Industry Chat: Affiliates & the power of brand-to-brand recommendations
While any one individual from the general public isn’t shopping 24/7, they do shop at any point in the 24/7 cycle. Primarily thanks to our phones and the world wide web of available stores. The new connectivity between stores means individuals can purchase from more than one brand in a single shopping trip.
Concurrently, distrust has risen towards online retailers that could manufacture and ship the product from anywhere in the world. As a result, more consumers are making purchases based on a recommendation from someone they already have a relationship with.
Enter the new world of brand-to-brand recommendations!
Our expert on this issue: Adrian Vella – Tyviso
First off, Adrian, what is a brand-to-brand recommendation?
A brand-to-brand recommendation is where one brand recommends an individual to another brand. Usually, they will recommend their existing customers at the checkout stage to continue their spree with a brand of their recommendation.
Why haven’t brand-to-brand recommendations been on brand’s radar before?
They have! They just haven’t been seen as a legitimate stand-alone channel in the past. Brands have been partnering to co-brand products for years. While they aren’t passing a customer over, they clearly state their praise for the brand they are working with. The same goes for deliveries that contain advertising leaflets. You’d hope the retailer only includes leaflets from brands they believe are relevant to their audience, thus highly recommending.
Until recently, ads and social media dominated the marketing mix. But recent data/tracking changes have inspired brands to reinvest in alternative channels they can own, such as email, affiliates, and partnerships.
I see – So why are you changing how brands and customers access recommendations?
As I touched on, advertising is becoming a ‘treading water’ activity to model reliable revenue against rather than actively scaling your business. But even the reliableness of that is falling.
Talking about the promotional leaflets that came with a delivery, we saw an opportunity to use technology to grab people while they have their credit card in hand, rather than landing on their doorstep when they aren’t engaged.
The goal is to create a network where brands can give their customers access to a community of other retailers. That way, brands don’t have to pay through the nose to be seen and instead are discovered by actively shopping customers.
How does Tyviso move customers between the brands?
After someone has purchased from a brand, we show them a button to explore more offers on the Tyviso network. We then recommend other brands based on their relevance to the referring brand.
After the algorithm shows the hyper-relevant brands, every brand has a chance to be discovered. Laying brands out this way means customers can still complete non-traditional purchases journeys, and we can learn from their behaviour.
The goal with recommendations is to make the customer feel like you understand them, so we specifically ensure they don’t see products they’ve already bought and filter out direct competitors.
Are customers who have just made a purchase interested in shopping again?
This is something we’ve all been getting wrong about the purchasing cycle for years.
Brands typically let someone purchase then go no-contact for two days before asking for a review. There’s a significant amount of opportunity in that immediate post-purchase window.
Customers usually have a mental budget when shopping, and they are willing to keep spending until they hit it. But if the brand they are browsing doesn’t have anything else they are interested in, shoppers will quit their session.
We’ve learnt that we naturally bundle activities in our mind – the same way we bundle ‘errand days’ rather than dragging them through the week. The same goes for shopping. So, customers would have a better experience if it was easy to discover and purchase from multiple brands in one shopping session.
What types of products do customers purchase in the same session?
Honestly, imagine the weirdest combination you can. Then make it weirder. Just think of Aldi’s middle aisle. People go in for milk but come out with a lawnmower!
For example, we see people shopping for brownies and fitness supplements across two different brands but in the same shopping session.
Maybe they are having a treat because they are working out. Or perhaps the brownies are for a new partner they are trying to impress by going to the gym.
What kind of return on investment does brand to brand recommendations bring compared to advertising or affiliates?
With advertising and affiliates, you pay a fee upfront and then may end up paying a commission on successful purchases.
We’re trying to put the community and the retailers first, so we don’t charge retailers to set up or run Tyviso.
If someone makes a purchase, retailers pay a small fee for that. But so far, we’ve seen a minimum £6.67 return on investment per £1 spent.
You also can’t forget the exposure side. We show retailers’ brands to thousands of customers, many of whom won’t purchase via Tyviso but will remember you for the future.
Do brand-to-brand recommendations work for every kind of business?
Brand-to-brand relies more on natural shopping behaviours, so there will be more seasonality. E.g. in the summer, you’ll see more customers shopping with summer-themed brands, so they will do much of the referring and receiving.
Typically automated brand to brand recommendations isn’t geared for anything with a high consideration purchasing journey, such as financial products or travel experiences.
But which sectors fly on brand to brand recommendations? That would be anything seen as a frequent low-medium level purchase, such as food, beauty, fashion.
Typically, we see AOVs on under £200 performing best, but there are always those categories that are exceptions to the rule.
But really, brand to brand recommendations can work for anyone as the more referring brands we see, the more customers there will be for brands to receive.
I’d recommend brands add it to their mix and begin experimenting, as it’s one of the few ‘no risk, all reward’ options out there.
Tyviso’s brand partners recommend your brand to their customers. With a record setup time of 16 seconds, opening up an entirely new and incremental source of customers whilst rewarding your own has never been easier. They work on a cost-per-order basis, meaning you only pay for results.