A majority of ecommerce brands rely on referral programs to increase customer acquisition rates due to their proven effectiveness over the years. A referral program is a marketing strategy used by brands to encourage existing customers to recommend its products and brand to their friends and family. The primary strategy for referral programs is that existing customers receive a reward for promoting the brand to their family and friends. There is also usually a reward for the referred customers to entice them to patronize or become a member of the program. In essence, the brand wins the loyalty of an existing customer and gets new customers as well.
If you’re considering setting up a referral program, it is prudent to look at some brands that have already set the pace and achieved immense success from implementing referral strategies. This post will look at 10 of the best referral programs, how they are being run, and some important lessons you can learn from them.
Below are the brands we will be discussing:
- Amazon Prime
- PayPal
- Dropbox
- Uber
- Airbnb
- Casper
- Tesla
- Outdoor Voices
- RiffRaff & Co
- Glossier
Amazon Referral Program
Amazon Prime’s referral program allowed users to earn $5 referral credits for inviting their friends to sign up to become Prime members. To receive these credits, one must have a valid customer account on the Amazon.com website. As a member of either Amazon.com or Amazon Prime, one can share their referral link with friends and family through email or social media. After the referee completes their Amazon Prime signup process and is accepted into the program, the referrer becomes eligible to earn credits. The Amazon Prime Student program, a variant, rewarded students a $10 credit for inviting friends to sign up. Referral credits are valid for a year and are automatically applied at checkout on Amazon purchases.
Lessons to Learn from Amazon
By not limiting the program to Prime subscribers, the brand increased the number of advocates, maximizing the possibility of reaching potential Prime referrals each day. In addition, the referral program was highly beneficial to casual shoppers because they could invite their friends who were more frequent buyers and earn credits for their next purchase.
Another important takeaway is that Amazon Prime’s referral program is easy to navigate. The company showed its users the next steps to take through every email, landing page, and pop-up. As a result, users could freely progress in the referral process with clear calls-to-action rightly placed with fitting instructions that remove any guesswork.
PayPal Referral Program
The PayPal referral program uses a simple double-sided referral rewards system that allows both parties to earn rewards when an account is created through a referral link. Both the referrer (the person inviting someone to join PayPal) and the referee (the person who receives an invitation) get a $10 reward.
To be eligible for rewards, the referrer and referee must have a personal PayPal account in good standing at the time of participation and throughout the period the rewards are issued. Referrers can invite referees via the referral mechanism in the app.
The standard reward amount is $10. However, referrers can earn only one reward per referee and five rewards within the calendar year.
Lessons to learn from PayPal
Instead of only offering users a reward, PayPal ensured that existing and new users gained an equal reward. This tactic was superb because it is easier to get new referrals when both parties know that they’ll all receive benefits. Aside from increasing their customer base, PayPal’s referral program structure helped them gain even more profit. The more referrals were made, the more the company earned profit from the transaction fees.
Again, PayPal’s decision to give its users cash rewards was highly advantageous because it reinforced its primary service, easy money transfers. Furthermore, referees were required to use the service for their first transaction to receive their rewards, an intelligent way to get new users to experience how PayPal works.
Dropbox Referral Program
Dropbox’s referral program chose to reward customers with more free space. The program uses a two-sided reward model, which sees that both the referring customer and their referral enjoy free storage space once an invitation is accepted.
Users with Dropbox Basic accounts are eligible to earn 500 MB for each referral and can earn up to 16GB.
Users who have Dropbox Plus and Professional accounts are eligible to receive 1 GB per referral and can earn up to 32 GB.
Once a referral link is sent, the friend you referred needs to accept the invitation in the link sent and sign up. Then they have to install the Dropbox desktop app and sign in through the app. They must also verify their account’s email address.
Lessons to learn from Dropbox
Dropbox ensured that its onboarding process became a piece of cake for its users and integrated its referral program as a final step.
Another key takeaway from Dropbox’s referral program is how clear people can perceive the values or rewards they can earn by participating. The brand takes the initiative to state the specific actions customers need to take and the rewards eligible.
Dropbox makes tracking progress in the referral program easy by including a panel accessible to all users. Through this panel, they can see how their invites performed and the amount of storage space they earned.
