Top Reasons Why Referral Marketing Should Be Part of Your Loyalty Program

Let’s accept one unabashed truth: people trust recommendations from their friends and family more than they trust advertisements. Your potential customers are flooded with ads and marketing. They would probably not trust an email they receive from a business because there’s no reference point.  

That’s where referral marketing comes into play.

Customers trust a new product or service when they get a recommendation from their loved ones. No other marketing tool can build instant credibility like referral marketing. If you think this is a one-way street, you are mistaken. While a few customers recommend your products or services without expecting any incentive, others might need some motivation. That’s where your loyalty program must incentivize them with a referral marketing initiative.

This blog will discuss what referral marketing is and why it must be a part of your loyalty rewards management system. 

What is Referral Marketing?  

When a business encourages a customer to recommend their services, products, and experiences to their friends, referral marketing comes into play. It is an excellent strategy that incentivizes and rewards customers in exchange for successful referrals.

Here’s a scenario.

A company may offer a discount or gift card to a customer who made a successful referral and helped the company acquire a new customer.

Referral marketing is the most economical program to retain old customers and acquire new ones. And that’s why you must feature it in your loyalty program management program.

Why should referral marketing be a part of your loyalty rewards management system?  

A business that highlights and appreciates its most loyal customers pitches itself for perpetual success. Here are the top reasons why you should include referral marketing in your loyalty reward management system.

It expands your network.

Referral programs are an excellent way to introduce your brand to new audiences. As new customers already have a positive opinion of your business, they tend to have a higher lifetime value than customers who were acquired through other means. Besides, the old customers who get rewarded for recommending your business tend to make more purchases and choose your brand over your competitors.

It saves money.

With little to no upfront cost, referral marketing serves two purposes. If you have a passionate customer base, a strategic plan, and in-place loyalty program management software, you are going to save big bucks as a business. When your existing customers turn into brand advocates, you can cut down on your marketing budget. The word-of-mouth promotion will reduce the cost of customer acquisition.

It generates a greater ROI.  

As discussed, there are little to no upfront costs associated with launching a referral marketing program. With that and a reduced CAC, you can save more. If you have invested in the best referral marketing software, you can effectively manage points and other referral marketing rewards.

It creates a competitive edge.

Referral marketing helps a business reward loyal customers, which leads to repeat business and increased LTV. A customer who feels valued by a business will not crumble in front of lucrative offers and discounts from competitors. By rewarding your existing customers for bringing in new ones, you can craft a competitive edge and sustain yourself better in a dynamic market.

Build a Robust Loyalty Program Management Software with Novus Loyalty 

Technology is the wave that every new-age business is riding to win tech-savvy customers. As a business, you can use referral marketing and double-sided referral programs to engage new and old customers. If you are looking for reliable loyalty program management software, Novus Loyalty can help you streamline your referral marketing and other reward initiatives.