The Most Powerful Customer Acquisition Tool
Acquisition strategies vary greatly from business to business, in particular across industries. However, there is one customer acquisition tool that essentially every business can use to their advantage. It’s also one of the most effective tactics with very high ROI when used well. Can you guess which tool we’re talking about? Keep reading to find out.
Word of mouth influences purchase decisions of 74% of consumers.
That leads to an incredible amount of sales being owed to this type of marketing. Now of course, word of mouth is usually an organic strategy. However, it can be encouraged with a referral program.
Referral programs are an incredible way to boost customer acquisition and they are a great companion to a loyalty program. According to Nielsen, recommendations from friends and family have been the number one trusted advertising format for years. Additionally, consumer opinions posted online are the third most trusted source, just below branded websites. What does this mean? Personal recommendations, be it from the inner circle or from strangers, is a gold mine for your customer acquisition strategy.
It’s likely that you already have a system in place to generate product or brand reviews online. However, have you thought about integrating a formal referral system into your loyalty program?
Referred customers have 16% higher lifetime value than non-referred customers.
Reviews are great, referrals even better. Studies have shown that customers acquired through referral programs have higher customer lifetime value and lower churn rate. If done well, it’s a way to turn your brand’s social capital into an economic capital. Even a very little effort goes a long way. It turns out that the likelihood of a customer referring a friend grows no matter the size of the reward. Having a formal referral program can therefore boost your sales. What’s more, referred customers are then generally more likely to refer more people, causing a domino effect.
Referrals are very popular and important not only in consumer industries but also in B2B. 78% of marketers agree that leads produced by referrals are good or excellent. With all these facts considered, incentivising your referrals should be a no brainer. Now of course your business must have an effective strategy in place to enable and be able to track and analyse the referral program. Some of the popular methods used are unique customer codes, sharing via social media or email.
As mentioned, referred customers are much more likely to become loyal and refer your business further. Consequently, incorporating a referral program into your loyalty program is a logical step. Our referral module offers an easy and flexible way to incentivise customer referrals with as little friction as possible. What’s more, it allows your business to accurately track the complete referral lifecycle.
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Kristyna is our Marketing Manager. She helps White Label Loyalty reach the right businesses in need of a loyalty program and helps our clients' programs reach their full potential. She loves sharing her varied experience in marketing and loyalty by writing helpful resources on the blog from time to time for all loyalty novices and aficionados alike.