Loyalty & Referral Marketing White Paper

Loyalty and Referral Marketing

Loyalty & Referral Marketing suits all kinds of industries and professions and has done so for hundreds of years. This said there is a huge difference in the implementation strategy employed by say, a professional firm and a restaurant.  
The Webo objective is to accelerate growth for one type of client with one customised solution.
We coach strategic marketing with the aid of our tried and tested frameworks customised to suit specific needs. Read on to fully understand the benefits of Loyalty and Referral Marketing.  
Alan Mackenzie
B.Acc. B.Com. (Hons) B.D.P, Dip. P.A., CA (SA) 
CEO Webo Diigital; One of Seven Webo Divisions
Loyalty and Referral Marketing White Paper
Set out below is an in-depth review of loyalty and referral marketing that covers how the Webo LPM package augments and enhances implementation through automation software. The impact of referral marketing integrated with social media sharing has the potential to generate a significant shift in digital marketing trends. You can do it the easy way with our software or you can do it manually. The choice is yours. Read on for the facts and credible opinions on Loyalty and Referral marketing. This 10 minute read will give you insight on the fact that digital marketing is driven by possibility and not by historical trends.
What is Referral Marketing?
“Referral marketing is a structured and systematic process to maximize word-of-mouth potential,” according to Wikipedia. “Referral marketing does this by encouraging, informing, promoting and rewarding customers and contacts to think and talk as much as possible about their supplier, their company, product and service, and the value and benefit the supplier brings to them and people they know. Referral marketing takes word-of-mouth from the spontaneous situation to one where maximum referrals are generated.”
The Webo SaaS (Software as a Service)  Package
The Webo Loyalty Programme Marketing (LPM) package includes a loyalty, referral and digital marketing toolset. It is hosted on the Webo servers in the USA with 3rd party encryption, 24/7 malware monitoring, cloud proxy firewalls and daily enterprise backups. Clients subscribe to a sitebuilding software service and benefit from the above protection and support while enjoying dedicated internet access at their own URL and at a Webo URL. It is like having a shop in a mall where there is passing traffic.
We will firstly explore the benefits of referral marketing so that you can determine if Loyalty and Referral marketing is for you. Once done, we will explore the unique benefits that the Webo LPM (Loyalty & referral Programme Marketing) software solution offers.
Before you can enjoy the many benefits of a referral program, you need delighted customers. Satisfied customers are the key to loyalty and referral marketing; without this, your programme will not be effective in establishing brand loyalty, engagement and customer growth. It's simple, happy customers are loyal and are likely to make referrals but unhappy customers do not.
Referral marketing is a user-centric, strategy that enables satisfied customers to introduce the benefits of your products and services to their friends. The effect of referrals is that they will accelerate your growth and turnover plus they increase customer retention and loyalty. The focus of a SEM (Search Engine Marketing) strategy shifts from SEO and PPC to trusted recommendations from friends.
The power of Referral Marketing to grow a customer base is second to none. Ask around and you will discover that structured referral marketing strategies are rare and that few have taken the easy way to grow their businesses by automating their referral programmes.
"Testimonials are nearly as good as money in the bank, but referrals really are money in the bank."
— Jay Conrad Levinson (Guerrilla Marketing, 4th edition: Easy and Inexpensive Strategies for Making Big Profits from Your SmallBusiness)   
User Experiences
Suppliers process inputs for outputs by following processes (the what) and systems (the when). During the production or supply of goods or services the process is a controllable sequence of production steps. When supplied to a user they will have an impact and influence an outcome that drives the user experience.
Consumer experiences are the intangible value that the consumer enjoys and benefits from after consuming or utilizing your goods or services.
Technical specifications aside, the user experience is what potential customers value. The result of the purchase is what gives meaning and value and sharing the joy that the value brought is what influences others to want to do the same. Shared user comments, reviews and testimonials are powerful social influencers in informing pre-purchase expectations and these opinions shape buying behaviour.
 We value the subjective opinions of friends which is why they are an effective social influence on product or service expectations and hence on buy decisions.
“Word of mouth is the primary factor behind 20 percent to 50 percent of all purchasing decisions.”
Information Needs and Channels
An effective marketing strategy needs to address information Push, Pull, Engagement and Promotion. The Webo LPM referral and loyalty programme addresses these needs within a tried and tested framework. Successful marketing campaigns need to give attention to the foundations needed to build and drive a campaign.
The Webo PeP and the LPM
The LPM has a focus on digital marketing. The PeP (Performance enhancement Programme) has a focus on enhancing business performance. The PeP has been tried and tested in a variety of countries and has time after time produced what have been described as impossible turnarounds.  The PeP is not a quickfix. You can read a published case study & reviews on an eBook available on Amazon. The LPM is a fast track marketing framework that has a focus on referral and loyalty marketing to drive revenue growth. The PeP is a bonus to Webo SaaS subscribers.
Shared Opinions

