Referral Program Drives Customer Acquisition, Sales for Hanna Andersson
The Hanna Andersson clothing brand began 30 years ago when Sweden-born Gun Denhart and her husband Tom, a native of Portland, Ore., settled in his hometown, had a baby boy, and christened Hanna Andersson in their garage. Initially the company reached consumers only by catalog, but over time the Hanna brand grew to include over 50 retail locations in the U.S. and an e-commerce website that serves millions of visitors.
While the simplicity of Hanna Andersson’s commitment to quality and durability remains the same as it was from the start, retail marketing has gotten remarkably complex in the decades since. To continue acquiring new customers — and to reactivate dormant ones on its list — in this new marketing landscape, Hanna Andersson chose a radically simple idea: reach them through the brand’s existing customers via referral marketing. In March 2015, this effort kicked off with a refer-a-friend program powered by Extole. Advocates share referrals with friends, who receive a 20 percent discount on their first purchase. Those advocates then earn 20 percent off toward a future purchase.
Like its clothing, Hanna Andersson built its referral campaigns on simple but solid fundamentals. It knew that to successfully acquire new customers, referrals must be easy for people to find whenever and wherever they interact with the brand, whether it’s online, via their phone or in the pages of a catalog. They must also be easy to share and use. Lastly, they have to be rewarding for customers to participate in the program.
By the time it was a month old, Hanna Andersson’s referral program had recouped its investment costs. By the end of its second month, it had acquired over 25 percent of its new customer goal for the year. Furthermore, Hanna Andersson is converting on more than 20 percent of friend clicks.
High Visibility Generates Advocacy
Hanna Andersson’s website features multiple calls to action for its referral program: in the top navigation and global footer, on the post-purchase confirmation page, and also on a dedicated landing page. All of them are mobile optimized so they’re visible on any size screen. On Hanna Andersson’s mobile site, refer-a-friend also gets its own item in the hamburger menu.
The referral program exists beyond Hanna Andersson’s website as well. It’s promoted in the company’s catalog, through Facebook posts and retargeting, on Twitter, and through dedicated email blasts. In the near future, the retailer plans to expand promotion to include prominent banners in marketing emails, inclusion in transactional emails, and product-level site placements, says Mimi Ruiz, Hanna Andersson’s director of e-commerce
Ease of Use Encourages Participation
The built-in responsivity of Extole’s platform ensures that consumers get the same simple sharing experience whether they’re on desktop or mobile. The program requires no login or registration, so there are no hurdles for customers to jump over on their way to sharing. When friends click on a referral and land on Hanna Andersson’s site, they’re automatically confirmed as having come through a referral and shown their 20 percent coupon code.
Instant Reward Fulfillment Keeps People Sharing
Once an advocate earns a reward for sharing, they immediately receive that reward by email. There’s no waiting for Hanna Andersson to reconcile its records at the end of the month. Even though fulfillment happens immediately, the retailer isn’t sacrificing customer quality. To ensure the referral program acquires only new customers, Hanna Andersson and Extole use a number of verification and customer-quality checks that happen behind the scenes during checkout.
By following through on the fundamentals, Hanna Andersson has scaled a referral marketing program that converts new customers at three times to four times the conversion rate for other channels. It’s a leading source of high-quality customers for a retailer that cares about quality above all else, and it’s poised to grow almost as fast as all those comfy kids in their Hannas.
Christopher Duskin is vice president of marketing at Extole, a referral marketing platform.