By Amy Toman Can customer loyalty bring new customers?
This question must have made you think about whether customer retention can lead to customer acquisition. Yes, it can if you center your reward marketplace with referral loyalty programs. Referral loyalty programs are a great way to incentivize existing customers to refer your business to their friends and family.
As the name suggests, a referral loyalty program rewards existing customers for referring a brand to their acquaintances. Double-sided referrals also reward new customers for doing business with a brand.
This post will discuss the different ways a referral loyalty program can boost a business’s customer retention strategy.
Why Referral Loyalty Programs Work?
When a customer has been purchasing from you for quite some time. They tend to build a certain affinity for the brand. The quality products and customer service help with repeat purchases. But there are high chances that a customer will migrate as soon as another business offers some extra benefits. The main reason is the homogeneity of the market.
Referral loyalty programs work because they capitalize on trust, provide cost-effective customer acquisition, attract high-quality leads, enhance customer satisfaction, leverage network effects, offer valuable data, and provide mutual benefits through incentives and rewards. By tapping into the natural tendency of people to share positive experiences with those they care about, businesses can achieve sustainable growth and build a loyal customer base.
A referral loyalty program is an effective way to retain existing customers while acquiring new ones without spending any money on marketing. This is how a referral loyalty program works:
- Join the referral loyalty program
- Refer the brand to a friend
- Get rewarded once the friend does business with the brand.
- The referred friend also gets rewarded as a welcome bonus or coupon.
The results are rewarding. Both existing and new customers get rewarded for their association with the brand.
Besides, there is
- High average order value
- High lifetime value
- High chances of more referrals
Now let’s talk about some effective strategies to boost the impact of a referral loyalty program.
Introduce the Referral Loyalty Program Early
A customer who has recently joined your loyalty program might find a referral loyalty program a quick avenue to earn rewards. As they are easy to join and offer instant gratification to customers, introducing them at an early stage of a customer journey can help them stay amid tight competition and raining offers. The studies have shown that customers find referral loyalty programs easier to join and get engaged instantly due to the instant benefits.
Use your Website to Endorse your Referral Loyalty Program
It’s important that your target audience is aware of your referral loyalty program. Your website is the first place your potential customers visit to check on you. Before making a purchase, customers check a business’s website to access its online standing. If you have a referral loyalty program in place, it’s best to endorse it on your website through pop-ups. It can be a great motivation for many visitors to become customers.
Email Marketing is the Masterstroke.
Every business needs a masterstroke to get quick success with a loyalty program. Email campaigns can reach a wide set of customers at a time to communicate about the referral loyalty program. You can start by segmenting the customers to identify customers who are already part of your loyalty program. Once recognized, you can pitch your referral loyalty program to them. It should be an easy target group, as these people are already aware of the benefits of loyalty programs.
The customers who aren’t yet a part of your loyalty program must be approached differently.
Ask Existing Customers to Promote your Referral Loyalty Program
Your existing customers have already tasted the benefits of loyalty programs and, hence, are the perfect spokespersons for your referral loyalty programs. They know about your reward marketplace. They can endorse it by referring to themselves or communicating about it in their circle.
Hiring an Expert is Another Great Way to Approach a Referral Loyalty Program.
Hiring a leading loyalty management solution provider like Novus Loyalty can help smooth the process. With their vast reward marketplace expertise, they can help you craft the most engaging referral loyalty programs. Also, they know how to market the referral loyalty programs for the best results.
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If you’re a business struggling to implement a referral loyalty program, you can partner with a leading loyalty management company to do the job.