In a nutshell, shared opinions drive sales. Your customers/clients will talk to their friends about cherished experiences as it is human nature to do so.
A study from Texas Tech University confirms that: 83 percent of users are likely to share a product or service after a good experience. Yet only 29 percent  actually do. That means that an average of 45 percent of users who would otherwise share do not share.
Marketing can be expensive and time-consuming. Referral marketing is anything but this. In fact, referrals are the cheapest and most effective form of marketing and shouldn't be ignored. In its simplest form, referral marketing doesn't cost a dime.
- Texas Tech Today
Satisfied customers have something to share but generally do not do so if it is not easy to do while enjoying the experience. Incentivising customers may help but "quick and easy" sharing is essential.
"the sale is not complete until the customer is so happy that he or she confidently makes referrals."
John Jantsch (Duct Tape Selling: Think Like a Marketer-Sell Like a Superstar)     
Convenience and Ease of Use

The Webo Loyalty & Referral App puts the opportunity to share on the phones of your customers. Earning an incentive plus the gratitude of a friend is only a couple of clicks away on a PC or on the phone that is in their pocket.
Statically studies have found that between 70% and 86% will share when it is worth their while and it is easy to do. Thus:
  • For every 100 customers,
  • 70% will share with friends on say,
  • Facebook where, on average, they have 338 friends.
  • This referral will then reach: 70% x 338 people x 100 customers = 23,660 referrals in the first step.
  • In the next step the reach explodes but suffice to say that the local reach will be saturated.
  • Studies show that in seven steps of friends and connections sharing, everyone in the world on the internet will be reached.
Suffice to say that with the Webo App making it easy, you will earn your brand positive engagement and you will leverage customer advocacy to effectively accelerate growth.
Formal, Measured Multi-Channel Marketing
With the Webo LPM system your marketing strategy will boost consumer advocacy with your incentives to drive revenue growth in a measurable way. The Webo 4 Channel Marketing System with “ Channel Fusion” allows your brand to leverage multi-channel word-of-mouth advocacy. The best part is: crafting a 4 channel referral program is not complex. You can utilise the Webo SaaS on a DIY basis or on a B4U basis. In both cases there is a support service so that you can get your customers to grow your business ASAP.
According to Wharton, referral customers have a 16 percent higher lifetime value than non-referred customers.
Plus, they will love your brand because they will have a direct link from the bookmark button on their phone screens to the App. This direct link will establish and build a relationship via the App where they can add reviews, share comments with social networks, monitor #hashtag engagement, link and engage on your blog, find your specials, product lists and more. In addition, the App will build your audience via generic and social share promotions.
A recent Heinz report showed that companies with formalized referral programs experienced 86 percent more revenue growth in the last two years, compared to the rest.
The above companies exemplify how sustainable and effective refer-a-friend programs are at driving brand awareness and creating new sales opportunities from existing customers.
Many large international businesses have a marketing strategy based on Referral Marketing. But first: what is not a referral programme? A referral program is not a one-time interaction between a brand and a consumer. Nor is it marketers dangling a carrot in front of consumers, enticing them with “win big” promises. Neither is it affiliate marketing, where 3rd-party sites do the work for your marketing team and you pay them a bounty. Instead, referral programs are built upon genuinely enthusiastic, customer-get-customer interactions that equally rewards all parties involved. There is a science to making referral marketing programs succeed.
Customer Tiers
In a product or hospitality centric application the Webo LPM offers three points based loyalty levels which leverages the enthusiasm of the happiest, highest-spending customers with the most points in Level 3. In a referral-centric application such as a professional application used by a Law Firm the application can categorise clients into groups such as corporate, private and public sector niche categories. Why?