Uber Referral Program
Uber riders receive a unique referral code for referring their friends to sign up for an Uber account. Once that person uses the referral code, both parties receive Uber credit rewards.
Drivers who sign up to drive with Uber can earn bonuses as long as the person referred completes a certain number of trips. At a point, the rewards for referring drivers were determined by the referral’s status. For example, Uber drivers could earn up to $500 if the driver they referred signed up with their own car. If they referred a driver who signed up with a rental car, they could earn as much as $1750.
Uber initially offered a $10 dual-sided incentive redeemed in Uber credits. It later upgraded it to $20 and $30 dual-sided Uber credit rewards. While Uber has halted its referral program, there are still valuable lessons to learn on why it worked so well.
Lessons to learn from Uber
Uber did a great job by making the referral program easily accessible to all its riders and drivers in their apps. Riders could tap on the “free rides” button in the app’s menu to access the referral program. Again, the concept of using “free rides” as the program’s call-to-action rather than the usual “refer a friend” was an excellent move by the company. Another vital advantage of the Uber referral program was how mobile-friendly it was.
Customers could share their referral codes via email, SMS, social media platforms such as Facebook or Twitter, or copying and pasting them to share directly. The mobile-centric nature combined with the multiple sharing options made promoting the referral program highly convenient.
Airbnb Referral Program
The Airbnb Referral Program was designed to allow its members to earn travel credits or promotional coupon credits toward future bookings whenever they referred friends or family to use their platform.
Travel Credits were only redeemable via the Airbnb platform. When a member earned Travel Credits, they would automatically reflect on their checkout page, but they will need to enter a specific code to redeem them at checkout. Travel Credits did not have cash value and expired within one year after the date of its issue.
The maximum amount of Travel Credit that could be earned per member was $5,000 in Qualifying Home Reservations and Qualifying Hosting Reservations and $2,000 in Qualifying Experience Reservations.
Referred friends who signed up through a unique referral link also received credit in the form of coupons which could be used on the Airbnb platform during checkout.
Referring members stood a chance to earn $95 in travel credit for every friend they invited.
Lessons to learn from Airbnb
The company realized that Word-of-mouth was an incredible asset and decided to capitalize on that. The referral program was designed so that both users and referred friends could benefit from $25 travel credits.
Airbnb decided to take advantage of the fact that most people read emails from their mobile devices to extend their experience. Thus, they supported accepting and sending referrals on all platforms: their website, iOS, and Android apps.
Airbnb’s referral strategy was also effective because of the sense of ownership and personalization attached to it. Using personalized referral codes and URLs on invitation landing pages and emails evoked a sense of trust among members and invitees.
Casper Referral Program
Casper offers a $75 Amazon Gift Card to customers for referring their friends. When they input their email address, customers are given a personal referral link to be part of the referral program. Once a friend purchases through their link, customers will receive a $75 Amazon Gift Card. In addition, the newly-referred customer will also receive a 20% off their very first order.
Customers can also earn $10 for referring a friend to buy a Casper Pillow. The newly-referred customer gets a 10% off their order as well. Each customer can earn the maximum amount of $599 in Rewards value per calendar year.
Lessons to learn from Casper
Casper tapped into the power of testimonials and social proof to win the hearts of more customers. The company uses customer testimonials, particularly in its social media content and ads. Since customers don’t get to see the mattresses before ordering, Casper replaces this experience by incorporating testimonials from trusted influencers and existing customers on their platform.
Casper complements its flagship referral program by providing detailed content for customers who explore their website and products.
Tesla’s Referral Program
Tesla owners can earn rewards when their friends and family use their unique referral links to order other eligible Tesla products.
When a friend or family member orders through a customer’s referral link, they can earn $500 for purchasing a Solar Roof and $300 for buying a Solar Panel. The customer or referrer will also earn $500 for each Solar Roof referral and $300 for every Solar panel referral which uses their link.
Tesla owners can share their referral links after downloading the Tesla app. With the app, they can also track the status of their rewards in the Loot Box.
