using Google Analytics 

How to distribute UGC

Distributing UGC on social media platforms may seem like the most obvious choice, but there’s countless cost-effective ways to implement your UGC. Plus, repurposing UGC will help you lower your customer acquisition cost. 

Take a moment to identify all of the channels you can use UGC on. Then, pepper a little UGC everywhere you can think of. Here’s a few examples to get you started. 

Carousels and galleries 

Highlighting customizable UGC photo carousels and galleries inspire shoppers to discover products and shop simultaneously. Brands using this type of imagery see a 141% conversion lift and 15% value increase on purchases when shoppers engage with this type of content on their website, according to our research.   

Your brand can quickly build customizable carousels and galleries from user-generated content.

On product pages 

Your product pages are the last thing your customers see before making their purchasing decision. Using UGC on your product pages enhances the buyer’s experience and assists them in making more product discoveries. 

Say your site has a question & answer feature. Pinpoint the most frequently asked questions. This way, you can create a Q&A section on each product page that answers consumers’ most plaguing questions, essentially reading your consumer’s minds and aiding them in the purchasing journey.

As the questions change, you can alter this section of the product page to ensure it’s updated to your customers’ liking and provides more relevant content.  

To take your Q&A to the next level, Bazaarvoice’s Insights & Reports product suite can aid you in identifying common themes without all of the manual labor required for these efforts. 

Ads 

Adding UGC to your Google ad campaigns keeps your brand relevant, relatable, and current. When we spend months and months developing ad campaigns, they could quickly expire and not ensure the happenings within the market. After all, trends change course fast, so UGC can help you keep a pulse on the industry landscape and not waste precious ad spend on outdated content.  

But, always make sure to ask permission before using any UGC in an ad campaign. 

Emails

Consumers crave visual content at every turn. Displaying UGC on email campaigns helps engage subscribers and showcase your products as authentic and unique. After all, shoppers would rather see real people using your products than a model that they can relate to. 

For example, fashion retailer Monsoon started displaying UGC in its email campaigns, which resulted in a 4% increase in revenue and a 14% increase in click-through rate.  

For folks just getting started curating UGC, it’s also wise to learn the best practices for creating and curating your UGC campaigns. This way, you can avoid the mistakes of brands who paved the way for you. 

Putting customer acquisition cost on the chopping block 

Your customers are already creating and sharing content on social media. They’re expressing their thoughts and opinions about your products within their communities, whether that’s friends, family, social media, or wherever.

So why not use this content to your advantage to not only create stronger relationships with your customers and audience but to lower your customer acquisition cost. After all, 75% of shoppers are already making purchasing decisions from products they’ve seen on social media. Your products should be some of them.

Unfortunately, once companies decide to build a customer advocacy program, they often jump straight to the tactics to build programs, like implementing a sampling program, launching a blogger outreach campaign, creating gamification, or starting a social media page on a new platform.

But there’s steps to take and questions to ask yourself before diving in. Before we get into that though, there’s one question that first needs answering.

What is customer advocacy?

Customer advocacy is the method of nurturing relationships with your existing, loyal customers so that they champion your brand, products, or services in return. A strong customer advocacy program will turn your loyal customers into vocal ambassadors for your brand. Why is this important?

Because according to Gartner research, over 75% of B2B buyers consult three or more sources of advocacy before they make a purchase decision.

So the more acts of advocacy you have, the higher your chances of making a sale. But it’s not just new sales that are impacted — the customer advocacy cycle impacts every stage of the buyer journey.

Customer advocates want to share their experiences with your business and help other customers get the most value out of your product or service, which includes upselling and cross-selling. Advocates are who shoppers want to hear from, which is why at Bazaarvoice we have a strong focus on customer advocacy.

Types of customer advocacy program

There’s multiple customer advocacy strategies you can use to enhance the voice of your customers, from simple case studies to guest speakers on webinars.

• Speaking engagements. What better way to advocate for someone than to hear it directly from the customer’s mouth? Inviting a customer to speak on a webinar or at an event is a powerful form of advocacy, which also provides your customer with a brand promotion opportunity.
• Reviews. 88% of shoppers turn to reviews when evaluating a product or service, so having customer reviews on your website and social pages inspires confidence in potential customers. Platforms like G2 are a great source of business reviews.
• Case studies. Probably the most common customer advocacy program, case studies tell the success stories of your existing customers. Prospects don’t need to hear your sales pitch, they want to see how other similar businesses have performed and the potential ROI they could see too. Case studies to just that
• Customer quotes. Often easy to source and even easier to display, quotes are a quick way for customers to share their experience with your brand. They can (and should) be shared across websites, social channels, and email

What to consider when building a customer advocacy program

When there’s more than one strategy on offer, it can be difficult knowing where to start or which is best for your brand. Taking a step back to consider the three points below can help you choose tactics that work best for your advocates and your company — and build a successful program from the start.

1. Why do customers buy your product or shop in your stores?

Often, the answer to this question will be based on research you have already done or insights gained through social media monitoring. As you build your advocacy program, you’ll start to clarify why customers shop with you. But it’s important to have an idea in the beginning to see how to best interact with your consumers.

For example, advocacy programs for a business that knows that people buy its products to belong to a group versus one that knows customers choose its products because of convenience will be completely different, with different messaging and tactics.

2. What motivates customers to be advocates?

This is key for your customer advocacy program. Step into your customers’ shoes and ask why they would want to interact with you. Understanding this will help you bring what’s valuable to your customer to your program.

For example, if you look at what Sharpie did to engage with its fans online, you can see that they know that its customers want to show off their creativity. So Sharpie provides a place for advocates to receive recognition for their creative powers.

Sister company Prismacolor engages its audience in a slightly different way: Prismacolor loyalists define themselves as artists who want to give advice and learn from other artists, so the Prismacolor studio provides an avenue for artists to collaborate.

The tactics are similar, but the messaging and interactions are different, based on differences in their advocates.

3. How do I make it easy for my customers to advocate?

The big question. The easier you make it for advocates to talk about your products or services, the more volume you’ll see. Consider how customers interact with you today and where you could easily add a new touchpoint to encourage them to advocate. Or, how are they already advocating? Are they using particular hashtags or sites more than others? These behaviors might be ones you can noninvasively participate in, too.

Often the easiest way to build customer advocacy is through a brand community. These communities provide a platform for customers to engage with your brand and encourage them to share stories about you.

Customer advocacy examples

Diving down into these three areas can help you get the most of your customer advocacy program and help you decide on your next steps. The answers to these questions can help you decide which tactics would be most effective — and which to avoid. So, what will your advocacy program look like?

We often hear this from fast-moving consumer goods (FMCG) brands struggling to increase brand awareness and gather feedback. It may not sound like the biggest issue, but your potential shoppers are looking for reviews both on the digital and physical shelf.

The good news is, digital collection isn’t the only way to gather user-generated content (UGC). Sometimes, you simply have to go straight to the source and engage your consumer where they shop. 

What is offline marketing?

Offline marketing is any form of marketing that doesn’t take place online. (You don’t say!). Offline marketing examples include billboards, press releases, newspaper and magazine ads, TV commercials, and flyers, to name a few.

While online/digital marketing is essential for staying competitive, combining it with an offline marketing strategy is how you stay most competitive.

Offline marketing strategies for collecting content

One lesser known benefit of offline marketing though is the ability to collect content. Specifically, the kind of content that turns browsers into buyers. 

But as with approaching any new strategy, it can be difficult to know where to start with offline marketing. That’s why we’re going to look at how one brand, Hardys Wines, has already achieved offline marketing success.

Hardys Wines paired an offline marketing campaign to gather valuable ratings and reviews with retail syndication to boost review volume, increase brand awareness on retail websites, and enhance social media advertising. Here’s how.

1. An in-store campaign to gather reviews

To address the challenge of being a non-transactional company, Hardys decided to test an alternative UGC collection method: an in-store review campaign. Partnering with their Shopper Agency F&BM and online lesson provider Learning with Experts, Hardys launched a “gift with purchase” campaign across major U.K retailers like Tesco, Asda, and Sainsbury’s, using 15 of its best-selling products to draw shoppers in.

The wine bottles featured neck flags that encouraged customers to purchase the product, leave a review, and register for a free course via a microsite. Learning with Experts offered shoppers exciting courses on photography, French cuisine, container gardening, and more. And customers loved it.

Throughout this offline marketing campaign, the website received over 2,500 entries with over 1,100 courses claimed. 

Non-direct-to-consumer (non-DTC) brands often struggle to generate reviews because they lack the online space to collect and display UGC. But reviews are a key factor in conversions. Customers are 2x more likely to purchase a product if it has reviews, and product pages with reviews see a 354% increase in conversion rates.

“We’re looking at social channels, growing the brand, and making sure that Hardys maintains its position as the number one brand in the U.K using the sort of reviews that we’ve captured, ensuring that Hardys is at top of the mind for consumers,” said Alister Dell, Digital Marketing Manager at Hardys.

For Hardys, the offline marketing campaign resulted in over 1,700 reviews, a monumental number for a brand without an e-commerce store. The next challenge was displaying these reviews where consumers could read and interact with them, and the solution came in the form of syndication. 

2. Boost review volume with syndication

The decision to syndicate review content across retailer websites helped Hardys increase review volume and boost product ratings. Since non-DTC brands lack the digital space for ratings and reviews, ensuring partner retail websites offer a large volume of reviews is essential. 

Content syndication gathers reviews from every source and distributes them across major retail websites, creating a sizable collection for shoppers to browse. For Hardys, syndication resulted in a 2,316% lift in review volume across retailers’ sites, most notably Asda, Tesco, and Sainsbury’s.

Without syndication, numerous products would show zero reviews, creating a risk of revenue loss. 

Review syndication also led to an overall increase in product ratings across Hardys Wines’ three major retailers. Because ratings were based on a higher volume of reviews, Hardys product ratings went up from 4.32 to 4.59 stars.

Higher product ratings have major benefits for brands, from increased consumer trust to more prominent store search result placements. 

