Retailers Who Care About Loyalty Choose Referral Marketing

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Dora Cunningham
7 years ago
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1 Retailers Who Care About Loyalty Choose Referral Marketing

2 LOYALTY + REFERRALS: A POSITIVE CONNECTION More than three quarters of retailers have customer loyalty programs. And, retailers with loyalty programs are twice as likely to use referral marketing (RM) as those without. Referral marketing drives positive, measurable ROI at almost twice the rate for retailers with loyalty programs as without. In short, retailers who care about loyalty use referral marketing. We learned this and more in a new survey of more than 300 decision-makers in marketing and technology functions for retailers across the United States. It shows that retailers, armed with increasing digital marketing budgets, are spending more on referral marketing, marketing, and social media marketing because they very effectively help acquire and retain customers. (Find out more in our survey report, Perfect for You: How Referrals and Other Top Channels Drive Retail Revenue.) When we look specifically at retailers with loyalty programs vs. those without, striking differences emerge in how they use and benefit from referral marketing. 2

3 LOYALTY PROGRAMS ARE THE RETAIL NORM No loyalty program 23% More than 3/4 of retailers have a customer loyalty program. Has loyalty program 77% 3

4 RETAILERS WITH LOYALTY PROGRAMS USE REFERRALS When asked to name the digital marketing programs they use regularly, 57% of marketers at retailers with loyalty programs say they use referral marketing very similar to the 55% of overall retail marketers who do so. marketing Social media marketing Display advertising Search engine optimization Mobile advertising Digital video advertising Paid search Referral marketing Content marketing Affiliate marketing Digital marketing programs used regularly 87% 86% 75% 75% 71% 65% 59% 57% 56% 45% 0% 25% 50% 75% 100% Share of respondents 4

5 RETAILERS WITH LOYALTY PROGRAMS USE REFERRALS When asked specifically whether they regularly used referral marketing, retailers with loyalty programs say yes about twice as often as retailers without them. Share of respondents 60% 45% 30% 15% 0% Do you regularly use referral marketing? 54% 28% Has loyalty program No loyalty program 5

6 THE RETURN ON REFERRAL INVESTMENT It isn t just in the use of referral marketing that companies with loyalty programs differ from those without. It s also in that they re more likely to view it as an investment Referral marketing costs: investment or discount? Percentage of respondents % 62% Investment 19% Discount 18% Has loyalty program No loyalty program 6

7 RETURN ON REFERRAL INVESTMENT one that generates positive returns. Referral marketing ROI: positive or negative? 100 Percentage of respondents % 37% 31% 24% 15% 9% ROI Positive Cost Neutral Net Expense Loyalty program No loyalty program 7

8 HOW RETAILERS FEEL ABOUT REFERRALS Retailers with loyalty programs describe referral marketing more positively than do those without loyalty programs. Referral marketing attributes Is a way to reward my existing customers Is a way for my existing customers to share rewards w/ their friends Generates valuable new customers Helps me capitalize on my social follower base Helps me capitalize on my subscriber base 57% 44% 54% 38% 57% 49% 48% 39% 41% 33% Percentage of respondents Has loyalty program No loyalty program 8

9 METHODOLOGY In August 2014 we surveyed 302 respondents in primarily U.S. retail companies varying widely by geography, revenue, and type. Over half of respondents held jobs in marketing or advertising. Others held job functions including information technology, general management, and executive. Retailer Type % of respondents Clothing, Shoes, Jewelry and Accessories 22% Miscellaneous Retail 16% Computers, Electronics and Home Entertainment 15% Building Materials, Hardware and Home 13% Supermarkets, Groceries and Specialty Foods 10% Home Furniture, Furnishings and Equipment 5% Cosmetics, Beauty Supplies, and Fragrances 4% Office Supplies and Stationery 4% Books, Music and Movies 3% Automotive Parts and/or Accessories 3% Cars, Trucks and Motorcycles 2% Beer, Wine and Alcohol 2% Pets and Pet Supplies 1% Garden Supplies, Flowers, Plants and Nurseries 1% Toys, Games and Hobbies 0% 9

10 METHODOLOGY Annual Revenue Physical Footprint 2% 19% 9% 10% 7% 14% 10% $5mm < $10mm $10mm < $50mm $50mm < $100mm $100mm < $500mm $500mm < $1bn $1bn < $2bn $2bn < $5bn $5bn + 16% 10% 0% 34% Throughout U.S. Single U.S. city U.S. & international U.S. regional Single U.S. location Online only International only 18% 13% 19% 19% 10

11 ABOUT EXTOLE Extole helps brands acquire new customers at scale by rewarding existing customers. We exist to help marketers drive measurable, reliable customer acquisition at scale. Our industry-leading referral platform helps brands take advantage of a unique resource they already have in front of them: their current customers. More than 300 retail, financial services, consumer subscription, and B2B companies use Extole to acquire new customers using our platform. Follow us via: Blog Facebook Twitter Google+ LinkedIn hello@extole.com (877)

Business Overview (NAICS) By Type of Business Employees (NAICS) Establishments (NAICS)

Business Overview (NAICS) By Type of Business Employees (NAICS) Establishments (NAICS) 10 mi 25 mi 50 mi Business Overview (NAICS) Total: Employees 17,066 22,377 48,289 Total: Establishments 1,888 2,798 6,333 Total: Payroll (NAICS)($mil) $616 $794 $1,789 Total: Retail Sales (NAICS)($mil)