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Both strategies can help you increase sales, but they work in different ways. A loyalty program rewards existing customers for continuing to shop with you, while referral discounts encourage happy customers to introduce new buyers to your business. Choosing the right approach depends on your products, customers, budget, and business goals.
If you’re looking for ways to grow your Cricut business, explore the resources available at InsideOutlined’s online store to help you strengthen your business strategy.
What Is a Loyalty Program?
A loyalty program rewards customers for making repeat purchases. Instead of constantly searching for new buyers, you encourage existing customers to return by offering incentives.
For example, your Cricut business could offer customers a discount after five purchases, points for every dollar spent, or a special gift when they reach a spending milestone.
Loyalty programs work particularly well for businesses that sell products customers purchase regularly. If you create seasonal decorations, personalized gifts, customized apparel, or party supplies, customers may have plenty of reasons to shop with you again.
Benefits of a loyalty program include:
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Encouraging repeat purchases from existing customers.
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Building stronger relationships with your audience.
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Giving customers a reason to choose your business over competitors.
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Creating opportunities to promote new products and seasonal collections.
However, loyalty programs require organization. You must track purchases, communicate rewards clearly, and ensure that discounts do not reduce your profits too much.
You can find additional business-building ideas at InsideOutlined to help you develop a more sustainable Cricut business.
What Are Referral Discounts?
Referral discounts reward customers for bringing new buyers to your business. Instead of focusing primarily on repeat purchases, this strategy helps you reach people who may not have discovered your products otherwise.
For example, you could give an existing customer 10% off their next order when a friend makes a qualifying purchase. The new customer might also receive a discount on their first order.
Imagine creating custom birthday shirts. A satisfied customer recommends your business to another parent planning a birthday party. That new customer places an order, and both customers receive a reward. You gain a potential long-term customer while rewarding the person who helped you make the sale.
Benefits of referral discounts include:
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Reaching new customers through personal recommendations.
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Encouraging satisfied customers to promote your products.
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Potentially reducing your dependence on paid advertising.
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Building trust through word-of-mouth marketing.
Referral discounts can be especially useful when launching a new Cricut product line, expanding into a new niche, or trying to increase awareness of your online store.
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Loyalty Program vs. Referral Discounts: Which Is Better?
The best choice depends on what your Cricut business needs most. Both strategies can work, but each serves a different purpose.
| Business goal | Best option |
|---|---|
| Encourage customers to buy again | Loyalty program |
| Attract new customers | Referral discounts |
| Reward your most frequent buyers | Loyalty program |
| Generate word-of-mouth marketing | Referral discounts |
| Grow while retaining customers | Both programs |
If most customers purchase once and never return, start by improving your customer experience and introducing a simple loyalty program. If customers love your products but you need more people to discover your shop, referral discounts may be the better starting point.
You don’t have to choose one strategy forever. You can begin with the program that addresses your biggest challenge and introduce the other when you’re ready.
Can You Offer Both Loyalty Rewards and Referral Discounts?
Absolutely! Combining both strategies can help you attract new customers while encouraging existing buyers to remain connected to your business.
For example, imagine you sell personalized gifts through your online store. You could create a loyalty program that rewards customers after every few purchases. You could also offer a referral discount when they recommend your business to someone who completes a purchase.
To keep your programs manageable, follow these tips:
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Keep rewards simple. Make sure customers understand how to earn and redeem their rewards.
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Protect your profit margins. Calculate material costs, labor, packaging, platform fees, and shipping before deciding on a discount.
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Set clear rules. Explain when rewards apply, whether discounts can be combined, and when referral rewards are issued.
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Promote your programs. Share the details in order confirmation emails, social media posts, product packaging, and your website.
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Track your results. Monitor repeat purchases, successful referrals, discount costs, and overall profit.
Your goal is to reward customers in ways that encourage profitable growth, not simply to give away discounts. For more ideas to support your business, visit InsideOutlined’s online store.
How to Get Started With Your First Program
Start small rather than creating a complicated rewards system. Choose one goal, establish a simple offer, and test it with your existing customers.
For a loyalty program, you might offer a reward after a customer makes three qualifying purchases. For a referral program, you could provide a small discount to the existing customer and the new customer after the new buyer completes an eligible order.
Run your offer for a set period, such as 30 to 60 days, and review the results. Determine whether customers participated, whether the program generated additional sales, and whether the rewards were affordable.
If the results are positive, refine your offer and expand it. If customers aren’t participating, ask for feedback and adjust the reward or simplify the process.
You can explore more resources for building and growing your Cricut business at https://store.insideoutlined.com/.
Final Thoughts
So, should you start a loyalty program or offer referral discounts? Choose a loyalty program when repeat purchases are your priority, and choose referral discounts when attracting new customers is your biggest challenge.
For many Cricut businesses, the strongest long-term approach is to introduce both strategies gradually. Reward customers for returning, encourage them to recommend your products, and make every incentive work toward a clear business goal.
With a thoughtful strategy, you can build stronger customer relationships, increase sales opportunities, and create a more sustainable Cricut business without relying entirely on constant promotions.
