How to Implement a Referral Program and Why Are They Important?

Referral programs are the best way to reward happy customers for spreading the word.

For any business with an eCommerce presence, referral programs are a cost-effective strategy to acquire new customers.    Although word-of-mouth marketing is as old as marketing itself, it’s now easier than ever to connect your loyal customers to their friends and family network through a referral landing page on your website. Why are referral programs important?

Referral programs provide a real-time assessment of your company’s customer satisfaction and net promoter score (NPS). NPS measures customer loyalty and is based on the simple question of how likely customers are to recommend this product/service to a friend or family member.

As George Silverman said, “A happy and satisfied client has the power to influence a million doubters.” Here are some of the greatest benefits of this strategy:

ATTRACT NEW CLIENTS

Consumer polls indicate that recommendations and reviews are trusted more than conventional advertisements. Meanwhile, people are four times more likely to buy when referred by a friend.

Implementing a referral program enables the best ambassadors of your brand to help you promote and acquire new customers.  Inherently, prospective customers trust friends and family more than what you are telling them to do. Ambassadors give your brand authority without you having to spend marketing dollars to convince/convert a customer.

REWARD LOYALTY

Incentivize any success criteria you like for both referrers and referees, rewarding your most loyal customers with any point system, currency, gift, or membership benefit.

GREAT ROI

While discounts and gifts will cost your company little, referral marketing is a cost-effective way to advertise, compared to other modes, such as traditional online ads, to grow your loyal customer base. It will have a better ROI than existing campaigns because you will get high-quality leads and it is low-cost to implement.

Other benefits of having a referral program with bLoyal include improving customer retention and increasing brand awareness and reputation by increasing your outreach and using your customers as your company´s main advocates. The most amazing thing about this process is that by increasing the number of referred customers in your database, your average Customer Lifetime Value can grow up to +25%.

The great thing about implementing your referral program with bLoyal is that you will gain actionable insights into your customers across channels with our 360-customer profile or Single Master Customer Record, which allows you to see all customer interactions in one place.

How to Implement a Referral Program With bLoyal

Once you have connected your eCommerce and POS system to bLoyal, you will need to plan and develop a call to action on your website where customers can learn about the benefits of your referral program and join.

When choosing an incentive for both the referrer and referee, you may need to test multiple avenues. That is why, at bLoyal, we support the following discount options as incentive options.

You are good to go as long as your referrer and referee rewards (acquisition cost) are less than your customer’s annual spend.

Once you have established how you will incentivize your customers to become your ambassadors and know where and how they will be able to join your program, it is time to develop your marketing collateral. You can launch text, social media, and email marketing campaigns to drive traffic and communicate the rewards of your referral program.

After launching, it is very important to monitor and analyze your referral data. This way, you will know if your strategy is a success or if you need to make some tweaks.

bLoyal enables you to do all of the following in a customizable format.  Schedule a demo to learn more about implementing a program and increasing revenue today…

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