Referrals can turn shoppers into an effective acquisition channel, but when combined with loyalty, it can turn shoppers into organic brand ambassadors and lifelong company lovers. Effective loyalty programs give consumers a reason to return (VIP experiences, benefits, discounts) and have become an increasingly popular strategy as brands double down on retention efforts.
While loyalty has more momentum than a referral program alone, the benefits of launching the solutions together make it all worthwhile.
Loyalty and referrals make consumers loyal advocates, not just one-time buyers. Unlike a stand-alone referral tool, loyalty and referral programs help you achieve your various business objectives. With these two solutions, companies can increase customer lifetime value, average order value, repeat purchase rate and reduce churn while building a community around their brand.
Here’s why the two solutions make a perfect match.
Achieves greater overall ROI impact
Loyalty and referral programs give shoppers a reason to return and spend more with your brand. Loyal members receive personalized experiences, experiential benefits, early access to products and sales, and a community of like-minded shoppers. A stand-alone referral program does not reshape the consumer shopping experience in the same way.
And, retention efforts pay off in dividends.
Accenture
reports that customers who belong to loyalty programs generate 12% to 18% more incremental revenue growth per year than those who do not participate.
Achieve specific business objectives
Brands can tailor loyalty and referral programs to achieve their specific business objectives, ROI-oriented or otherwise. For example, whether your company needs to improve customer retention rates or decrease time between purchases, a strategic loyalty and referral program can help you achieve these goals through program structure, campaigns and benefits.
For example:
- Targeted spending campaigns increase AOV
- Punch card campaigns boost repeat purchase rates
- Rewards for social monitoring builds community
- Point donation campaigns promote brand values and drive brand affinity.
Catalyzes retention and acquisition efforts
Loyalty and referral programs provide a multi-faceted approach to retention and acquisition. Referral-only programs offer a strategic channel for satisfied customers to communicate with friends and family, but how do you keep referred buyers coming back? A loyalty program offers referred shoppers more than a one-time discount code to give you back your business. In addition, loyalty rewards can be built and customized, making them more of an incentive for shoppers than just non-accumulative referral codes.
Together, loyalty and referral solutions create a loyal customer pipeline, not just an acquisition strategy.
Makes the playing field for loyalty and referrals
Launching a loyalty and referral program requires more effort and company involvement than a stand-alone referral program, but there are effective ways to streamline the process.
When talking to your teams, emphasize the ability of your loyalty and referral program to build long-term relationships between your brand and your customers. As you begin the conversation, focus on your business’ critical loyalty success metrics. Sets expectations that the loyalty program will improve both quantitative and qualitative key performance indicators throughout the organization.
Qualitative KPIs include:
- Increased sales
- Reduced turnover
- Increasing the size of carts
- Increased repeat sales
- Increased commitment
Quantitative KPIs include:
- Increased customer satisfaction
- Increased brand awareness
- Competitive advantage
You will also need to engage key stakeholders and establish implementation timelines as the program launch progresses. Effective loyalty and referral programs adapt to consumer, market and company changes to continually drive retention, maximize revenue and align with your business objectives.
Offers shoppers more than just a single discount code
Retention is the new acquisition, and shoppers want discount coupons of more than 5% off. Launching loyalty and referral programs together maximizes the longevity of your brand. If you need our services, contact Several.