3. Improve marketing efficiency with UGC

UGC is a powerful tool, with 74% of consumers surveyed by Bazaarvoice agreeing that other shoppers’ photos increase their willingness to purchase a product. Knowing the value of UGC, Hardys chose to integrate it within their paid ads on social media and benefited from increased engagement and cost-per-click savings. 

Before launching the in-store campaign, Hardys used promotional images throughout their social media pages to build up interest and engagement. The images advertised various classes that shoppers could enroll in once they submitted their review. 

Once reviews were gathered, Hardys included UGC from the offline marketing campaign throughout its paid social media ads. This wasn’t a tactic that Hardys had previously used and the brand saw an incredible boost in audience engagement. With a modest budget, the social media campaign led to over 10,000 clicks to retailers’ websites. 

“We’ve captured a lot of reviews that we can use in our marketing collateral and we’re really pleased to report that it has led to an increase in advertising effectiveness in the form of better cost per clicks and more engagement,” said Dell.

Although savings weren’t an original priority, increased engagement also led to a cost-per-click decrease of 60%. This freed up a significant chunk of the ad budget that Hardys could allocate to other paid marketing efforts. 

Offline UGC collection: A strong marketing strategy for brands

Most brands, especially FMCG brands often have to get creative with their UGC collection methods. In-store promotions, sampling campaigns, influencer partnerships, and microsite content are excellent sources of valuable UGC.

Learn more about Hardys’ take on offline UGC collection, and how it impacted their review volume, marketing efficiencies, and impact at retail in the full case study.

Or continue reading to learn more ways to collect content that converts.

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How to collect content that engages and converts

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But with so many different types of influencer out there, not to mention the sheer volume of influencers, it can be difficult knowing how to put influencer marketing into practice. The best way to get ahead is by looking at case studies of those who have already achieved influencer marketing success.

According to our influencer research, there’s four types of influencer to work with:

1. Subject matters experts are experts in a specific industry or topic
2. Celebrities who have become known outside of what they’re famous for
3. Social media stars are well-known with large followers, often paid to promote products
4. Every day social media users like me and you who post authentic user-generated content

While different influencers have different influence for different audiences, it’s the everyday social media users who have the most sway with audiences. It’s easy to assume that more followers = more sway, but according to the 9,000 global shoppers we asked, that’s not the case.

So then when it comes to getting started with influencer marketing, where do you begin? Because there’s multiple avenues to go down. Let’s take a look at three of the best influencer marketing case studies we’ve seen, for the best strategies for you to emulate.

Top 3 Influencer marketing case studies

The following case studies all use influencer marketing, but all use a different type of influencer and a slightly different strategy. But they all have one thing in common: success.

1. BEMZ

Have you ever spent a lot of money on a piece of furniture only to stop loving it after a year or two? A lot of customers have. Which is why they turn to companies like Bemz to update their pieces. Bemz is a Scandinavian design company that specializes in creating made to order, high-end covers for IKEA furniture so people can update pieces in their homes to reflect their personal style better.

Over the past year and a half, Bemz has been populating its marketing channels with more visual user-generated content (UGC) to show potential customers what its products look like in real-life homes. A crucial part of Bemz’s strategy is its use of influencers. The brand relies on them to create evergreen content that Bemz continually collects and integrates into marketing programs.

But, the way Bemz partners with influencers is a little different than some of the other brands out there. 

A unique partnership

Bemz mainly works with influencers in its core markets, like Sweden, the United States, France, Germany, and the United Kingdom. However, it doesn’t go after the biggest names in interior design like you may think it would. 

Instead, Bemz chooses to work directly with influencers that already have an Ikea product in their homes to make for a more natural collaboration and build trust with customers. Many of the influencers it works with are in the interior design space, but it also goes after those in other sectors like fashion and beauty. 

“We pick influencers on a case-by-case basis depending on what the profile looks like, if we can get content out of it that matches our brand aesthetic, if they have great engagement, or if are really relevant in a certain sector,” said Alexandra Öhrlund, Social Media Manager at Bemz. 

Seeking out influencers who already own Ikea products is a more natural fit for Bemz. The brand ensures that its covers are shown repeatedly when the influencer posts photos of them hanging out at home on the couch, even if it’s not a Bemz sponsored post.  

Capturing the authenticity movement

In some cases, Bemz will work with influencers who don’t match the brand’s aesthetic. For example, the brand doesn’t showcase shabby chic looks or farmhouse interiors on its own site and channels. But they still choose to work with a leader within an influencer’s sector to build brand awareness and trust within that influencer’s community.

“It’s not necessarily something that we then incorporate into our content strategy, but we work with them because they have a great profile. They’re very genuine within their field,” said Öhrlund. 

This strategy works because it taps into the rising authenticity movement. 72% of shoppers now choose products based on a brand’s reputation. Consumers are fatigued by insincere, fake, untrustworthy content and crave authentic UGC from real people — partly why they consider every day social media users the most trustworthy influencer.

Bemz has found that this kind of content resonates much more with its followers. The brand continues to collect this evergreen content and display it on social media, which has seen click-through rates increase by 41%.

You can read the full Bemz influencer marketing case study here to learn more.

2. QUIZ

Before the COVID-19 pandemic, global fashion brand Quiz primarily focused on the in-store experience at its 250 brick-and-mortar locations. However, when stores started to close, Quiz knew it needed to focus more on its social and e-commerce strategies to increase engagement. 

To start, the brand began posting more user-generated content (UGC) images from customers on its social feed, because those types of posts have always had a very high engagement rate for Quiz.

The team also knew that they needed to make these images shoppable to guide interested consumers from the social feed to product pages on Quiz’s site. But they didn’t stop there. 

A micro and macro strategy 

One unique aspect of Quiz’s new social media strategy is its use of micro- and macro-influencers to increase engagement.

• Micro-influencer: Has a social media following between 1,000 and 100,000
• Macro-influencer: Has a social media following over 100,000

For a recent winter party collection, Quiz put together a list of micro- and macro-influencers it wanted to get UGC from for that collection. Then, Quiz shipped those influencers outfits from the new collection, and the influencers took photos of themselves in the clothing and tagged Quiz in the images.

“As soon as the collection is live, we can look through our gallery feed and pull the strongest images into the homepage gallery to showcase different influencers,” said Megan Ashurst, Senior Social Media Executive at Quiz. 

Quiz uses a mix of micro- and macro-influencers to maximize the impact of campaigns. Macro-influencers have a lot of followers, so their posts see a wider reach. But micro-influencers have smaller fanbases, so their followings are typically more loyal and tend to engage more with posts. Instagram’s own research of 8000,000 accounts supports this:

“We tend to find that we do get really valuable content and engagement from smaller influencers as much as we do from the big influencers,” said Ashurst. 

Quiz’s use of influencer content — on its website and social channels — led to a 276% increased time on site, a 23% higher average order value, and a 154% increase in conversion rates, making them one of the great influencer marketing case studies we’ve seen.

You can read it in full here.

3. RIMMEL

There’s only one thing better than an influencer marketing strategy: an Influenster marketing strategy. The Influenster App is a community of over 7.5 million every day creators, eager and willing to create authentic content about your brand.

Actually, they’re already creating this content. You just need to activate the community, which is exactly what British beauty brand Rimmel London did.

Rimmel activated the Influenster community through a hyper-targeted sampling campaign, where samples of products are sent to community members in exchange for honest reviews, product imagery, and social posts.

Because of the ability to choose a highly-specific audience, Rimmel was able to send products to an audience of 18-30 year old beauty enthusiasts in key markets. Recipients were asked to share their thoughts and feedback through reviews and social media posts.

The campaign led to over 1,200 product reviews and 15.7 million impressions on social, driving brand awareness and sales along the buyer journey. Incidentally, the campaign led to a 44% higher sales lift for the featured products.  

Learn more about how the campaign led to increased advocacy, brand awareness, and a 69% higher sales lift for the product categories in which the sampled products compete by reading the full case study here.

Become an influencer marketing case study

Play your cards right and it could be your brand featured here amongst the other successful influencer marketing case studies. We continue to see the rewards our clients have from working with influencers and content creators, so we know it’s the way forward.

Last year, influencer marketing spend jumped from $3.69 billion to $4.14 billion in the U.S alone, according to HubSpot. It’s past time to get started with influencer marketing. But whatever avenue you choose, you’ll first need to know how to reach out to influencers and get a yes in return.

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How to create an effective influencer marketing strategy

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How do you set out to offer the same shopping experience for both your in-store and online customers? How can your customers test your products’ smell, texture, and ingredients when they can’t touch them?

Sure, they can head to a retail store that carries your products, but with 32% of shoppers preferring to make all or most of their beauty purchases online, that leaves out a large chunk of the target market. And that doesn’t include the other shoppers who are increasingly making purchases online.

But before we get to that question, there’s another question we need to answer first.

What is customer engagement?

Customer engagement is every interaction you have with customers, both online and offline, anywhere in the shopper journey. It’s one of those terms every marketer knows, but if you actually pressed them for a definition they’d probably struggle for a concrete answer.

To increase customer engagement means to foster awareness, loyalty, and advocacy with customers. It’s important for businesses of every size because successful customer engagement means your brand is always top of mind for customers in the decision-making step of the buying process. When your brand is top of mind, you’re who shoppers come to first to buy a product.

3 ways to increase customer engagement

There’s multiple ways to increase customer engagement, but every strategy is a hypothetical suggestion until you’ve seen a brand implement them successfully. That’s why we’re going to look at the tactics beauty brand Fresh used to increase customer engagement, create a rich shopping experience through expanded review volume, and increase conversion rates, and drive a $1.65 million revenue impact.

1. Sweepstakes

Imagine buying your favorite product, leaving a quick review, and winning $100. Sounds like a good deal, right? That’s exactly what Fresh offered customers during its summer sweepstakes campaign designed to increase customer engagement and boost review volume. 

