Referrals can turn shoppers into an effective acquisition pipeline, but when paired with Loyalty, you can turn shoppers into organic brand ambassadors and life-long brand lovers. Effective loyalty programs give consumers a reason to return — VIP experiences, perks, discounts — and have become an increasingly popular strategy as brands double down on retention efforts.
While loyalty does have more of a lift than a referrals program alone, the benefits of launching the solutions in tandem make it all worthwhile.
Loyalty & referrals make consumers loyal advocates, not just one-time buyers
Unlike a standalone referrals tool, loyalty and referrals programs help accomplish your distinct business objectives. With these two solutions, businesses can increase customer lifetime value, average order value, repeat purchase rate, and reduce churn, while also creating a community around their brand.
Here’s why the two solutions make the perfect pair.
Achieve a greater overall ROI impact
Loyalty and referrals programs give shoppers a reason to come back and spend more with your brand. Loyalty members receive personalized experiences, experiential perks, early access to products and sales, and a community of like-minded shoppers. A standalone referral program doesn’t reshape consumers’ shopping experience in the same way.
And, retention efforts pay off in dividends. Accenture reports that customers who belong to loyalty programs generate between 12 to 18% more incremental revenue growth per year than those who do not participate. Further, Forrester cites that loyalty rewards program members in the U.S. and Canada spend $99 more with traditional and online retailers on average than non-members within a typical three-month period.
Ministry of Supply, a science-backed clothing brand, wanted to create a referral program to engage new shoppers. But, without establishing more profound relationships with customers and rewarding them for their commitment to the brand, few customers made referrals, even if they liked the brand’s products and services. “We weren’t wild about the referrals program we had,” says Weisman. “We needed a solution that could help us build the brand love and advocacy that reflects our exceptional customer service.”
Ministry of Supply partnered with Yotpo to create a loyalty and referrals program that set the stage for stronger customer advocacy. Their tiered program includes service-based benefits like expedited shipping and direct concierge access that drive more frequent purchases. The result? Their most engaged customers also became their most valuable. And, loyalty members receive additional rewards for making referrals, effectively growing the community and ultimately driving higher revenue.
The brand’s revenue has doubled in the first six months since launching Yotpo Loyalty and Referrals. And, over half (52%) of referrals now come from VIP members who have spent over $300. So, for Ministry of Supply, two solutions are clearly better than one.
Reach specific business goals
Brands can tailor loyalty and referrals programs to achieve their specific business goals, ROI-oriented or otherwise. For example, whether your business needs to improve customer retention rates or decrease the time between purchases, a strategic loyalty and referrals program can help you achieve these goals through program structure, campaigns, and perks.
For example:
- Targeted goal spend campaigns increase AOV
- Punch card campaigns boost repeat purchase rates
- Rewarding for social follows builds community
- Point donation campaigns promote brand values and drive brand affinity
Catalyze retention and acquisition efforts
Loyalty and referrals programs provide a multifaceted approach to retention and acquisition. Referrals-only programs offer a strategic channel for happy customers to reach out to friends and family, but how do you keep referred shoppers coming back? A loyalty program gives referred shoppers more than a one-time discount code to return your business. Additionally, loyalty rewards are buildable and personalized, making them more of an incentive to shoppers than un-stackable referrals codes alone.
Together, loyalty and referrals solutions create a loyal customer pipeline, not just an acquisition strategy.
Making the pitch for loyalty & referrals
Launching a loyalty and referrals program takes more effort and company involvement than a standalone referrals program, but there are effective ways to streamline the process.
When talking to your teams, stress your loyalty and referrals program’s capability to build long-term relationships between your brand and your customers. As you begin the conversation, focus on your business’s critical loyalty success metrics. Set expectations that the loyalty program will improve both quantitative and qualitative key performance indicators across the organization.
Qualitative KPIs include:
- Increased sales
- Reduced churn
- Increased cart sizes
- Increased repeat sales
- Increased engagement
Quantitative KPIs include:
- Increased customer satisfaction
- Stronger brand awareness
- Competitive edge
You’ll also need to involve key stakeholders and set implementation timelines as the program launch proceeds. Effective loyalty and referrals programs adapt with consumer, market, and company shifts to continuously drive retention, maximize revenue, and align with your business goals.
Give shoppers more than a one-time discount code
Retention is the new acquisition, and shoppers want more than $10 off coupons. Launching loyalty and referrals programs together maximize your brand’s longevity.
Yotpo Loyalty & Referrals empowers brands to set themselves up for success with tailored rewards campaigns, VIP programs, powerful segmentation, and marketing automation integrations. Ready to start building your program? Request a demo.