Because like follows like and those that spend more and who spend more often are likely to be an identifiable group who may respond to different incentives. This customer segment is most inclined to refer customers who will be satisfied with your offering and spend money similarly. Referral incentives should be targeted to specific groups and this is what makes them effective. The idea is to target customers to get target customers.
Targeting and Incentive Currency
How can one engage customers and what’s the most compelling incentive you can offer? There are a wide variety of possibilities including the following as potential incentives to establish and build relationships:
  • Discount: Buy More (2 for 1) Coupons, Discount (50% off) Coupons, Cash Backs, Free/Expedited Shipping
  • Educate: Workshops, Webinars, Mini-Courses, Video & Audio Presentations
  • Events: Social events, Workshops, Guest Speaker Presentations
  • Fun and Entertainment: Competitions, Lucky Draws, Giveaways, Free Gifts
  • Information: How To Guidelines, Newsletters, eBooks, Articles, Brochures, White Papers, Community WhatsGood Pages
  • Memberships: Exclusive VIP Access, VIP Memberships, Secret Menus, Free Trial Memberships
  • News: Topical Press Releases
  • Reality: Case Studies, Success Stories
  • Referrals: Comments, Reviews, Free Consultations
  • Reviews: Video Feedback, Written Opinions, Audio Podcasts
  • Simplify: Articles that summarise or which include Infographics or Graphs, Checklists, etc.
  • Surveys: Interactive Quizzes, Polls and Forms
  • Trends: Top 10 Lists, What's Good Apps, Surveys and the results thereof
You will need to draw on your understanding of your customers/clients.  Only appealing offers drive shares, so select a valuable and compelling incentive specifically matched to your best customers. More often than not the most compelling benefit will not be a financial discount. Recognition and VIP status coupled with service benefits are normally highly desirable. Double-sided rewards that deliver equal benefits to both sender and receiver have been found more effective than single-sided rewards. User altruism and the will to improve their friend’s lives is a fundamental aspect of a compelling incentive.

The Webo LPM framework has a foundation of a Multi Layered Loyalty Programme. There are three loyalty status tiers that offer gated access to defined benefits. Level 1, Level 2 and Level 3 can be named and status can be awarded on the basis of points earned for purchases or for other defined reasons such as event particitation, etc. Points are awarded for a specified duration. The points system is simple and easily understood. In a professional environment the tiers would be used to segment clients into niche audiences.
Loyalty Programme Structure: Fans, Advocates, Advisors and Promoters?
The Webo LPM draws a distinction between Advocates, Advisors and Ambassadors.
  • Fans in a consumer environment: are those who enjoy L1, L2 or L3 status which is earned on the basis of purchases with a defined time period.
  • Fans in a professional environment; are those in niches such as corporate clients, private individuals and public sector clients.
  • B2B, B2C and B2P (business to Public Sector) could be categories awarded with a lifetime duration.
  • Advocates: are those that share comments with friends on social networks.
  • Advisors: are those that write reviews on your App.
  • Ambassadors: are those that e-mail a Level1, Level 2, Level 3, Advocate or an Advisor incentive to a friend in return for the same incentive that was sent to the friend.
  • Reviews: add social credibility and they give others something to share.
  • Referrals: may take the form of individual incentive sharing by e-mail or by sharing comments on social networks.
  • Ambassadors: are not a defined status but rather a category of customers who have taken the option to e-mail a benefit that may be active in any status level. Ambassadors are often referred to as Promoters.
Thus those that e-mail a Level1, Level 2, Level 3, Advocate or an Advisor incentive to a friend (where this is on offer) in return for the same incentive are referred to as Ambassadors. Ambassador rewards accrue only upon the friend taking up the offer (see below).