89% of consumers consult customer ratings and reviews before making a purchase, so collecting (and displaying) this form of user-generated content (UGC) is essential for every business.

Fresh customers were encouraged to leave a review on their favorite Rose product for a chance to win a $100 eGift card, and the brand immediately saw results. Within the first week, Fresh gathered 217 high-quality reviews, with 11% of those containing visual UGC, like pictures and videos. Throughout the month, review volume reached 549, with review ratings of 4.8. 

High product ratings are essential in marketing beauty products, but they can also be damaging if review volume is low. A recent survey revealed that 68% of shoppers don’t trust high ratings unless they also see a high review volume. Because Fresh — armed with guidance from Bazaarvoice — gathered an extensive amount of reviews, the ratings made sense to potential buyers. 

“Now we’re actually doing one [sweepstakes campaign] per quarter and we know that this is going to be an always-on strategy that we want to continue to grow. ” said Brittany Uhal, Senior Manager of the US e-commerce team at Fresh.

2. Visual user-generated content

According to a Bazaarvoice survey, 66% of shoppers look for visual UGC before buying a product, making customer photos and videos a key factor in persuasive reviews. In the beauty industry especially, this type of content is crucial for increasing customer engagement and selling a product.

Social media, online beauty communities, and review sections provide valuable visuals for online shoppers, which can make or break a product’s reputation.

“I think it was two years ago that a beauty product went viral on TikTok and completely did record-breaking sales. I think every beauty brand, whether they want to admit it or not, is trying to recreate that or understand how to break that algorithm,” explained Uhal.

With this in mind, Fresh introduced photo-first displays, putting visual UGC front and center. Now, when customers shop on product description pages, they’re able to get a good feel for products through detailed photos and application videos submitted by fellow consumers. 

“Photo-first displays lead customers to leave more photos of their own, so it was great to see that within the increased reviews,” explained Uhal. This cycle of consuming and creating visual UGC means higher customer engagement, a better online shopping experience, and increased sales for Fresh. 

“We know UGC isn’t the future — it’s now. So how do we incorporate all of this great social content from the customers that we already have?” said Uhal. 

3. Retail syndication

With 19 international sites and three major retailers stocking Fresh products, the decision to syndicate reviews was an easy one. Syndication takes organic reviews from original sources, like fresh.com, and distributes them across all online sales channels. For brands like Fresh, this means a wealth of reviews shared between global sites and major retailers that stock the brand. 

With the Bazaarvoice Retail Syndication tool, Fresh saw a 7,702% increase in review volume, and they also used it to tackle another challenge: limited edition products. Limited edition gift sets and holiday bundles are popular features on most beauty brand websites, but gathering reviews is difficult because they have such a short lifecycle. 

Instead, Bazaarvoice syndicated reviews for the core products within the limited edition gift sets. When Fresh launched the new product description pages, they already contained a strong collection of UGC.

“We know reviews increase conversion and interaction. We wanted our limited edition products to have that as well, and it’s been great to see that,” said Uhal. 

A Fresh way to increase customer engagement

Fresh has big plans for its beauty e-commerce model: integrating more social content, building relationships with influencers, and expanding its sweepstakes campaigns.

“We’re really excited to continue growing our program at Bazaarvoice. At Fresh, we always say the sky’s the limit, and I feel that way working with Bazaarvoice,” said Uhal.

Transform your e-commerce strategy and increase customer engagement by learning more about Fresh’s successful implementation of Bazaarvoice tools here.

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Increasing your CLV will boost customer loyalty and retention, and lower your customer acquisition cost in the process. Read on to learn everything you need to know.

Chapters:

1. What is customer lifetime value?
2. How to calculate customer lifetime value
3. The importance of measuring customer lifetime value
4. Strategies to increase customer lifetime value
5. Customer acquisition cost vs lifetime value

67% of businesses are prioritizing customer retention over acquisition this year, according to Segment’s 2022 Growth Report. While we often consider new customers the key to growth, lifelong customers are a more stable, profitable investment in a changing economy. 

Customer lifetime value is a key metric to track when prioritizing customer retention because it provides a forward-looking overview of your customer relationships, efficiently allowing you to plan for future growth. 

Increasing customer lifetime value ultimately builds stronger relationships, boosts profits, and reduces churn. 

What is customer lifetime value?

Customer lifetime value is a metric that calculates how much the average customer will spend on your products or services throughout their lifetime. It’s a predictive model that gives you a look into the future, allowing you to make well-informed decisions regarding budgets, marketing efforts, and product development. 

It also reveals how loyal your customers are — a crucial insight that directly relates to customer satisfaction.

How to calculate customer lifetime value

The basic formula for calculating customer lifetime value is average customer value (CLV) multiplied by average customer lifespan (ACL). You get your average customer value (ACL) by multiplying average order value (AOV) with average purchase frequency rate (APF). Thus, the basic formula for calculating customer lifetime value is: 

AOV x APF x ACL = CLV

Average order value measures how much the average customer spends in a single transaction and is calculated by dividing the total amount of revenue by the number of transactions. The formula for AOV looks like this:

Total amount of revenue/Total number of transactions = AOV

Average purchase frequency rate calculates how many transactions a customer makes during a set period of time, which is calculated by dividing the total number of transactions by the total number of customers who made purchases during this time. The formula for APF is:

Total number of transactions/Total number of customers = APF

Average customer lifespan forecasts the length of time that customers will continue to purchase your product or service. It can be calculated two ways, depending on how much customer data your organization has. If your company charges customers on a subscription basis, you have access to detailed lifespan information because you know the length of every customer’s contract. In this case, you c

Sum of customers’ lifespans/Total number of customers = ACL

If your company uses a different payment model or doesn’t possess this data, you can still measure average customer lifespan. Start by figuring out your churn rate for a specific period of time with this formula:

(Number of customers at the beginning – Number of customers at the end)/Number of customers at the beginning = Churn rate

Then, use that figure to calculate ACL by dividing 1 by the churn rate. For example, if you had 100 customers at the beginning of the year and 90 at the end, your churn rate would be 0.1. This works out to an ACL of 10 months (1/churn rate). 

The importance of measuring customer lifetime value

While metrics like Net Performer Score (NPS) and customer satisfaction surveys (CSAT) are helpful for analyzing customer relationships in the present, measuring customer lifetime value gives you a glimpse into the future. Which comes with its own nice set of benefits.  

Gauge and improve brand loyalty

Customer lifetime value is a key indicator of brand loyalty. If CLV is high, that means customers are bringing a long-lasting relationship and a sustainable, continuous source of revenue to the table. They’re loyal. Measuring CLV helps you gauge loyalty among different audience segments and reframe your strategy, showing you where you might need to step up your game or shift focus.  

For example, say you use age to divide your customer base into segments, and you find that:

1. Segment A (26 to 35-year-olds) has a CLV of $10,000
2. Segment B (36 to 45-year-olds) has a CLV of $2,000

Then you can dig into the specifics of why Segment A is more loyal and how (and if) you can replicate those results for Segment B. Maybe you’re not investing enough in marketing for Segment B. Perhaps there’s a bad product-market fit for Segment B, and you should focus on increasing customer lifetime value for Segment A, which has already proven to be profitable long term.

Inform budgeting decisions

Retaining satisfied, loyal customers requires a lower monetary investment than acquiring new ones, but new customers are still an essential component of growth. Measuring customer lifetime value allows you to find the right balance and inform your budgeting decisions (ultimately leading to an increase in revenue.) 

Comparing CLV to your customer acquisition cost (CAC) allows you to determine where to invest more resources. On the one hand, if CLV is low and CAC is high, you should invest more into retention efforts to guarantee a steady profit from customers who’ll be loyal to you. It also doesn’t make sense to continue spending large chunks of your budget on acquisition if you’re having trouble retaining customers — it’s essentially a leaky bucket.

On the other hand, if CLV is high but CAC is low, it makes sense to invest more of your marketing budget toward acquiring new customers since current customers are satisfied. Getting the right balance means maintaining strong relationships with satisfied, loyal customers while steadily growing your customer base. 

Gain customer insights that support marketing strategies

CLV is a surprising source of customer insights that can help streamline your marketing efforts, product launches, and promotional calendars. Since the metric is a good indicator of how often a customer buys a certain product and how much they’ll spend, it can inform pricing strategies and product launch schedules. 

Say an e-commerce company that sells backpacks determines that its customer lifetime value for Model A is $4,000. (AOV = $100, APF = 2 years, ACL = 20 years).

Using this information, the company might plan a product launch for the new version of Model A every two years to get loyal customers excited about their new purchase and increase the probability of making a sale. 

Apple successfully uses this strategy to launch new iPhone models. Research shows that the average iPhone user tends to replace their phone approximately every two and a half years, and until the recent yearly release schedule became popular, Apple launched a new model every two years.

To build up excitement, the company holds a press conference where it dives into every single detail of new product models, ensuring loyal customers line up outside stores on launch days and beat preorder records. 

Predict and prevent customer churn

Measuring customer lifetime value helps predict churn because a high CLV indicates that it’s unlikely a customer will switch brands. However, a low CLV might be a warning sign that a customer won’t stay with you for long. 

CLV is also a constantly changing metric, especially on an individual customer level. Tracking the numbers over time provides a good indication of how customer sentiments are changing. If you notice a customer’s CLV decreasing from one year to the next, it might be a sign that the customer is ready to churn because they’re either spending less per order or reducing their ordering frequency.

Catching this trend early allows you to reach out to the customer and launch a retention strategy, like offering promotional prices or a monthly discount on subscriptions. 

Personalize customer service

According to Acquia’s 2022 CX Report, 58% of organizations surveyed say their number one priority over the next twelve months will be strengthening their customer service strategy to retain current customers. CLV is an important metric to base meaningful customer service decisions on — decisions that ultimately help your organization thrive. 

A good way to personalize customer service using CLV is by extending promotions or incentives to existing customers with a high CLV. They bring a lot of value to the company, and you want to keep those relationships strong.

