Do you want to take full advantage of referral marketing by building the best referral program for your business, but not sure what the program should be?
The idea of turning loyal customers into brand ambassadors seems extraordinary, imagine having your customers spreading the word about your product and recommending your service to their friends and family – You don’t need big banners or expensive ad campaigns to boost sales. Because no other marketing strategy can come close to word-of-mouth marketing.
A well-crafted referral program is more than just a strategy; it’s a dynamic force that drives growth, engages customers, and cultivates brand loyalty.
Why do you want to take risk of reinventing the wheel again when you can learn from the success stories of others?
We have created an incredibly awesome list of businesses that have taken advantage of viral buzz to increase their referrals, well we haven’t told you what the best part is – This article includes referral ideas for all business types from E-Commerce to Travel to Fashion and they fit best for companies of all sizes – small, medium and large. It doesn’t matter if you’re a startup owner or an enterprise head, they’ll work for you.
Airbnb (Travel) Referral Program
Share your Love for Travel – Invite your friends, get $30
Airbnb stumbled upon the goldmine of referrals, initially unaware of its potential. They created the first referral program for their audience and didn’t promote it well, even Airbnb employees didn’t know that there was a referral program.
Later they realized that the first phase of their program brought a good amount of revenue, and decided to invest more into the referral program.
About twelve years ago, Airbnb developed Referral 2.0 for its then-growing mobile user base as well as its website visitors. Users were able to send customized emails to their Gmail contacts and import their contacts with ease. In fact, they created a program that monitored the activity of other contacts in order to provide current users with a list of contacts who are most likely to sign up using their referral link.
After building an utterly flawless referral program, they rectified their earlier mistake by strongly promoting it. The outcome they found after A/B testing the copy is the most interesting of the many things they must have learned along the Referral 2.0 journey: It seems that referrals were more prompted by the altruistic message “give your friends $30 to travel” than by the message “invite your friends, get $30.”
Overall, this campaign increased first-time bookings by 900% year over year and referral sign-ups by 300%.
Lessons from Airbnb
- Always have a referral program. It’s perhaps the most cost-effective & high-value marketing machine for your business.
- Analyse and improve the program’s performance through A/B testing.
Fun fact: Apparently Airbnb needed 5 full-time experts, 30000 lines of code and 3 months to develop the Referral 2.0 program. Today, you can have a better referral program in less than five minutes with Referral Rocket, signup for free trial.
Dropbox (SaaS) Referral Program
Get up to 16GB of free space by inviting your friends to try Dropbox
Zooming from 100,000 to 4,000,000 users in just over a year, Dropbox’s referral program is hailed as a breakthrough. Dropbox had a really unique take on a referral scheme. Since their primary goal is to provide users with a digital space to store files, they have developed a program that will offer users extra storage space by inviting their friends to try Dropbox. Pretty Creative!
The offering was very simple: Invite a friend and get more free cloud storage. It permanently increased signups by 60%.
Lessons from Dropbox
- Think beyond monetary incentives.
- Offer product-based reward, It will increase word-of-mouth advertising as well as brand loyalty.
Dollar Shave Club (E-Commerce) Referral Program
Invite friends to join and get $15 DSC store
A famous and fascinating example of an e-commerce company is Dollar Shave Club, for businesses that offer subscription services.
Most likely, you are familiar with Dollar Shave Club from the widely shared video that surfaced in the initial days. In an interview, the company’s founder claimed that fifty thousand people refer friends to Dollar Shave Club each month.
Dollar Shave Club invites consumers to sign up for their referral program and earn up to $15 in DSC store credit. A $15 store credit is a great incentive for consumers who are on a monthly subscription to save money on their next order.
Lessons from DSC
- DSC promotes its referral program from the opening email itself.
- You should start promoting referral programs through emails so it gets enough visibility.
Tesla(Automotive) Referral Program
Receive a $1,000 credit when you order a new Model S or Model X.
Tesla’s referral program offered huge rewards. When a referral code was used, the most recent referral program offered Tesla referrals a $1000 credit toward the sale price of a car. The more referrals a user sent, the more perks they would receive. Everything from new rims to a new car!
Overall, Tesla got a 40x ROI with its referral program.
