You’ve probably heard the term “white label”, but do you know where it comes from?
The phrase originates from the days of vinyl records—before records were publicly released, before they even had cover art designed, record companies would send out promotional copies to radio DJs in white sleeves. That way companies could gauge interest and see the reaction before they went ahead with full manufacturing.
Now, white labeling applies more broadly to products that are produced by one manufacturer, but labeled with another brand’s trade dress. This ranges from generic packaged goods like the ones under the “Kirkland Signature” label at Costco, to private label credit cards from department stores like Macy’s and other retailers, to technology solutions like software and mobile apps.
What are the benefits of white labeling? There are several:
- You can deliver a relevant product or service without worrying about using resources internally, taking advantage of expert knowledge that you simply wouldn’t have access to otherwise.
- Your logo remains at the forefront, so your customers remain loyal to your brand and yours alone. According to a 2017 CMO survey, over 11% of most businesses’ total revenue is being spent on marketing—so make sure that cost is going towards just promoting your brand.
- You can scale more quickly by adopting a white label strategy to diversify your product offering. Instead of building everything yourself, you can delegate different providers to build multiple new offerings at once.
In the financing space, white labeling has even more benefits—which is why Bread offers a suite of white labeling features. A strong white-labeled financing offering can help lift conversions and maximize both sales and cart size by ensuring consumer confidence and highlighting your brand. At Bread, brands that have switched to our white-labeled financing solution have seen 5X the sales and a 172% increase in year-over-year revenue from their previous partners.
Taking a White Label Approach
There are three benefits to white labeling your financing that can have very positive outcomes for your business and your brand:
- Maintain Brand Visibility: A white-labeled financing product means customers are always dealing directly your branded experience when they shop and buy—it’s never interrupted by someone else’s logo or brand identity. This ensures you’re getting the maximum amount of awareness while guaranteeing your customers’ attention isn’t divided by competing messages or experiences—maintaining a frictionless user experience from prequalification through checkout. Think about it this way: If your company uses a white-labeled mobile app, the app developer’s logo isn’t advertised more prominently than your own, if at all. Why should it be different for your financing solution?
- Strengthen Customer Loyalty: When a customer checks out using a branded financing solution, they’re building a relationship with that financing provider, not your brand. Your customers see the financing solution as the one enabling their purchase. White labeling means your customers feel like your brand is the one financing their order—building a deeper bond with you in the process. The better their buying experience, the more loyal they’ll be.
- Increase Conversions: Merchants that use Bread’s white-labeled solution make more sales and drive larger orders with a seamless shopping experience. After switching to Bread, The Original ScrapBox saw 34% higher AOV than their previous non white-labeled partner. Bread makes it easier to acquire larger sales, meaning that your marketing dollars go farther and yield better results. As Eragem’s co-founder Michael Magnotti told us: “With Bread, we have higher sales that we wouldn’t have captured with our previous provider, and the cost of capturing those sales has gone down in the process.” This led to a 172% increase in year-over-year revenue since adopting a personalized, white-labeled approach.
Build Up Your Brand
A strong brand can help you differentiate yourself from the competition, and doing so is becoming even more of an imperative. A recent report by PipeCandy found that there are over one million ecommerce companies operating in the United States today. And having a strong brand will be even more important for the next generation of consumers. More than 67% of Gen Zers and Millennials said in a recent survey that name brands are what they buy when they want assurance a product will meet their standards, and 60% are often or always loyal to the brands they choose—however they are more discerning are only loyal to smaller cadre of hand-picked brands. So how do you become one of the brands Millennials form a bond with? Here are some suggestions:
- Focus on the customer experience. According to a study by Salesforce, more than 80 percent of consumers prioritize experience just as highly as products or services. Every dollar you spend on bettering your CX can produce 3X the return, at least according to a survey sponsored by Avanade and Sitecore.
- Connect with consumer values. Customers increasingly seek out products that align with their lifestyle and personal beliefs. From sustainable clothing to organic food and all-natural skincare products, what consumers buy doesn’t just fulfill a need, it tells a story. For example, 72% of Millennials and Gen Zers will pay more for products from brands they trust, 70% for products with health and wellness benefits, and 69% for fresh, natural ingredients.
- Prioritize authenticity. For many of today’s buyers, authenticity is a key concern. 43% of Millennials rank authenticity over content in the media they consume, and need to trust a company before they even bother reading the content that they produce. Ultimately, modern shoppers connect best with brands that act human and genuine, and don’t look to dazzle or mislead them.
Advertise Your Brand, Not Someone Else’s
Most financing solutions will include their logo on your product detail page, checkout screen, financing page, and elsewhere. It might seem harmless: Maybe customers are already familiar with your financing partner and trust them? However, adding their branding to your site has a big benefit for them, while likely very little upside for you.
It’s only natural that some companies look to build brand awareness while saving on their own marketing costs. The average cost per acquisition in ecommerce is $45.27 via search and $65.80 via display ads, and those numbers are only going up. A survey of over 1,000 brands found that Customer Acquisition Costs have risen by over 50% over the last five years—and that trend doesn’t look to be changing anytime soon. The bottom line: you’re already paying a lot for customer acquisition; that spend should be focused on promoting your brand to the fullest extent, not diluted by someone else’s.
Your brand strength and awareness are important. Don’t undermine them by adding more logos and a dissonant experience to your buying process. To learn more about Bread and our white-labeling features, you can find the answers to all your questions here.