For example, a customer at an outdoor equipment company might contact support because their recently purchased product is defective. If a support representative sees their CLV showing consistent purchasing frequency and high order value, they can offer a special discount or promotion to persuade the customer to continue the relationship. 

Strategies to increase customer lifetime value

Increasing the customer lifetime value comes down to creating an unparalleled customer experience, boosting satisfaction, and building loyalty. 

Identify pain points and offer valuable solutions

A product or service that offers a solution to your customers’ pain points is crucial for increasing customer lifetime value because it turns wants into needs. But defining their pain points and building solutions that will work can be difficult without direct customer feedback. 

Ratings and reviews are valuable tools for identifying the challenges your customers face and what they’re looking for in a solution. There’s a staggering amount of relevant information hidden within reviews, from key product features loved by customers to confusing operating instructions.

Say an online tax platform releases a new version of its software and notices CLV decreases over time. The platform then analyzes reviews of its update to find that the new interface is difficult to use, and customers have a hard time navigating it. These insights can then be used to fix the issue or offer users an educational guide to the new platform. 

Case in point: children’s product manufacturer KidKraft used its collection of over 56,000 reviews to hone in on what customers liked and disliked about its products, and adjusted its marketing strategy to reflect that.

Even something as simple as picking out positive sentiments about certain product features within reviews and changing product display pages to include this information creates a more informative shopping experience for customers, allowing them to find solutions easily. 

Add value to stand out from the competition

If two brands offer a comparable product, but one boasts 24/7 customer service and a strong loyalty program, which one do you think is more likely to increase customer lifetime value? The choice is easy because our shopping decisions are often based on how much value we get from a purchase. If we’re buying a product or a service that comes with a better customer experience, it sweetens the deal. 

Amazon is a major example of an organization that adds value to stand out from its competitors — something that’s helped it dominate the e-commerce space. Customers choose Amazon because it offers time and cost savings to its shoppers through same-day delivery, instant checkouts, and free returns. In fact, a survey by eMarketer showed that quick commerce is the number one reason consumers shopped on Amazon. 

But convenience isn’t the only added value that Amazon boasts — it also sells memberships and subscriptions for a variety of services, including Prime, Kindle, and Amazon Music. The same survey found that 65.7% of respondents shopped on Amazon because they were Prime subscribers, which gives them exclusive member discounts, access to multiple services, and free product trials.

There’s virtually no other e-commerce platform that offers such a wide range of products and services, making Amazon stand out from the competition.

Make the most out of the onboarding process

The onboarding process is your customers’ first real taste of your product or service. Make it easy, fast, and convenient to win them over and turn them into loyal, long-term customers. 

Say your product is an AI-powered support operations platform that includes several integrations and tools. New customers (and their teams) will have multiple questions during the onboarding process, and their view of your brand will be a lot more positive if their access to answers and solutions is effortless and fast. Besides ensuring your customer service team is ready to handle their queries, create a stack of self-serve support options, including:

• How-to articles
• Video tutorials
• Community forums
• FAQs
• Guides 

According to NICE, 81% of consumers surveyed want more self-service options. Many customers prefer automated solutions where they don’t need to contact anyone because it’s more convenient, especially for smaller issues and queries. Creating a streamlined onboarding process that promotes convenience and focuses on your customers’ needs will boost your retention rate, turning new customers into loyal brand advocates. 

Personalize the customer journey

80% of customers are more likely to purchase a product or service if they receive a personalized experience, according to Freshdesk’s 2022 The Future of CX Report. Personalization makes customers feel valued and encourages them to become repeat customers, increasing customer lifetime value in the process. 

Personalization methods like customer loyalty programs and tailored social commerce keep customers coming back, boosting repeat business relationships and brand loyalty.

Sephora for example uses several loyalty and reward programs to encourage customers to return and buy more products. Shoppers collect points from every purchase to redeem for more products at a later time, but the beauty retailer takes it a step further by offering different tiers of rewards. Shoppers who spend over $1,000 a year at Sephora get exclusive gifts and perks, which encourage not only repeat purchases but also an increased number of purchases each year. 

Social commerce is another way to personalize service for customers by tailoring social media ads for your following and turning social media platforms into personal shopping spaces. Adding shopping links to social media posts allows you to track your customers and gather valuable demographic data like location, age, and gender, as well as contact information like email addresses.

This data is the backbone of your marketing efforts and informs future personalized campaigns, ads, product recommendations, and more. Areas of opportunity include:

Engage and involve customers

Engaging customers through multiple channels, including social media and email marketing, keeps your brand center stage in their minds and ensures they keep coming back. But just being seen by customers isn’t enough — engagement comes from building excitement and adding value. 

Gamification marketing is one way to keep customers excited about your products or services. It combines aspects of video games, like points, levels, and leaderboards, with traditional marketing campaigns. Imagine an online learning platform that advances users through levels with fun names, assigns points based on their usage, and creates leaderboards for the most advanced users.

This method fuels your customers’ sense of friendly competition and encourages them to continue their relationship with your brand.  

User-generated content (UGC) is another way to engage customers by incorporating their ratings, reviews, and images into advertising, product pages, and social media. UGC is one of the most authentic forms of content because it’s made by customers, for customers — and authenticity is a big priority for brands and retailers, with 74% of consumers preferring to see customer-created content while shopping.

Seeing user-generated content will also encourage customers to create more of their own, which keeps them involved and advocating for your brand. 

Upsell and cross-sell at the right time

According to Zendesk, 63% of consumers are, “open to product recommendations from service agents.” This creates a perfect opening for cross-selling and upselling your product or service — or does it? Cross-selling and upselling are two critical strategies for boosting CLV, but they need to be activated at the right time. 

For example, trying to upsell a customer who is very unsatisfied with your service will do more harm than good. CLV can help map the customer life cycle, informing companies about the right time to upsell and cross-sell. Customers with a medium or high CLV will be more receptive to trying new products or services or purchasing upgrades and premium options. 

Say you’ve been tracking a new customer’s lifetime value over a period of two years. They’ve tried your product, experienced all the features, and maybe even contacted customer care a few times. Throughout this time, their CLV remained steady or increased. Although the decision to upsell or cross-sell requires a deeper understanding of your customer’s pain points, using CLV to gauge how satisfied they currently are is a good indicator of a profitable opportunity. 

Offer unparalleled customer care

Customer care is critical in terms of retaining lifelong customers. 54% of consumers would abandon a brand after just one bad experience. Conversely, according to HubSpot, 93% of consumers surveyed would consider becoming repeat customers if the brand provided outstanding customer support.

From quicker response times to omnichannel support, there’s multiple ways to improve your customer care. Conversational commerce experiences, which share customer information across different support channels, are a priority for over 70% of consumers. So, when a customer contacts your support center via email, they can easily transition to speaking to an agent through a messaging platform like WhatsApp without having to repeat their issue. This both speeds up resolution time and creates a personalized care environment for customers, which leads to higher satisfaction rates. 

Another significant way to level up your customer service game is to transition to a proactive approach. Proactive customer service moves away from putting out fires to ensuring fires never start. Companies that offer proactive support contact customers when there’s an issue and de-escalate the problem by offering solutions before customers develop negative sentiments, boosting overall satisfaction and making customers feel valued. 

Companies like Ikea go above and beyond to ensure customer satisfaction, creating buying guides, inspirational content, and a new augmented reality app that allows customers to digitally place furniture into their homes. 

Beyond that, the company also provides post-purchase value-added services like spare parts delivery, furniture assembly, and a 365-day return policy. This well-rounded approach makes customers feel support throughout the entire purchase journey — from planning to purchasing to assembling. 

Customer acquisition cost vs lifetime value 

Customers, both new and old, are key drivers of your business’ growth and success. Measuring, analyzing, and increasing customer lifetime value leads to stronger relationships, increased revenue, and higher satisfaction scores from current customers.

But acquiring new customers is still an essential component of growth. Double down on your growth strategy by learning how to lower your customer acquisition cost.

Chapters:

1. What is proactive customer service?
2. The proactive customer service advantage
3. Best ways to implement proactive customer service
4. Examples of proactive customer service in action
5. Equip your brand with the right tools

Imagine you found the perfect pair of shoes to complete the look for a special event coming up. You ordered them online in enough time before the occasion, but the delivery window has come and gone. You check your email and texts to see if you missed a shipping delay notification, but there’s nothing there.

Then, you have to track down a customer service representative to find out the status of your order. They tell you because of supply chain issues, the order won’t ship for at least another week, which will be too late. Not cool. You leave a negative, frustrated review.

Now, let’s say in an alternative scenario, the company notifies you as soon as they learn about the delay. They explain the situation, apologize, and say if it’s something you need right away (it is), one of their local retail stores has the item currently in stock, and they can hold it for you to pick up. As a consolation for the inconvenience, they offer you a generous discount on your next order. You leave a glowing review about how great their customer service is.

What’s the difference between these two situations, other than one leaves you pissed off and one satisfied (if mildly inconvenienced)? The first is an example of poor, reactive–even negligent–customer service. The second is an example of proactive customer service. 

Brands that consistently practice proactive customer service will elevate their reputation, lower operating costs, and increase customer lifetime value. Find out what it means to deliver proactive customer service and examples of brands that have expertly accomplished it.

What is proactive customer service?

Proactive customer service is letting customers know about a problem and offering a resolution before the customer is even aware of the issue. However, it isn’t always about problem solving — nor should it be. Proactive customer service can also be notifying customers about updates and ways that could improve their customer experience.

This approach diffuses issues when they’re manageable before they get out of control. It also establishes preventative measures to set expectations, clarify, answer questions, and offer enhancements before purchases are even made. 

On the flip side, reactive customer service is only addressing a problem once the customer is forced to bring it up. At this point, the customer is likely stressed or upset about the issue, which puts more pressure on the customer support department and can lead to lower customer loyalty. 

The proactive customer service advantage

There’s a big potential for brands that practice proactive customer service. The ones that do will have a distinct competitive advantage. According to a Gartner survey of over 6,000 customers, a mere 13% claimed to have experienced any proactive customer service from brands they recently interacted with. Delivering proactive customer service will make you a leader in your industry.

