Photo via Emily from our Lee jeans campaign.

Customer Acquisition Costs Will Continue to Rise as Competition Increases Online

By now, most people know that COVID-19 lockdowns spurred an uptick in eCommerce shopping in 2020. People who were already comfortable buying from internet sites were joined by 150 million newcomers who made their first online purchases in March of that year.[1] Shopify reported a 71% increase in new stores on its platform in Q2 2020 compared to Q1, and that trend continued into Q3.[2]

As 2021 comes to a close and the worldwide pandemic winds down, people are still reluctant to return to brick-and-mortar shopping. Nearly 80% of consumers have admitted that they’ll continue to shop online in the coming months, with much fewer saying they plan to return to regular in-store shopping.[2] This year, eCommerce sales are expected to grow by 18%, and by 2025, eCommerce penetration is projected to double its share of retail sales compared to 2019.[3] 

But the growth of eCommerce and an increase in online competition has caused digital ad prices to soar. And there’s more trouble ahead for those who rely on digital advertising to solicit sales. Apple’s new privacy policy has made it much more difficult to target consumers with ads, and tracking will become even more complicated as Google phases out cookies in 2023.

One possible solution is to rely more on word-of-mouth marketing and less on advertising. Recent studies have shown that consumers rank advertising as the least trusted source of information about products and services,[4] while personal recommendations from friends and family rank highest.[4] But a word-of-mouth effort to encourage ordinary consumers to share your brand with people they know is difficult to coordinate, and content virality is extremely unpredictable.

However, brand managers can get the upper hand by investing in influencer marketing and brand ambassador programs. Even though friends and family are considered the most trusted sources for making purchasing decisions, consumers also rely on social media influencers and brand ambassadors for product advice. An eCommerce brand that finds it difficult to compete with online retail giants for keywords on Google and popular social media ad platforms should consider allocating more of their digital marketing budget to influencer marketing and less of it to ads.

What’s the Difference Between Influencers and Brand Ambassadors?

Although there’s a tendency to use the terms “influencer” and “brand ambassador” interchangeably, there’s a distinction that can help clarify the difference: brand ambassadors are long-term partners that work exclusively with one brand in a particular industry, while influencers generally team with brands for limited partnerships. In both cases, social media users influence purchases by engaging with followers and coming across as authentic and trustworthy.

Just like influencers, brand ambassadors can be celebrities or regular people. Depending on the type of brand, some companies will routinely use street teams of ordinary citizens or student ambassadors for offline field marketing campaigns on college campuses. For online efforts, brands may discover potential ambassadors by using social listening tools to find out who is frequently talking about their products online. But some ambassadors are traditional social media influencers that form a lasting relationship with a brand. These ambassadors become assets that the brand can depend on for multiple online and offline projects.

Whether you refer to these partners as brand ambassadors or influencers will depend on how much you want to integrate them into your long-term marketing strategy.

How to Choose a Brand Ambassador

The key to selecting a successful brand ambassador is to find someone who truly loves your product or service, is influential in his or her online community, and agrees to be a brand advocate for your products. Choose a brand representative who can talk about your product or service with authenticity and is trusted enough within their specific niche that loyal followers are swayed by their recommendations.

Because you’ll be choosing a long-term partner, ensure that the ambassador aligns with your brand’s identity and that their social media followers mirror your target customers. Spend enough time reading posts and reviewing content to feel confident that you’ve chosen a good match.

How Can an Ambassador Program Help You Meet Your eCommerce Goals?

Once you’ve committed to using brand ambassadors, how can you employ these unique influencers to drive sales? The following tactics will make it easy for consumers to land on specific pages of your site, will simplify campaign tracking, and should motivate your brand ambassadors to work harder for you.

Unique URLs + Referral Marketing

Each brand ambassador should have access to a unique URL code. When social media followers use that code that links to your product page, the ambassador will get credit if the site visitor makes a purchase.

But make the process more profitable for ambassadors by tying referral incentives to their income. Set up a referral marketing program where ambassadors can earn bonuses if the people they send to your site make purchases. You can also drive referrals by setting up a system where ambassadors who drive the most sales earn higher-value rewards.

Ambassador-Branded Discount Codes

Social media influencers and brand ambassadors work for your brand, but personal branding also motivates them, as they’re eager to grow their own accounts. When you allow your ambassadors to create unique discount codes that incorporate their names or social media handles, they’ll likely earn new followers when their current fans spread the word on social media by tagging their friends. 

A branded discount code reinforces name recognition, and because the ambassador’s name is tied to the promotion, your brand advocate will be motivated to come up with creative ways for promoting the brand and increasing engagement on their pages.

Use Ambassadors to Create Buzz Around a Product Launch 

A devoted brand advocate with an engaged social media audience will be excited to share news about your new product and motivated to create content that entertains, informs, and increases brand awareness. This kind of authentic buzz will surely benefit your brand. 

But ambassadors have something to gain as well, and it’s not just monetary compensation for acting as a brand representative. Ambassadors can gain status and credibility when brands trust them to launch new initiatives and count on them to lead marketing efforts.

Consumer Attitudes and Changes in Tracking Should Lead Marketers to Invest More Heavily in Influencer Marketing

Nearly 90% of marketers say influencer marketing provides the same or better ROI than other marketing channels.[5] With increasing eCommerce competition impacting digital ad prices – and surveys that show that consumers don’t trust advertising – it’s not surprising that brand managers are looking for other ways to increase brand awareness and boost sales.

And as consumers opt out of tracking and cookies go away, it’s going to get more difficult to reach your target audience using advertising. Brands that develop long-term partnerships with popular and credible ambassadors may find that investing in influencer marketing can do more to drive online sales and improve ROI than digital advertising on Google or social marketing platforms.

Sources:

[1]https://www.shopify.com/enterprise/the-future-of-ecommerce/omnichannel

[2]https://cdn.shopify.com/static/future-of-commerce/Shopify%20Future%20of%20Commerce%202021.pdf

[3]https://www.emarketer.com/content/us-ecommerce-forecast-2021

[4]https://www.marketingcharts.com/charts/trust-in-brand-and-service-information-sources/attachment/kantar-trust-brand-svc-info-sources-jun2020

[5]https://www.bigcommerce.com/blog/influencer-marketing-statistics/#10-most-important-influencer-marketing-statistics-for-2020