Airbnb ended its flagship Referral program in February 2021. Yet, it continues to be an excellent example of how a referral program could leverage user rewards, social proof, and data to increase growth. The hospitality giant built a great deal of brand awareness through its referral program while driving a massive boost in sales and bookings.
In this article, let’s look back at Airbnb’s guest referral program, how it worked, why it had a lasting impact on the brand’s growth and some of the things they could have done to make it more attractive.
How Did the Program Work?
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 earned when a referred person clicks on that member’s unique referral link to create a valid Airbnb account and completes a qualifying reservation.
According to their terms and conditions, a Qualifying Reservation must be booked and paid for by the referred friend via the Airbnb platform. In addition, they should have also completed the stay before the referring member could redeem Travel Credits.
These 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 a total of $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. Invites could be done by sharing their referral code via email or any social media platform. For example, when a member sends a friend $40 in travel credit during a referral, they’ll earn $20 when that friend travels and $75 when that friend becomes an Airbnb host.
What were the good things about the program?
The now-ended Airbnb referral program underwent some drastic improvements before it became a huge success, boosting booking and signup rates by 300%. Below are some of the great things that made it a success.
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. So whenever a user invites a friend to book an experience or trip, they both receive $25 travel credit when the new user completes the first trip. This proved successful because it leveraged the member’s inherent tendency to recommend Airbnb to their friends and family.
Another great thing about the program was how it was made accessible on all of Airbnb platforms. Since only a few apps accepted referrals at that time, 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. Even better, the platform allowed its users to import contacts from Gmail and also share their referral links via different social media channels. The convenience and ease of accessibility proved effective in gaining them more signups and bookings.
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. Whenever a new user opened the app after installing through an invitation link, it took them to a special referral landing page. The page displayed the name and photo of that referring member and a message that portrays that this friend gifted them $25 off their first Airbnb trip. Apart from the feeling of trust and appreciation this strategy evoked, it also made new users feel welcomed with a valuable gift.
One of the things that made this program successful among customers was how Airbnb communicated and offered pure value to its members and new users alike. The referral program was simple and easy to understand, and the brand did an excellent job explaining the details on a concise explainer page. By incentivizing its users and would-be travelers with $25 travel credits, the offer was primarily perceived as valuable to both members and referrals. Airbnb offered more value to its loyal customers by giving $75 travel credits to members when the friend they referred listed their property for rent on their platform.
How could they have made it more attractive?
Airbnb admitted that the earlier referral program 1.0 was not as successful because it was so poorly promoted that some of their staff were not even aware of it. While they implemented a great deal of promotion with the re-launched referral program to achieve tremendous success, there is still more the brand could have done to make the program even more attractive.
The brand could have made its program better by utilizing a solid content marketing strategy that would set it apart from competitors and increase customer engagement. Instead of focusing on press releases, product updates, company updates, and case studies that users ignore, they could have attracted new customers by sharing amazing experience stories of their hosts and travelers. They could have published shareable personal content and evergreen content such as guides and reviews that provide exceptional value while enticing new members to join the community. Airbnb could have shifted its content strategy to User-generated content by sharing real-life stories of travelers and hosts’ experiences using the platform. It would have increased brand awareness, solidified their community relationships, and increased their profit in the long run.