Higher customer satisfaction

Not providing proactive customer service is a huge missed opportunity. The same survey above found that the customers who did receive some form of proactive service significantly preferred it. Key customer service metrics like Customer Satisfaction Score (CSAT), Customer Effort Score (CES), Value Enhancement Score, and Net Promoter Score (NPS) improved by a full percentage point across the board.

In addition to these score increases, 85% of customers rated the experience as valuable overall.

Lower business costs

Gartner’s Senior Director Analyst, John Quaglietta notes, “Shifting from reactive to proactive conversations is a game-changer, delivering nearly effortless experiences, reducing cost and increasing customer lifetime value.”

Some savings from this strategy include reduced customer support calls, thus lowering labor costs. On the other hand, proactive customer service encourages higher customer engagement with self-service channels and resources to help themselves

Stronger customer loyalty

Customer service directly impacts customer retention. Microsoft’s Global State of Customer Service Report found that 90% of consumers say a brand’s level of customer service is an important factor in their choice to become a customer. Furthermore, 58% of customers surveyed claimed they would end their relationship with a brand after a poor customer service experience. 

Keeping your existing customers happy turns them into loyal customers, which has various benefits for your business. Even when you increase customer retention by 5%, your revenue increases by 25-95%. Loyal customers keep returning and become advocates because they feel valued by their brand of choice.   

Ways to implement proactive customer service

If you haven’t fully (or even partially) implemented proactive processes and procedures yet, don’t worry. There’s specific actions you can take to transition your customer service team from reactive to proactive and outperform your competition. 

The Gartner customer survey shows the top use cases for proactive service are:

• Resolving an issue (30%)
• Educating customers on a new feature (20%)
• Introducing a new product (18%)
• Renewing a purchase (12%)
• Informing about new contact methods (10%)

Here’s our top five proactive customer service best practices for retaining customers.

1. Enable self-service

Providing the information and resources that allow self-service makes it easier for the customer and the customer support team to solve issues. Customers also consider it just as valuable and impactful as assisted service. 

One essential part of self-service is developing and maintaining a robust FAQ page on your e-commerce site. A successful FAQ page has all the major and minor questions that come up throughout your customer’s journey. It should also include a search function for a convenient user experience. It’s helpful to organize your FAQ into sections for each type of concern, like shipping, order issues, order updates, product details, returns and exchanges, etc.

You can take your FAQ page a step further by expanding it to a comprehensive knowledge base. In addition to FAQs, a customer knowledge base includes links to in-depth customer support articles, instructional videos and tutorials, and detailed contact information in different departments. According to Zendesk research, most Gen Zers and half of millennials go to help centers first to get answers to their questions and resolve issues themselves.

Collaborate with your customer service representatives to create your FAQ page and knowledge base. Identify the most common and pressing issues to provide preventative solutions for. Another way to supply the most relevant and helpful information is to refer to data from your conversational commerce channels, social media interactions, customer satisfaction surveys, and questions and answers features.

2. Offer live chat

Whether you use a chatbot or a real customer service agent, offering a live messaging feature on your e-commerce site is an effective proactive support method. This service can answer customer questions, refer customers to helpful resources, and guide them through the buying journey.

We’re in the era of instant gratification. Fortunately, these channels can efficiently answer questions and troubleshoot issues for customers. The cost of not offering real-time support could be losing customers altogether. Up to 87% of online customers claim they’ll abandon a purchase if they don’t receive quick answers to their questions.

However, the gains of live chat include a “15% incremental growth in new business revenue,” according to an Intercom study. If the customer’s questions are straightforward and easily answered, the chat feature can send them to your FAQ page or the most relevant landing page with the information. If it’s a more complex question about a specific product or order issue, that’s when a human agent should step in to message, email, or call the customer.

3. Mitigate issues with proactive customer outreach

A primary function of proactive customer service is contacting customers first about complications before they have to contact you. So, as soon as an issue is detected or anticipated, you should notify the customer and recommend the next steps. You can resolve the issue by offering an alternative product or service, issuing a refund, or providing a promo code or discount on a future purchase.

It’s essential that any proactive outreach is purposeful and addresses a specific issue. In Gartner’s survey, 90% of customers found proactive service valuable to resolve a problem or educate them on a new product feature or service. However, that percentage dropped to 56% when the reason for contact was unclear. So, whatever the reason, ensure your communication has a clear message and benefit for the customer.

Predictive analytics is a sophisticated tool that the customer service team and other departments can use to forecast upcoming problems and help respond to inquiries. This type of AI uses signals to detect customer sentiment and behavior changes, shipping status, and more. It identifies at-risk customers to help prioritize outreach. This allows you to get ahead of issues and have the correct answers to questions and concerns as they arise.

4. Utilize customer feedback 

Key customer touch points like customer satisfaction surveys, ratings and reviews, and social media conversations are great tools to create a positive customer feedback loop. These insights can improve and inform proactive customer service practices and other parts of your business. Analyze your negative reviews and suggestions from surveys to find out what customers didn’t like about their purchase or service.  

These resources can help develop self-service channels and identify and fix current problems, from packaging to product detail information and delivery service, to name a few. They can also contain valuable information about the products themselves to tweak and improve them. 

Learn more ways you can leverage customer insights to elevate your marketing strategy.

5. Make relevant recommendations

A key aspect of proactive customer service is making it a part of the online shopping experience with personalization techniques. This way, you anticipate your customers’ wants and needs and add value as they navigate your e-commerce channels.

You can program your personalization software to recommend complementary products, services, and upgrades based on their website activity.

For example, if a customer adds a home desk from a furniture brand to their cart, the brand could recommend an office chair or supplies to go with their purchase. They might also offer an assembly service if the item has a lot of different parts. In addition to making helpful recommendations, this is also a way to increase your average order value. 

Examples of proactive customer service in action

Many innovative, resourceful, and disruptive brands have already seen great success from implementing proactive customer service. Take notes from these brands that have integrated a variety of tactics into their processes based on what’s most impactful for their business and customers. 

Electro Depot

European home appliance and electronics brand Electro Depot uses insights gained from their customers to improve their products, reduce the customer service team workload, and lower product returns. They leverage Questions and Answers to offer helpful self-service for their customers, which reduces calls to their customer service department.

They also use details found in customer reviews to fix flaws in their products. For example, in a review left by a customer they discovered that one of their speakers would not operate while charging. So then they were able to rectify the problem.

And based on reviews for a different product, they learned that one component of a mixer was easily breakable, which they were able to strengthen thanks to this insight. Listening to, and acting on, customer feedback prevents future customer service issues and improves overall customer satisfaction.

MeUndies

The innovative direct to consumer underwear subscription brand leans heavily on customers’ user-generated content to address customer service issues and proactively prevent future ones. 

Instead of avoiding negative reviews, the MeUndies team tackles them head-on. They analyze recurring issues, get to the root of why they happen, and prevent them from happening in the future to eliminate the problem proactively. 

They also find opportunities to resolve customer complaints they find in any one to three-star reviews. Some of these problems are quickly and easily remedied, like a customer receiving the wrong size or color. Not only does this fix the current issue, but it shows other shoppers referring to reviews that MeUndies is on top of their customer service game. They can also get clarification on specific product questions that come up in reviews.

These reviews directly shape and improve product development, as well. The product team has come to rely on the feedback from negative reviews to learn about changes customers want to see. The team that manages customer reviews collaborates with the product team, automatically sending them negative review reports that they can implement into their process.

MeUndies uses a clever proactive customer service tactic by mobilizing their employees to leave product reviews. Their team is already familiar with and knowledgeable about their products, so they leave their own descriptive reviews to provide clear expectations for shoppers. These reviews are designated as staff reviews to ensure transparency.

Another way MeUndies leverages UGC for customer service is by repurposing their Questions and Answers exchanges for product page optimization. They add the Q&As to each product page they correspond with so other shoppers can learn from previous inquiries. This proactive method results in increased conversions and decreased customer service tickets.

Billabong

Billabong, the parent company of beloved sports and swimwear brands like Roxy, Quicksilver, and DC Shoes, and your favorite brand when you were 14, guides customers through each stage of their online shopping experience with personalized product recommendations. 

Harnessing AI, they use customer data to serve relevant recommendations at each major customer touchpoint, including the home screen, product pages, and shopping cart page. The recommendations are based on the customer’s browsing history on the e-commerce site and what specific page they’re currently viewing. 

For example, visitors will see different home page views depending on whether they’re first-time or returning visitors. First-time visitors will see top-selling product recommendations and existing customers will see recommendations based on previous purchases, products viewed, and categories viewed. Customers will see recommendations for similar products or complementary accessories on individual product pages.

This makes the shopping experience more convenient and personalized for the customer so they can find what best suits their unique needs and interests. The results of this strategy for Billabong include a 15% conversion rate on product recommendations, and an over 500% increase in overall conversion rate from product recommendations.

Stitch Fix

Stitch Fix is a subscription-based apparel brand with a highly personalized product that generates custom style recommendations for each customer. They have an extremely high-tech, sophisticated machine learning program to deliver this service on a large scale. One component of their AI is predictive analytics to make the best style matches and product recommendations for their customers.

The technology considers order history and customer feedback to tailor style recommendations for their next subscription shipment. A human stylist reviews the machine’s selections and sends it to the customer. When the order is finalized and delivered, the customer provides their feedback.

According to Stitch Fix, “There is a symbiotic relationship between her and Stitch Fix, and she gives us very insightful feedback that we use not only to better serve her next time, but also to better serve other clients as well.”

Their business model offers a continuous cycle of customer feedback and service refinement. This built-in system allows them to improve their service for each customer and pass that knowledge on to other customer relationships. Their predictive analytics anticipates the needs of their customers so they know how many new styles to design and have in stock at any given time.