Lessons from Tesla
- Cars can be pricey and people would look for ways to reduce the price. Tesla perfectly used this to offer product-specific rewards
American Express (Credit Card) Referral Program
Refer friends. Get rewarded.
Refer a Friend is a program where customers can earn bonus Amex points for referring someone they know to sign up for a card they currently have open and listed in their American Express online account.
Customers get 10000 to 30000 points depending on the type of the card. Users might also get $25 bonus points and the referred friend can get an amazon gift card.
For Platinum Edge Credit Card, both the referrer and referee receive 10,000 reward points.
Lessons from American Express
- Choosing dynamic rewards can be very beneficial. American express offers rewards based on the card and membership type.
Uber (Automotive) Referral Program
Get free ride worth up to $5
Uber’s concept was innovative because it improved our transportation choices by adding a layer of convenience.
You know what made their success more rapid? Their strategy for referrals!
Uber’s referral program was so simple yet so effective that it generated a 12x ROI. The scheme began with a $5 incentive that could be used for rides for both the referrer and the referee, and it has remained mostly unchanged throughout the years.
The ease with which one could access their referral program was another factor in its massive success. One of the most important features on their app’s sidebar is the ability to share and receive free rides. Simple!
Lessons from Uber
- Put the button/link to the referral program at a frequently accessed place in the application.
- Make it easy for customers to access referral program.
Robinhood(Stock Trading) Referral Program
Get early access by referring friends
Robinhood received 1 million warm leads through a referral program.
Initially, Robinhood was a small startup with a brilliant concept. They made a simple, pre-launch page and requested people’s emails in order to provide them early access to their revolutionary, soon-to-be-launched product
People who registered were given a waiting list number and a Thank You email. There was a message encouraging users to recommend friends in order to gain priority access below that number. And so it started: the pre-launch exponential growth of the Robinhood user base.
Robinhood’s current referral program offers $10 to buy free stock for both referrer and referee.
Lessons from Robinhood
- Provide a brief, clear copy that summarizes the referral offer in seconds.
- Make the process more entertaining.
- Make use of people’s FOMO (fear of missing out).
Dia&Co.(Fashion) Referral Program
Share your style secret – Give $25 Get $25
Dia & Co. aims to create a safe space where plus-size ladies can buy trendy clothes available. Their customer acquisition strategy includes a two-way referral scheme that they have designed for their patrons. Referred clients earn a $25 discount + domino rewards on future purchases, while current customers are rewarded $25 for referring friends.
In order to get current clients to sign up for their referral program, Dia & Co. chose email marketing as their primary marketing channel. Thus, in the first month alone, Dia & Co. witnessed 40,000 clients distribute referral links, resulting in 22 conversions every day.
Lessons from Dia & Co.
- Conversion rates are increased through personal interaction and a clearly defined call to action.
Hulu(Television) Referral Program
Get more than a year free
The subscription video-on-demand service Hulu has an amazing referral scheme. By referring enough friends, members of the referral program can get free Hulu for more than a year. A friend can receive two free weeks of Hulu when they sign up and pay for their first month of service. That seems like one of the most effective programs for referral marketing.
Though they have a limitation on referrals per program member (the limit is 30), the possibility of free access to Hulu for over a year can convince the customer to refer multiple times.
Lessons from Hulu
- Make the incentive exciting enough for customers to not just refer once but multiple times.
Dr. Squatch Referral Program
Dr. Squatch is a men’s soap brand. They created a referral program and ran A/B tests on it to find the best offer approach for their program. In order to A/B test the offers, they added two incentives—a $10 credit or a free soap bar to a double-sided referral offer. They came to the conclusion that buyers might find better deals than a $10 credit.
They crafted their current referral program—which offers clients 100 points and a $10 discount—using the data from their A/B test. Consumers who redeem their points will receive direct discounts on their next purchase.
Lessons from Dr. Squatch
- By offering great deals to customers, you can increase referrals for your business.
- Test your referral program through A/B testing and improve your rewards.
The fastest way to start a solid referral program is to take inspiration from brands who are successfully doing it and analyzing the reasons behind the success of their referral program ideas. Take clues from these mega brands and design a niche-specific referral program that suits your business and aligns with your brand message. Majority of examples we discussed have incorporated double-sided referral programs and they offered incentives that are industry-specific and relevant to their product or service.