Aims, targets, objectives or goalposts may be set as a condition which must be completed by the receiving user in order for the referring customer to achieve their reward. These might be a signup, account activation, paid signup, a purchase, or something of the like. It’s the closed loop that brings ROI home for everyone. This needs to be an easily completed task, yet one meaningful to your brand’s growth strategy. Eg  Airbnb’s  goalpost is the first booking made by the referred user. Fraud prevention is another key aspect in goalpost creation and conditions need to match the value of benefits. At Airbnb the credit card used has to be one that has not before been used for a Airbnb purchase. For most businesses that use offsite bank credit card processing this would not be possible as the firm does not maintain a database of credit card details. Two-way verified rewards are the norm where the sender has not already earned the reward and the benefit is specificlly for the sign-up of the receiver. Where the sender has already earned the reward the receiver using, say, a coupon is a bonus and thus it need ot be verified before the sender is rewarded. Where the objective is to grow sales the fact that the referral is to an existing customer may be of little concern as the facus will be on the offer's percentage take-up rather than on account sign-ups.

Effective referral programs are driven by referral programme software. The Webo Loyalty & Referral App is underpinned by convenience as it is an App on a phone or a PC bookmark. In this regard the market place is competitive. Where the Webo Loyalty & Referral App is one of a kind, is that it is further underpinned by an advanced 4 Channel Marketing system with channel fusion. Designing a user experience hinges upon optimizing what the end user sees and how they interact with the referral program. The Webo Loyalty & Referral App channels Push and Pull engagement and it promotes information delivery. The 4 channels are able to cover all the marketing bases as the system is an advanced website and eCommerce/product showcase builder, a viral blog builder, a Link & List App Builder and a Loyalty & Referral Programme App Builder with Social Media integration and Comment Syncing. Optimizing across channels in a way that is seamless is what Channel Fusion delivers.

How likely are your users to find your referral program? The Webo Loyalty & Referral App is promoted to all customers who sign-up for a private social media account where they can track and edit on-the-record comments and  reviews and they can opt-in for email and SMS messaging. In users' online accounts they can follow their loyalty benefit transaction history and they can select specific benefits for on phone redemption or they can print tickets, coupons or vouchers for presentation to suppliers.

The Webo App offers a seamless sharing experience that is just a few taps away from the button bookmark on a user's phone screen or on a tablet, laptop or PC.

The Webo signup/sign-in is a managed process from the point that a user selects a benefit option on the App that can list full or selected product ranges.
Promoting the Referral Programme

The tier structured Webo App enables a strategic focus on first-time new customer sign-ups, comment sharing and best-customer filtering. Suppliers can offer lead magnets such as eBooks, video and photo libraries, useful information linked lists, topical blog discussions, online customer engagement in webinars for up to 1,000 people who follow a meeting wall in an online meeting room after having received a link to an online meeting pack stacked with all the supporting documents. To elaborate, a business could invite an authority on a topic to host a webinar for clients. Level 3 customers would be able to download invitations to the webinar and they would be able to invite a friend.  Getting a valued eBook written by an expert as a benefit to Advisors, as an example, will be significantly cheaper than an across the board discount. There are many benefits available because of the advanced content management capability of the Webo Platform. You could also offer an App that lists and links to say, 1,000 local restaurants, or local emergency numbers, home and garden suppliers etc.
Where does one start? Referral and loyalty marketing has a foundation of happy customers who are delighted with your goods and services. Where customer satisfaction and positive user experiences are not the status quo then start with the PeP guidelines to assist you achieve remarkable results.
Once you are delighting customers you need to go fishing. Yes, you need to fish for referrals and you will succeed provided you use the right bait! You can do it the hard way and you can do it the easy way with the Webo LPM SaaS Package. We suggest that you take the time to rethink your digital marketing strategy to take advantage of the possibilities that Loyalty and Referral Marketing has to offer.

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