Equip your brand with the best tools for proactive customer service

Your customers are already telling you how to serve their needs best — you just need to know where to look. Mine your customer reviews, customer satisfaction surveys, and social media interactions to uncover the nuggets of insight to improve your customer experience.

If you lack that content, learn how Bazaarvoice’s Ratings & Reviews and Questions & Answers tools can boost your resources. Nestle Canada did exactly that when they wanted to increase customer satisfaction. How did it go?

You can read the full case study here. Or if you want to learn how to streamline your response strategy when customers provide feedback, join Caroline Macmillan, E-commerce Product Content Merchandiser at Arc’teryx, below, as she outlines the necessary tactics.

FREE MASTERCLASS

Arc’teryx’s: Acquiring and responding to customer feedback

Learn more here

What is content syndication?

Content syndication, or retail syndication, is a method of driving revenue by republishing pieces of content (whether brand or user-generated) on one or more different channels — like e-commerce sites and social media pages. Businesses of all sizes use content syndication because it puts content in front of shoppers wherever they are, encouraging them to make confident purchases.

One such brand that utilizes content syndication is travel brand Samsonite, who wanted to increase branded and influencer content across channels for retail and wholesale divisions. Despite being a household name for travel products, Samsonite has faced several challenges. Namely, they wanted to:

• Boost product discovery
• Increase presence across sales channels
• Effectively distribute authentic user-generated content

In order to meet these goals, Samsonite partnered with Bazaarvoice to syndicate reviews and other content across new channels. 

Being able to more broadly distribute and share this content that we’re so heavily invested in and are spending a lot of our budget on developing really gave us a competitive edge

Meghan O’Keefe, Senior Digital Marketing Manager, Samsonite

By leveraging content syndication, Samsonite was able to significantly increase revenue and create an exceptional online shopping experience across all sales channels. 

Expanded product galleries inspire customers and skyrocket sales

Before content syndication, Samsonite struggled with finding the right content distribution channels that were also conducive to product discovery. But they found a solution in Bazaarvoice Galleries. This tool became an essential part of Samsonite’s strategy to deliver travel-inspired content and authentic visuals to their customers while boosting revenue. 

Galleries consists of branded, influencer, and customer visual content and acts as a segway to product description pages. Rather than encountering a boring product description page, shoppers are able to browse a dynamic and engaging page featuring authentic user-generated and branded content, helpful ratings and reviews, and common questions and answers.

Upgrading these product description pages resulted in consumers spending 5x more time on pages, browsing galleries, and choosing to purchase at 4x the average rate. As O’Keefe explained:

When our users engage with our galleries, we’re able to achieve conversion rates at about 4x their normal rate. Not only are people spending more time on our sites, they’re also spending more money, which is a great KPI to consider too

Since 74% of shoppers believe that user-generated content is an important factor in the purchase decision, the authentic visuals of a product gallery act as a trust signifier for consumers. Through Bazaarvoice Galleries, Samsonite experienced a $599K increase in revenue since the last quarter. They also saw a 15% increase in the average order value of products when shoppers browsed gallery pages. 

How to syndicate content

Featuring content on product pages is one thing, but knowing how to syndicate content across different channels takes that to the next level. Which is where content syndication comes in.

For example, reviews are a crucial source of information for shoppers, with 88% consulting reviews before making a purchase. Imagine trying to decide between two products with similar features and price points. One has zero reviews, while the other has thousands of authentic reviews with pictures and ratings. The choice is clear. So it’s imperative to get review content in front of shoppers, wherever they are.

Samsonite struggled to maintain review sections across its many partner sites and retail channels, resulting in a lack of information for shoppers. Once syndicated reviews were launched through the Retail Syndication tool, Samsonite saw a 1,360% lift in review volume on destination sites like Target, Walmart, and Macy’s. 

Websites that had no prior reviews now contain healthy review sections too, providing shoppers with a wealth of information about Samsonite’s products. The Bed, Bath, and Beyond website alone went from zero to 28,260 authentic reviews. 

Retail Syndication leads to cohesive content distribution

Cohesion and consistency across channels creates a seamless customer shopping experience, which is exactly why Samsonite employed the Bazaarvoice Retail Syndication tool for visual content distribution. 

“I think that because we have the two divisions, direct to consumer and wholesale, and they’re always trying to live in harmony, it can sometimes feel a bit just disjointed when our branded content on our own sites, doesn’t quite match, or even exist, on our retail partner sites,” explained O’Keefe. 

Retail Syndication allowed for more brand consistency because UGC gathered from social media and branded content was now integrated throughout all sales channels. Shoppers searching for Samsonite products on popular retail websites like Walmart encountered the same visuals as those who shopped directly on Samsonite. 

Samsonite’s competitive advantage: user-generated content

User-generated content is at the core of Samsonite’s brand. With a balanced mix of authentic reviews and ratings, inspirational travel content shared through numerous channels, and stunning product galleries, they’ve created a cohesive brand experience, drivn product discovery, and increased revenue. 

Bazaarvoice Galleries and Retail Syndication tools play a key role in streamlining these processes. Meghan O’Keefe highlights how effortless it was to work with Bazaarvoice to implement these solutions. 

“It was very seamless and easy. The Bazaarvoice team took a lot of initiative and a lot of work off of our team. We implemented over the Covid-era and, at the time, our team was very lean, so to be able to implement such an important software and having it be so easy, is something people should know.” Read our full Samsonite case study here for more details.

Bazaarvoice makes content syndication simple. With our tool, you can easily syndicate content to our network of over 1,750 retailers — that’s 20x more traffic than other networks. More content in front of more shoppers means more revenue for your business. Learn more about Bazaarvoice Retail Syndication. Or get in touch directly below to get started.

Chapters:

1. What is a brand community?
2. Benefits of a brand community
3. How to build a thriving brand community
4. Brand community examples
5. Build your business-driving engine

If you’re a millennial or older, you know what a fan club is. Maybe you were even a member of your favorite band’s fan club at some point. Maybe you still are. If so, you know the thrill of getting access to early releases, pre-sale tickets, exclusive material, stickers, and other free swag. And who could forget the chance to geek out with other like-minded individuals who shared a common passion?

Brand communities are like modern-day fan clubs for consumers. A strong brand community is a very good indicator of how loyal and engaged an audience is, which is a big factor in the overall success of your brand. But just like fan clubs, brand communities need dedicated nurturing and maintenance for long-term success.

Discover the many ways brand communities can help your brand and how to launch and manage one for the best results. 

What is a brand community?

A brand community is an online meeting space for customers (fans) of a brand to interact with each other and the brand, while gaining access to exclusive content and offers. Members of a brand community are dedicated customers who want more of what your brand has to offer. They’re galvanized by the lifestyle, values, benefits, and impact the brand represents. 

Benefits of a brand community

Brand communities are great for boosting qualitative feel-good KPIs like brand loyalty and emotional connection, but they also have very real, practical functions. There’s multiple positive outcomes of a brand community, each with its own specific ROI.

1. Foster an emotional connection with customers

Customers involved in brand communities feel strongly enough about a brand to be a member. In other words, they’re your brand’s most loyal customers. Like old-school, die-hard fan club members, these customers have an emotional connection with the brand and are usually the biggest advocates. This is a special quality in a customer base and not always easy for brands to cultivate. So you should hold onto it tightly once you have it. 

Emotional connection has a direct impact on consumer behavior. A Motista study of over 100,000 consumers conducted over two years found there were significant benefits in emotionally connected customers. These customers:

• Spend double or more with their preferred retailers over other retailers
• Have over 300% higher lifetime value
• Are loyal to brands longer, and recommend brands at a much higher rate

The community aspect is another important factor. Forrester reports that, “the desire to form a bond with fellow shoppers around a certain brand is one of the strongest drivers of consumer interest in DTC brands.”

2. Provide an outlet for product, marketing, and concept testing

Brand communities also create a venue for testing ideas and products with a captive audience. This can lead to product development and improvement and drive innovation. If you’re wondering how your target audience will respond to a product, service, marketing campaign, or anything new and different from your brand, ask members of your community directly.

You can also gauge their current sentiment and satisfaction with your existing offerings. According to a GRIT Report, online communities are the top method of market research, accounting for 59% of responses.   

A very useful function of establishing a brand community is having a group of target customers you can send product samples to. A product sampling campaign is an extremely effective way to get customer feedback about newly released products, updated products, and older products that need to be reintroduced to shoppers. By providing product samples to your community members, you can get back honest feedback from the people who know your brand the most. 

This can lead to changes and updates to improve the product and help make official product launches more successful.

3. Generate user-generated content

Brand communities also serve as another source of user-generated content (UGC). They offer a space for community members to share reviews, feedback, and visual UGC, like photos and videos of your brand’s products. UGC has the power to influence other customers within the community. And, with permission, you can share that content on your e-commerce website and social media channels and reach a larger audience.

Showcasing visual UGC on product pages can significantly increase conversion rates, and customer reviews influence purchase decisions for 97% of shoppers. 

4. Create an efficient and effective customer support channel

The thing about customer service issues is that if one customer has a question, chances are many others do, too. That’s why forums like Quora and Reddit and Yahoo! Answers (RIP) are popular sites for people to ask questions and troubleshoot problems with other consumers. Brand communities can provide the same resource but on the brand’s own platform. 

There’s no question that brand communities require money, time, and maintenance. But a Harvard Business Review contributor wanted to know if the investment was worth it from a customer support standpoint, so he conducted an experiment to find out. After hiding a client’s brand community for four months, he realized that using the community to communicate with customers and resolve issues was 72% cheaper for the client compared to its other customer support channels. Furthermore, customer satisfaction scores “plummeted to one of the lowest levels on record” when the community was inactive. 

5. Improve SEO value

That same experiment also revealed that 93% of traffic to the client’s brand community came from search engines. This shows that consumers, whether they’re already part of a community or not, are finding answers to their questions in the brand community via Google search (or using a different search engine). So, the keywords they are using in their searches lead them to discussions in the brand communities containing similar keywords. 

