The Importance of Loyalty Programs and Referrals

November 23, 2017


Growing a business is a lot of hard work. Generating that consumer base where marketing strategies and word of mouth really kick in can take a lot of time and you well know.

BBB serving Mainland BC has been hard at work lately developing a new downloadable app that is designed to make it easy for consumers to find the kind of service providers they need. Not only that, the new app has built-in mechanisms that allow consumers to earn points and rewards for using participating BBB Accredited Businesses and referring them to friends and family. BBB Connect was launched in November 2017 and is already gaining steam for BBB Accredited Businesses and their clients.

Just how important are loyalty and referral programs? Ask anyone in business and they’ll tell you it’s a critical component of growing your brand. Here’s why:

It Costs Less

In the business community, it’s pretty common knowledge that it costs more to get a new client than it does to retain one. While it’s not a perfect science, it’s believed that it can cost between 4 and 10 times more for a company to get that new customer as opposed to keeping one. That’s a big spend and creating loyalty and referral programs where consumers can see and feel the added value can be extremely cost-effective.

Drives New Traffic

Not only do they keep current customers, loyalty programs can bring new consumers to you and drive traffic to your website. You can also leverage your social media platforms to engage your audience and push your loyalty and referral efforts in those spaces. You need these types of strategies because the best loyalty and referral campaign is useless if no one knows about it. Campaigns also need to be a fun, interactive, and easy to use. BBB Connect, for example, is just that...not that we’re tooting our own horn.


Word-of-mouth is the best referral program money can’t buy. Customers who are referred to a brand from someone they know are 400% more likely to buy (Neilsen), will spend more and develop their own brand loyalty. Why? Trust, people trust their friends. Plus, those referred to your brand will actively refer you to even more potential clients. He tells two friends, they each tell two friends...and so on! What’s the best way to generate word-of-mouth? Simple: Be awesome. Not just with the product or service, but in how it’s delivered. If the consumer feels heard and looked after they are far more likely to recommend you to their tribe. Referred customers are also 20% less likely to choose another brand if something should shift in the market. Keep in mind, nearly 75% of consumers use word-of-mouth as a key influencer in their decision process.

Reviews are a Type of Referral

You can also put a link in your email signature that prompts customers to write a review about their experience. The reader may not know your customer personally, but reviews have become vitally important before people spend money. You may say, "But reviews are not personal referrals!" Correct, but studies have shown people trust reviews almost as much. Call it an non-personal referral.

Consumer Gets Something

There has to be something in it for them. Consumers won’t necessarily just start shouting your name from the mountaintops. Providing incentives through your referral program is key. Gift cards and discounts for referring new clients are an easy way to get the ball rolling. It creates value for everyone involved. Past clients get a discount for next time around, future clients get a sense of trust, and you get more business.