Lessons to learn from Tesla
One of the most attractive features of Tesla’s referral program is how valuable its referral rewards are. Despite several changes, Tesla maintained a reputation for rewarding its program members with high-value offers. Since the brand serves high-end customers, its strategy of rewarding them with unique and valuable offers is perfect for maintaining customer loyalty.
Unlike several other car brands that run on millions of dollars worth of marketing and advertising budgets to get new customers, Tesla does the opposite. Instead, Tesla focuses on giving their customers value through their referral program, and their customers are proud and eager to spread the word about their products to their circles.
Outdoor Voices Referral Program
Outdoor Voices offers discount codes to its customers and uses the double-sided incentive approach in its referral program.
With this program, any person can earn a referral reward, even if they are not a current Outdoor Voices customer. However, the referred person must be a new customer and use your unique referral code to make their first purchase. In utilizing the refer-a-friend codes, referrers can send a one-time $20 off code to as many friends as they can. Then, when that friend makes their first purchase for an order of $100 or more at Outdoor Voices, they can apply the referrer code to get $20 off. Once the referred friend makes a purchase, the referrer also receives a reward email indicating their receipt of a one-time $20 off code for a future order above $100.
Lessons to learn from Outdoor Voices
Outdoor Voices upholds a strong community approach in its branding, and this reflects in its referral program. The company sells the idea of joining a community of like-minded people while promoting its program. With its “doing things” hashtag, shoppers and customers are constantly reminded that they will not be alone when they become a part of the brand. In addition, OV’s social media pages and the website incorporates a lot of user-generated content and influencer promotions, further reflecting the brand’s goal of creating a solid community of athleisure wear lovers.
RiffRaff & Co Referral Program
Riff Raff & Co uses a simple refer-and-earn strategy in its referral program. Customers can join the program by signing up with their email addresses at riffraffandco.com. The program is open to anyone participating, so one doesn’t need to purchase a product to earn rewards. The company supplies new members with a unique referral link to share with any friend or family member in their network.
A code is automatically generated if a customer shares their links with five separate customers who successfully purchase through that link. This code can then be redeemed for a Free toy worth $65. In addition, the referred customers also get Free Worldwide Shipping when they purchase through a referral link.
Lessons to Learn from RiffRaff & Co.
One of the most significant features that made this program successful is the value it gives referring customers. If the customer is delighted with their first purchase, getting another free toy is a high enough incentive to push them to promote their links to as many of their friends as they can.
Again, the brand increased its chances of earning more referrals by including non-customers in its referral program.
RiffRaff & Co can attribute the success of its referral program to the timely emails they send at the heights of the customer’s journey. To achieve the highest engagement and responses, the brand sends emails to promote its referral program immediately after a customer’s first purchase when they are fully engrossed in anticipation. The next email reminder is sent right after the customer receives the purchased toy. Around this time, the customer feels the most delighted and is most likely open to engaging fully with the brand. Finally, another follow-up email is sent eight weeks after the purchase. These timely emails are crucial and increase the chances of a customer successfully referring their friends to the brand.
Glossier Referral Program
The Glossier Referral Program uses a double-sided referral incentive in its program.
Referrer discounts are worth up to US$10 and can be used for future purchases on Glossier.com. Referred Customer Discounts are also worth 10% off their first purchase on the company’s website. This is earned when a referred customer clicks on a referral link, creates an account and places an order within the same session on the company’s website. The discount is automatically applied to that order and is valid for use once. After that, it expires within 90 days of reception.
Lessons to learn from Glossier
One key takeaway from the Glossier referral program is its visibility and how it is well-promoted. Glossier does a great job of ensuring that its program is constantly being promoted to its customers. In addition, details about the program have been carefully explained on a specific explainer page on the company’s website.
Also, the brand’s strategy of crowd-sourcing new products, gathering feedback, and revealing behind-the-scenes stories of products has proven to be highly effective in building a robust customer-brand relationship. Over the years, Glossier has included its customers in every part of its journey through transparent and well-crafted interactions. The sense of community and involvement their customers feel urges them to share word-of-mouth testimonies to their friends.
Wrapping Up
The valuable lessons above should fully convince you that setting up a referral program for your ecommerce store is a step in the right direction. Beans is the perfect solution for online store owners who want to boost customer referrals and acquire new customers through word-of-mouth.