By appearing in search results, brand communities are organically attracting more visitors to the communities. As well as the brand’s website (or platform) that hosts the community. In the experiment, hiding the client’s community decreased its organic traffic by 83%. It also resulted in a 58% increase in customer support tickets and calls, which consequently overwhelmed the customer service department. 

How to build a thriving brand community

You need to put thought and effort into planning your brand community to do it right. Make your decisions with your business goals and customer satisfaction criteria in mind. Your brand community can be a part of your marketing department, or you may want to allocate dedicated staff to run and maintain it.

Choose your brand community platform

When planning your brand community launch, consider what platform makes the most sense for it to live on. This can include a section of your website, a social media group or separate account, or your brand’s mobile app. 

Forrester predicts that communities on brand and retailer websites will, “become more prominent.” Website-operated communities have their advantages, including access to more customer data and more administrative control, and encourage further exploration of the website. You can also add a questions and answers feature to provide your brand’s responses to customer inquiries within the community in addition to product pages.

Alternatively, your brand might already have an active audience on Facebook or Reddit. In that case, it might make more sense to use one of those channels as the community hub. Whichever platform you choose, other channels can promote and support your brand community, adding to the omnichannel experience. If your community is on your website, you can tease tips, feedback, and content on social media and vice-versa. 

Make it customer-centric

This might seem obvious, but communities made up of customers should serve the customers. They should provide a space for interaction, conversation, customer service support, and offer exclusive benefits. By engaging with customers, you can learn more about them and how they feel about your products. Then you can use that feedback to improve your products, services, customer experience, and create loyal advocates.

A thriving and self-sustaining brand community also needs to empower your customers to get involved with the brand and each other. LEGO Ideas is an example whose primary purpose is for customers to actively participate with the products and new product development and encourage each other in their own LEGO-related endeavors. With its brand community, LEGO gives its customers a chance to be collaborators. The LEGO Ideas community hub also includes its own dedicated blog, FAQ page, and links to customer service resources.

Part of having a customer-centric brand community is finding your audience’s niche and tailoring the experience for them. LEGO’s target customers are made up of creators and hobbyists of all ages who are motivated to make their ideas come to life. They then share them with others, contributing directly to the brand.

Apparel brand Uniqlo’s community craves the latest fashion trends, so the brand keeps them interested and engaged by partnering with new and cutting-edge designers and artists. 

Engage with your community

Brands should regularly engage with their community to boost customer retention, loyalty, and involvement. The chance to venture beyond a transactional relationship with a brand is a top motivation for customers who want to be a part of a community. 

That can mean offering membership perks like discounts and early releases. Also exclusive access to product and brand experts, stylists, personal shoppers, or other professionals your customers can chat with. Making sure you answer any questions brought up in discussions and providing quality customer support are some of the best ways to maintain engagement.

Engagement can reach beyond the community’s digital space to other virtual or in-person experiences. Other ways to connect members with each other and your brand can include live shopping events for community members, group exercise classes, and other organized in-person events.   

Make your community accessible

Just as you’d market any of your products, you should prominently position and promote your brand community to attract more customers to it. If your community is located on your website, make sure it’s easy to find from the home page or menu. 

Other website category pages can point to the brand community for relevant searches and content. For example, if a customer types a question on a customer service page that’s already been answered in a community forum, they can be prompted to go to the corresponding community page. 

Brands can also attach a branded hashtag to their community (#LiveBV anyone?) so customers can share questions and content related to that community on social media channels. Not only can brands continue community conversations on multiple channels, but they’re also able to expose a larger audience to their community and attract more customers.

Brand community examples

If you’re new to setting up a brand community, there’s a variety of different brands that have already done it successfully. Take notes on these active communities, all with their own approaches and niche audiences.

Nike Training Club

Nike Training Club is an example of a brand community with long-term success. It was Nike’s very first iPhone app that launched over a decade ago, and to this day, it’s one of its most popular digital channels. NTC owes its popularity and longevity to the fact that it puts the customer at the center of its mission. Originally created to solve two specific customer needs – motivation and training guidance – the app presents both its products and the surrounding community as solutions.

The community includes workouts by renowned athletes and a social aspect that allows users to interact with and support each other.

Sephora Beauty Insider Community 

Sephora has one of the best loyalty programs, Beauty Insider, that offers customers rewards based on points earned from purchases. The Sephora Beauty Insider Community is an extension of that brand, where beauty consumers can post questions and tips and share styles with the community. Anyone can access the community hub, but only members can post content and respond to other members’ posts. 

Sephora’s community is teeming with UGC, from photos of members’ makeup looks and product reviews to tons of tips and questions and answers about products and how to use them. The following video shows how members can successfully sign up and participate in the community.

Influenster

Influenster is Bazaarvoice’s very own consumer community with over 7 million members. It’s a destination for finding customer reviews on a massive amount of products from a wide range of consumer brands. The brand community is housed on its own Influenster website, and it just launched the Influenster mobile app.

Participating brands can send members product samples in exchange for reviews and visual UGC, which they can use to elevate their e-commerce product pages. This is an example of a focused and intentional way to manage a brand community for a large group of brands, although the same principles and strategy can be applied to a single brand community as well. 

Dole, a major fruit brand, leveraged Influenster to increase awareness of its full range of products by sourcing over 2,000 reviews from Influenster members in just a few months. This generated customer reviews for 74% of Dole’s product pages and a 64% increase in conversion rate among shoppers who saw the reviews.

Portland Leather Goods

Portland Leather Goods is an accessories brand that hosts its Portland Leather Insiders brand community on a private Facebook Group. The official PLI group is for customers and fans to get sneak peeks, early access, special giveaways, VIP discounts and exclusive content from the PLG team you won’t find elsewhere. It also encourages members to share their photos, reviews, tips, and other content with each other.

Intuit TurboTax + Mint Community

Taxes aren’t the most intriguing topic, but it’s one that all adult citizens (sadly) have to contend with. Especially around the annual filing deadline. There’s a lot of intricacies and details to keep up with, which is why accountants, tax agents, and tax attorneys exist. That’s also why TurboTax was created: to give individuals the option to file their own tax returns with support and guidance from the platform.

The TurboTax + Mint Community emerged as an additional service for TurboTax and Mint users to ask any and all of their tax and personal finance questions, and do their own research year-round. The community empowers its members to educate themselves and help others with any problems they might encounter. It features different discussion forums related to taxes, debt, investing, self-employment, and more. It highlights handy resources on the main community page and has links for access to customer support representatives and tools.

The community also features a leaderboard that showcases the top contributors who actively engage on the site. They receive “cheers” for answering questions, offering solutions, and posting their own thoughts and questions.

Turn your brand community into a business-driving engine

Other than attracting avid, loyal customers, your brand community should meet business goals. First, identify what those particular goals for your brand community are. Common goals include:

• Driving leads and conversions
• Increasing your customer advocacy
• Generating UGC as part of your marketing strategy
• Providing more cost-effective and efficient customer service 

Your goals will guide how you’ll structure the community and how you’ll measure the progress toward those goals. And the results of your brand community efforts will also reveal how it can support and collaborate with other departments, like demand generation and customer service.

As with all of your marketing initiatives, make sure you’re analyzing the performance of your brand community on a regular basis. Pay attention to metrics like member growth, conversions, UGC collected, website traffic, and anything else that’s relevant to your business goals. 

Want to see how one leading, global brand does it? Join Taylor Alston of J.P. Morgan, below, for a conversation on innovative community-building strategies.

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This comprehensive testimonial marketing guide will explain all.

Chapters:

1. What is testimonial marketing?
2. Benefits of testimonial marketing
3. How to make testimonial marketing effective
4. Testimonial marketing tactics and examples
5. Maximize your marketing with testimonials

If you’ve ever seen an ad for a new thyroid medication, then you know what faux user-generated content (UGC) looks like. Often, those ads include what’s portrayed as a consumer having a good experience with the company’s product — even though there’s a disclaimer at the bottom of the screen denoting them as a paid actor.

This type of testimonial marketing may work for selling medication, but many consumers today trust marketing efforts less than the real opinions of other consumers.

Testimonials show your audience the social proof they need to trust your brand. Even though most people don’t trust ads in general, 22% of shoppers are more likely to buy a product if they see an ad that includes a customer testimonial. That’s why testimonial marketing is so vital to e-commerce — it helps brands build a trusting audience.

What is testimonial marketing?

Testimonial marketing is a form of social proof that helps brands build trust, authenticity, and brand awareness. Consider this Yelp review for Da Andrea in New York, NY.

The review includes a 5-star rating and concrete details about the customer’s experience. Compared to this Super Bowl ad for Squarespace, however, it’s pretty dull looking.

Sure, the Squarespace ad includes a celebrity (Zendaya), great cinematography, abundant alliteration, and an interesting plot. But potential customers are more likely to be influenced by authentic testimonials given by actual customers. Consumers know you think you have a great product, but in their minds, there’s no proof of that until people like them also think you have a great product.

The good news is that testimonials aren’t just for review sites anymore — they’re used in basically all marketing materials.

Different forms of testimonial marketing

There’s many different mediums that can be used for collecting and displaying testimonials. You can claim your business on Yelp and take advantage of those written testimonials, for example. Here’s some suggestions for incorporating testimonials into your next marketing strategy:

• Written testimonials (i.e., customer quotes) can be included on your website in places like your homepage, product pages, success stories, or a dedicated testimonial page. You can also add these to social media posts. These can be easily paired with other mediums.
• Ratings usually occur on a 5-star scale and provide potential customers with a quick snapshot of what they should expect. Google and Trustpilot both allow customers to provide feedback through ratings, allowing many businesses ready access to this medium.
• Audio and video clips are versatile and provide concrete evidence of what other consumers enjoy about your product. They can be used on social media, YouTube, podcasts, your homepage, and your testimonial page.
• Images prove that your product is what you say it is, with or without staging Encourage your customers to provide images along with their reviews to further support the authenticity of their testimonials.

