When it comes to marketing your brand and business, nothing is more effective than a robust and intelligent referral marketing program. Responsible for bringing the likes of PayPal, DropBox, and AirBnB to mainstream success, building your own referral program can be the difference between your business thriving or subsiding in today’s ruthless online marketplace.
Referral marketing is the method of promoting your products and services through referrals, or word of mouth. It’s likely you yourself have used a referral program for many of your consumer needs.
We sat down and looked at what made the most successful referral programs, employed by some of the largest businesses in the world, so reliable for driving traffic and engagement to their business.
We identified a list of eleven ideas that are essential to turning your customers into effective brand ambassadors.
Also, read on 11 Referral Program Ideas to Take Your Sales to the Next Level
1. Make it a Contest
When it comes to trying to engage your users with a referral program, one of the best ways to energize them is to make it a contest. Usually this will require some backend work to develop a contest system within your own business, but the payoff can be significant.
If your goal as a business is to get your customers to link your product to their family and friends, tapping into the competitive nature of the human mind is a powerful motivator. This is usually quite cheap, from a business perspective, and allows you to cap the protentional rewards a single user can earn.
This also allows you to scale the reward. So, if you start with getting your users to simply add contact information, but then the next step is linking your business to their family and friends, your users are more likely to engage due to the sunk-cost fallacy.
An example of this was the “like and/or comment to win” campaign launched by Hallmark UK, that had users on Instagram simply like or comment to a post for a chance to win a range of products.
This resulted in record engagement numbers, getting more than 220 people to like and share the post with all their friends. Spreading their brand out into the web in an organic manner, and getting their brand in front of the eyes of potential customers.
2. Open Your Business Up to Cross-Promotion
At the core of all referral programs is the idea of networking. By leveraging your own brand, and then engaging that brand into similar markets, the user sees that they can benefit by engaging in your referral program.
This is often as simple as a few key business relationships, which can in turn allow you to also synergize your referral program with other sites your users may be engaging with.
One of the most successful examples of this practice came from a partnership between Spotify and Uber. This cross-promotion allowed Spotify users to choose the music played in their Uber rides. Providing a highly desired functionality to their users, and driving more people to use both Spotify and Uber as a result.
3. Linking Your Referral Program with Charity Efforts
Depending on the nature of your business, packaging referral rewards with charity contributions is a fantastic method to drive up engagement. This is also a great way to offer help to causes that align with your business image and promote a better reputation in the process.
A good example of this is: Running a charity drive for organizations such as PETA, or Cancer Council, and depending on the amount contributed by your users, offer them tiered rewards that match their generosity.
A success story for this method came to us from the Card and Payment Awards who was supported by Ingenico, an eCommerce platform in the UK. Ingenico offered a small percentage of every payment made on the site to the charity, raising over £100,000 as a result, and pulled in significant traffic as a result.
Ingenico also was able to have their brand thanked during the awards, and had their logo posted within the live stream. Providing important exposure to the up-and-coming brand at the time.
4. Provide an Exclusive Product/Service
One of the strongest motivators for any human is the Fear of Missing Out or FOMO for short. If you want your users buzzing with excitement over a new product, simply attach it to a suitable high level in your referral program.
This creates a situation where the customer sees a product, they desperately desire it, and the only way to get it is through the referral program. This method is used by every successful referral program on the planet, and if implemented correctly, can be a huge boost to your sales and user engagement metrics.
This method is most successfully employed in the gaming industry, with a prime example being the Recuit-A-Friend system found in the popular game World of Warcraft. This system has users bringing their friends into the game, and as a result, offers them cosmetics and items that can not be found outside of the referral program.
This has been a system in place for some time and has been key to Blizzard’s marketing strategy for almost fifteen years now. For good reason.
5. Mystery Rewards
Getting rewards from any referral program is exciting, but to add a little extra spice to the mix, add an element of mystery. This is usually best employed on the lower levels of your referral program, and can come in many forms.
You can create mystery boxes, that offer a range of rewards (With a few highly desirable ones). This can also include bundling rewards together and shrouding the bigger item behind a veil of manufactured secrecy.
This is commonly used in the app market, with a successful example coming from Invitation, an online stock trading extension. Within the app, users can refer others with codes and unlock mystery boxes for a variety of partnered services across the internet.
