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How to Combine Loyalty and Referral Programs for Maximum Results

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Marko Zivanovic

Content Manager

Skyrocket your business growth by combining a loyalty and referral program

If you’re looking for a way to increase your sales and revenue, you should consider combining your loyalty and referral programs. This can be a very effective way to promote your products or services, build customer loyalty, and encourage repeat purchases. In this blog post, we will discuss the benefits of combining these two programs and provide tips on how to do it effectively.

What is a referral program?

A referral marketing program is a process where a customer gets an incentive to refer other people to a business. For example, referred customers may receive a discount on their purchase, while those who made the referral may receive a cash reward.

A customer referral program can be an effective form of word-of-mouth marketing, as people are likelier to listen to recommendations from friends and family they know and trust.

Most businesses implement a straightforward referral process, like providing customers with a referral code they can share with friends.

Remember that the referral program should be easy-to-understand, or customers will refuse to participate.

What is a loyalty program?

A customer loyalty program is a rewards program offered by a business to customers who frequently make purchases or check-in (for businesses with membership plans). Customers can earn loyalty points they can convert into discounts or other rewards.

When people feel rewarded for their commitment, they are more likely to remain loyal customers of the brand and recommend it to their friends. This can lead to increased sales and revenue for the business.

Businesses typically design their loyalty programs to be simple and easy to understand so customers can quickly rack up rewards.

Why should you use both loyalty and referral programs?

Loyalty and referral programs are excellent ways to increase sales and encourage customers to promote your business. However, they can also be used together for even more outstanding results.

When you combine loyalty and referral programs, you create a system where customers are rewarded for their loyalty and for referring new people to your business.

Here is the list of benefits of using both referral and loyalty programs:

  • You can increase customer loyalty: Customers enrolled in both programs are more likely to remain loyal to your brand and make repeat purchases.
  • You can boost sales and revenue: Combining these two programs can significantly increase sales and revenue.
  • You can encourage customers to promote your business: When customers have an incentive to refer new customers, they are more likely to do so. With word-of-mouth marketing, you can reach a wider audience and grow your business.
  • You can increase customer engagement: Customers who are actively participating in both programs are more engaged with your brand. This can lead to improved customer satisfaction and retention rates.

Tips for combining a referral and loyalty program

Use the same platforms

When creating a loyalty and referral program for your business, it’s important to use the same platform. Doing so will enable you to manage points and rewards more efficiently, protect yourself from fraud, and make it easier for customers to participate in both programs.

When your referral and loyalty program tools don’t communicate with each other, you can miss out on important data, which will lead to inefficiencies and errors.

In situations where loyal customers are eager to collect points and act like brand ambassadors, the last thing you want is to let them down and mess up their rewards.

Offer a variety of rewards.

Even though you’re using the same platform to manage your loyalty and referral programs, it’s necessary to offer different rewards. This will give customers more incentive to participate in both programs.

For example, you could offer loyalty points that people can redeem for discounts or free products. For referral rewards, you could offer a percentage off the product or service for each referral that becomes a paying customer.

Reward customers for promotions.

Most companies reward customers when their referrals become paying customers. However, even if you also follow this practice, it doesn’t mean you shouldn’t take advantage of your loyalty program here.

For example, you can give loyalty points to customers that share your special offers or business on social media. In this case, you are rewarding people before their referral becomes a customer, but at the same time, you are getting enormous exposure on social media.

In addition, by allowing people to earn points in multiple ways, you are making your loyalty program more engaging to participants.

This is another reason you want a referral and loyalty program under the same platform. When they are on separate platforms, it is almost impossible to track referrals and shares or it would require a lot of custom development and coding.

Introduce new customers to both programs.

Some businesses struggle to see customers engaged with their loyalty and referral programs. For that reason, it is essential to introduce your loyalty and referral program in the right way.

One of the easiest ways to see excellent engagement from the beginning is to create a welcome email that will introduce your referral and loyalty program.

What is a welcome email?

A welcome email is an email that new customers receive after making a purchase. This email should introduce customers to your brand and wish them a warm welcome.

Research shows that welcome emails have the best conversion rates, so we highly recommend that you take advantage of this high engagement and send welcome emails to introduce your loyalty and referral program.

Boost your business growth with a referral and loyalty program!

As you have seen, it is crucial to use the same platform to implement a referral and loyalty program successfully. This way, you can manage your programs more efficiently, and customers will have a better experience.

Referrizer is a solution for small businesses that provides a referral and loyalty program in one platform. In addition, you will have automated text and email marketing that you can use for your welcome emails, referral campaigns, and promotion of your loyalty program. You can start a 14-day free trial to try out the platform or schedule a personalized demo to get a tour of the system.

Marko Zivanovic

Content Manager

I use engaging words and strategic approaches to create content that converts.

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Marko Zivanovic

Content Manager

I use engaging words and strategic approaches to create content that converts.

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