As a general rule, you should add online reviews wherever possible — landing pages, content marketing, email marketing, etc. Positive reviews placed in close proximity to a CTA can help drive conversions. But some testimonial formats work best with certain channels.

For example, audio or video testimonials are essential if you’re planning to use them to promote your product on a podcast. And case studies are best suited for testimonials in written or image form (rather than video clips).

Who can give testimonials?

It’s important to note which people are best equipped to provide social proof with their testimonials. This may change depending on your audience or what kind of message you want your customers to receive.

• Current and past customer testimonials are most effective at providing social proof. Real customers have personal experience with your product and can give honest feedback on that. Using testimonials from this group helps your audience better gauge if your product is right for them.
• Employees (or even the CEO) can provide testimonials to future employees. Testimonials about how you treat your workers can also enhance your company image since many consumers today care about supporting ethical business.
• Influencers and celebrities can endorse your brand on social media or through other mediums. While they may be less convincing than actual customers, they reach a wider audience. Just be sure to select someone whose brand aligns with your values.
• Regular people because most often, these testimonials come from campaigns allowing regular people to test your product. For instance, you might set up a blindfolded test in a grocery store or send out samples to consumers in exchange for their feedback.

Benefits of testimonial marketing

Testimonials benefit marketing campaigns in several ways: by increasing brand awareness, trust, referrals, and conversions.

Build brand awareness through positive word of mouth

Most consumers today care more about what their friends and family think of a brand than what the latest ad says. So, while you may spend a lot of time and money on advertising, the best advertising you can get is actually positive word of mouth.

According to Nielsen, “88% of global respondents trust recommendations from people they know more than any other channel.” Nielsen also found that people tend to trust recommendations, in general, more than ads — meaning that testimonials from previous customers can garner trust in your business without overspending on marketing campaigns.

Increase trust through connection and transparency

Testimonials allow your customers to share their feedback and opinions of both your customer service and product. This provides you the opportunity to reach out and connect with your consumer base. Making your customers feel heard is a powerful way to build connections and humanize your brand, as Gabi Contreras, Customer Marketing Manager at Observe.AI, explains.

Another helpful tip from Contreras is to review your customer demographics and format your testimonial marketing accordingly so you can further connect with each customer segment. For instance, you might display a combination of video clips and star ratings primarily on social media platforms to connect with younger audiences.

Testimonials also build trust because they’re transparent. They show prospective customers what to expect from you regarding quality, shipping times, customer service, and more. This information is more trustworthy than polished copywriting because it’s provided by other customers.

Drive referrals through psychological persuasion

Dave Albano, the CEO of Joza Marketing, describes six principles of psychological persuasion that he follows from Dr. Robert Cialdini’s book, “Influence: The Psychology of Persuasion.”

These six principles — Reciprocity, Scarcity, Authority, Commitment, Consistency, and Consensus — provide a basis for persuading consumers to not only engage with your product but also promote it.

As an example, Albano describes Reciprocity as that feeling when someone does something nice for you, and you feel obligated to return the favor. You might do something nice for your customers, like adding a friendly note to their package, providing dependable customer service, or including free shipping. This, in turn, increases both your customer’s positive view of you and their likelihood of recommending you to a friend.

Albano also describes how using these principles along with his TRS ask system (Timing, Request, Specificity) encourages the receipt of testimonials and promotes the “customer value journey.” As consumers become loyal customers, they become what Albano calls “advocates and promoters” — they’ll encourage new customers to try out your products because they know your brand well.

In other words, great testimonials help encourage the purchasing decisions of others.

Increase conversion on product pages

As we mentioned, testimonials can be placed in a multitude of places (more of that to follow later on). Homepages, emails, social channels, etc, are all highly effective in supporting the above benefits. And really, anywhere an actionionable item, like near a CTA or “swipe up” button, is going to reinforce a customer’s purchase decision.

But if you want to optimize your product pages for conversion, don’t be afraid to add testimonials directly onto your product detail page. Or any kind of services page. Placing testimonials on these pages increases conversion by 34%. That’s a hefty increase for very little legwork.

How to make testimonial marketing effective

The whole point of testimonial marketing is trust. Here’s how to use testimonials to your biggest advantage.

Results-based and specific

Your testimonials will have a greater impact if customers include concrete details about the product and their experience. Albano recommends using numbers and statistics whenever possible, especially your own data gathered from Net Promoter Surveys and Customer Satisfaction Score surveys.

Remember: Before sharing customer experiences, you should always ask them for permission to share information such as their name or company.

Easy to get to and easy to deliver

No one wants to spend 10 minutes searching your site for a way to read or leave a review (unless they’re really motivated by an undying hatred for your brand, in which case — watch out!)

That’s why you should make the testimonial process as smooth as possible for everyone. Offer to pre-draft something for them to approve via email or, if they say no, ask them to complete a smaller task like a one-click rating.

Good timing and follow-up

You should try to get customer feedback when they’re most excited. For example, ask customers to rate you in the order confirmation email or directly on the page where they made the purchase. Also, follow up with past customers via email or SMS. Ask them about their experience and if they’re willing to share their thoughts.

In exchange, you could offer a discount on their next purchase, or give happy customers a chance to be featured on your brand’s social profile or blog.

Conversational tone

Try to collect testimonials that are conversational, not robotic or overexcited. Your customers want to hear from a real person, not a cheerbot. Also, I know we’ve used the word a lot, but don’t scare them off with the word “testimonial.” Ask open-ended questions about their experience.

Mention you’re looking for stories, numbers, moments, and emotions. You can even ask your clients for video testimonials.

Examples of effective testimonial marketing tactics

Here’s some examples of how different e-commerce brands have used testimonial marketing effectively in different ways, and on different platforms.

Repurpose customer testimonials on your home page

Prospective customers will expect to see testimonials on your home page, so don’t forget to add your best customer quotes here, like Portland Leather Goods does.

The company also included a product image and a link to shop for the product to help customers take action after reading the reviews.

Add testimonials to social media ads

Taking your testimonials to social media helps make your high ratings that much more accessible to your audience. Using Portland Leather Goods as an example again, the brand noted its number of 5-star reviews in a paid Facebook ad.

The company’s ad prompted fans to organically praise the brand in the comments — which is a great way to build your brand image.

Include employee testimonials in your emails

While employee testimonials don’t speak to customers’ interest in your product, they can influence your brand image. Consider honoring employees in your emails like DSW.

DSW included an employee testimonial in a marketing email celebrating Asian American and Pacific Islander Heritage Month.

Retweet your customers’ reviews

Social media can also be a great source for finding organic written and picture testimonials. Wherever you can find them, be sure to like and share customer testimonials, like nail polish brand Orly did.

Orly regularly retweets customer photos of their manicures with ORLY nail polish.

Highlight your charity efforts with customer testimonials

Many consumers today want to know that your business is beneficial not only to them but also to the world in general. While you might say you’re an ethical business, the proof is in your customers’ view of you. You could follow Lush’s example.

The company placed a customer review for the Charity Pot mentioning its charity efforts on its Charitable Giving page.

Post celebrity endorsements on TikTok

If you have the connections, see if you can post a celebrity endorsement on social media. TikTok is a popular social media platform right now, and short videos with catchy or compelling content can easily go viral. For instance, Mountain Dew posted a video of celebrity Charlie Day singing a song about Mountain Dew.

They also tagged Day in the post with the hashtag #charlieday. The post earned 103K likes.

Make photo sharing easy and accessible

According to Bright Local, only about 2% of consumers never read reviews. And an important piece of any review is physical evidence of the product — a photo. Allowing your customers to post reviews with photos alongside the product listing as Amazon does lends credibility to the reviews that appear on your site.

It also helps other customers see what the product looks like under ordinary circumstances, without professional lighting or backgrounds.

Incentivize reviews through discounts

One way to encourage reviews is to incentivize reviewers by offering free samples or discounts in exchange for honest feedback. SHEIN, for instance, provides discount codes for YouTubers to share with viewers looking to make a purchase.

YouTubers with large followings show off their SHEIN items with the hashtag #SHEIN.

Develop your community

Creating a community space for fans to interact, share experiences, and be involved with your product creation not only grows your customer loyalty and brand awareness but also generates honest, positive testimonials that can be used to help promote those products across all platforms.

LEGO is a master at this. Its community page allows fans to create a profile, compete in contests, submit ideas, comment, and link to their own social profiles to create more sharing opportunities. Fans can also create new kits and submit them for consideration as an official LEGO set. If they get enough supporting votes from other fans, LEGO will create the kit and sell it in their online shop, like this Earth Globe.

The initial traction gained from the fan community (basically less public testimonials) helps LEGO learn which kits will be popular with the public. Then the company promotes it using a testimonial from the original creator, in this case, Guillaume Roussel.

Roussel spread the word about his creation across multiple platforms, including Facebook, where he shared more ideas on how to customize the kit.

Share good ratings on Instagram

When ratings are good, share them on Instagram. Instagram posts including ratings from your website can boost those testimonials and reach a broader audience, especially if you use hashtags. Parker Printables posted screenshots of customer testimonials and ratings on Instagram.

These testimonials highlight its great customer service.

Repurpose testimonials across all social channels

Not every customer is going to be on Instagram or TikTok or Facebook. But you can expand your reach to different audiences by being present on all of them as a business. Royalty Glow, for instance, repurposes testimonials from TikTok to Instagram.

This helps its IG followers discover the company on another platform. It also helps alleviate another perpetual problem: filling a social media schedule with good content.

Maximize your marketing with testimonials

Including consumer testimonials to your marketing efforts will help humanize your brand and engage your audience as people, not numbers. Letting your customers, fans, and even employees speak for you can also exponentially increase your brand awareness and social standing as a business. Let testimonials be your proof.

So, how do you encourage customers to generate that proof through testimonials? One good way is to incentivize reviews. Ask what prevents you from leaving reviews. Then solve those same issues in your business.

Learn below how you can collect those all-important testimonial reviews. Then check out the rest of our Long Reads content for more strategies and insights.

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How to get more reviews for your business

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