This not only promotes their own brand but in turn offers value to businesses willing to partner alongside them.
6. Seasonal Rewards
By linking back into a sense of FOMO again, driving engagement can often be as easy as providing four different referral programs throughout the year. Pairing this with seasonal styled rewards can create a sense of urgency, and will push your users to go out of their way to reach the higher tiers of your program in a much shorter timeframe.
Seasonal reward methods have been a favorite of the gaming landscape, due to their hyper-focus on quarterly engagement metrics. One of the most successful examples of this is the World of Tanks referral seasons, which offers new rewards each season for people referring their friends into their game.
Whilst you do not have to implement seasonal rewards exactly in this manner, the gaming industry is a good place to look when it comes to this method. As it has proven incredibly successful for them, and they have refined it to effective marketing science.
7. Store/Subscription Credits
Rewarding your users with the store or subscription credits with each referral to your business is a proven method of driving up engagement. Since you are able to guarantee these are spent back into your business, this won’t cost your bottom line too much and is a great idea for smaller businesses who want to make sure their user base continues to spend in your store front.
Crediting users in this manner has been employed by the most successful referral programs in the world, most famously by Paypal who started the PayPal Referral Program that offered users a $10 Sign-up bonus, and a $50 referral bonus.
Considered very risky at the time, this is now considered one of the key reasons for PayPal’s widespread success. As it kept users invested in the platform for the longterm.
8. Social Gifting
Social gifting is a great way to provide an incentive to users who refer their friends to your business. This plays on the human desire to share an experience with others, and if your users can offer a reward for their family and friends for signing on, they are much more likely to go out of their way to share your business.
This is a great method of promoting organic word of mouth, without the hassle of pushing your users to annoy others with your business.
Social gifting is more popular in Asian markets but has been a push in the last eight years into the western landscape. A prime example of this was both TikTok and Facebook implementing a social gifting system into their platforms, allowing users to send certain gifts (At a discount) to other users.
This was paired with the beauty industry, offering unique exposure to less known beauty products. Depending on the nature of your business, you may want to volunteer your brand to be part of this social gifting experiment or promote your own version of social gifting on your platform.
9. Tiered Reward Programs
At the core of every successful referral program is a tiered system of rewards. This allows you the freedom to offer substantial rewards at the highest tiers, and push your users to reach those tiers. Often coupled with a nice graphic that shows how close they are to the next set of rewards.
Whilst it can be daunting, adding such significant rewards at the top, the benefit for a business far outweighs the cost of rewarding your most avid brand ambassadors.
A prime example of this can be found in many of the largest businesses on the planet, such as Microsoft, Oracle, Google, and Apple. Each one of these businesses offers scaling rewards to their loyalty programs.
You can see an example of this system in action when looking at Microsoft Rewards, which offers regular users and brand ambassadors with unique and desirable rewards the more they climb the loyalty ladder.
10. Gamified Referral Programs
This concept requires you to combine a range of referral systems into a game-styled app or program on your website. This plays on the addictive nature of games and encourages customers to reach the next level through engaging in your referral program.
With each passing level, you can offer your users more rewards, access to leaderboards, and badges that they can pin to their profile. All rewards that won’t cost your bottom line.
Being one of the more engineered ideas, this isn’t always a good fit for every business, but can be immensely successful in the right industries.
Examples of this style can be found in almost every large business that employs an active referral program, but it is not the key defining feature that makes them successful. For example, Amazon Prime and Microsoft Rewards are two examples of gamification done right, but they also employ a wealth of other tactics within the system.
You can learn more here.
11. Exclusive Membership Deals
Offering an exclusive membership or subscription deal to your most effective brand ambassadors is a great way to incentivize your users to engage in your referral program. The nature of this exclusive membership is often very specific to your business, but examples include Offering VIP customer support, better membership deals, access to free products, unique graphics on their profile, and private forums/chat rooms for the top contributors.
This not only rewards those members but as these exclusive users interact with your site, other users will look up to them and want the same VIP treatment they are receiving. Pushing even more of your user base into becoming effective brand ambassadors.
A great example of this method comes from the shoe icon Nike, that created their own Nike Membership Program. Providing unique deals, exclusive options for new releases, and insights into the future products before anybody else hears about them.
Further read on:-
- The complete guide to partnership sales in 2021
- The complete ambassador marketing guide
- How to ask for referrals
