Are you aware that a whopping 83% of satisfied customers are willing to refer their friends and family to a business, but only 29% do?

That adds up to 54% of customers that don’t make referrals but have stated they would be willing to. So why the huge gap and how can we tap into more than half of our happy customers to turn them into our advocates through a loyalty program that uses gamification and social media?

So here are the reasons and solutions to losing 54% of your business, which is sitting right at your fingertips. Stop wasting your time and money by making these classic loyalty and referral program mistakes!

 

  1.    Lack of a formal loyalty program

This is called the “awkward referral program”, which is the casual conversation between you and your clients trying to ask them for a referral. This real problem with this besides the “awkwardness” is that people cannot possibly remember everyone in their network during a short conversation. Maybe you’ll strike gold and your client says their friend is currently looking for your product or service but the probabilities of this are low, more likely is they return home and after some days they recall or run into someone looking for your product or service. At this point you are relying on this client’s memory of your business name and information as well as their referral’s memory to reach out to you.

A formal loyalty program avoids all of this by staying on the top of the client’s mind and providing an organized and effective platform to submit referrals, allowing your business to be responsible for reaching out to the referral, not the other way around.

 

  1.    Inability to engage the customer

This is a very common problem with referral or loyalty programs. The classic transactional based loyalty program is the perfect example, the “Buy 10 get 1 free”, which doesn’t make the client feel special or engaged. It makes them work hard for a discount and can only possibly create loyalty to the best deal, not your business. Transactional based loyalty programs also do not help to increase advocacy through referrals. How can you expect someone to bring you new business if they have to wait 6 months to even redeem 1 free item or discount?

Loyalty platforms that use elements of gamification and social media to engage customers are the clear future of customer advocacy and referrals. Give your clients an enjoyable, fun and unique experience that incentivizes them for referrals and engagement.

 

  1.    No communication of loyalty program or benefits

People are busier than ever trying maintain their own balance between work, friends, family, health and so on. If you don’t communicate your loyalty program clearly and simply while describing the benefits, chances are they’ll never even think of providing a referral past the sale. They go on in the hustle and bustle of everyday life, never even remembering their positive experience with your business enough to make a call or message to a friend to refer your company.

At the sale, whether in a store or online, make your referral and loyalty program front and center while making it crystal clear. Leave no room for confusion but communicating how it works and why they should care. Follow up after the sale and send Facebook notifications, Email and social media posts to grab their attention and stay on top of their minds.

 

  1.    Lack of a positive experience

People need to have a positive experience with a brand to even consider becoming a loyal advocator. As mentioned previously, the old transactional based loyalty platforms are not effective in creating true loyalty since they make customers work hard (e.g. buy 10 or spend $100) in order to obtain some discount. As stated by Mark Taylor on eMarketer, “Consumers will not trade in today’s experience for tomorrow’s discount”.

Make your customer’s experience unique by sending them personalized messages such as birthday points or an email thanking them for providing a referral along with rewards to your loyalty platform. Tag them on social media and say something nice such as “We are so grateful for your loyalty so here is your shout out, you are AWESOME!”. Everyone has different motivators but a positive experience and social influence are two motivators that many people share, so take a couple seconds to send a quick post, email or notification that makes your client feel valued and special!

 

In summary, to stop losing 54% of your business you need to:

  1. Implement a formal loyalty platform
  2. Engage clients through gamification and social media
  3. Communicate your loyalty and referral program clearly and consistently
  4. Reward your customers by making them feel special and valued

Simple, isn’t it? When it comes increasing customer loyalty, engagement and advocacy it should be simple enough for the user to be able to participate and for your business to be able to execute consistently. If you are interested in learning more set up a call with our team today, or check out more information on customer loyalty!  

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Toni Arco
CEO & Head of Growth
Toni, our CEO, is passionate about business growth through technology. He has founded 2 technology companies and spent over 6 years as CTO of digital marketing companies. He spends his time discovering the newest technology and applying trends to our own product and processes. He mentors tech start-ups and teaches courses on growth hacking to share his knowledge.

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