Referral programs have become one of the go-to ways for businesses, particularly those in the e-commerce space, to generate more leads and boost sales. The standard referral program involves companies rewarding customers for sending a potential customer to them. However, typical referral programs have evolved due to advancing technologies, giving rise to newer and better options.
The two-sided referral incentive easily comes to mind as an excellent solution. While it sounds more expensive on the surface, it is likely far from that and might be a more effective customer acquisition strategy than the traditional referral method.
What are two-sided incentives?
As its name suggests, two-sided or double-sided referral programs reward both existing customers and newly referred customers. They are different from standard referral programs in the sense that 1) they offer rewards for referrals, and 2) they offer the referred friend a reward as well. Thus, rewards can either have the same value for both parties or differ depending on the retailer’s discretion.
With a two-sided referral campaign, you can divide the incentive for the referrer and their friend. For instance, you can give your customers 10% off their next purchase and a gift card for their referral with $20 to spend in your online store.
It is a great way to keep your customers motivated to keep sharing word-of-mouth. In addition, it offers your customers a chance to endow their family and friends with value through a coupon code or gift card. With incentives that benefit both parties, newly referred customers are more likely to continue the cycle by sharing word-of-mouth.
The effectiveness of two-sided incentives
Although you will need to provide incentives for both customers and their referrals, two-sided referral campaigns are worth the challenge. All you need is to find a good balance. Again, you don’t necessarily need to bother using up resources since you can cut off some discounts for referrers. For instance, if you initially offered 20% off to your members, you can offer 10% off to them and add a $10 gift card for the new customers they refer.
Two-sided incentives work so well because they give more people a reason to join your program or purchase your products. People cannot resist value. Once they see the value they stand to gain by joining your program; they will be more likely to embrace the opportunity. The best part about these types of programs is that each party benefits from a successful referral. Existing customers will not have to worry about appearing as self-serving people when sharing their referral links since they expose their friends and family to value. Two-sided incentives give referring customers a boost of confidence and a sense of ease, knowing that the brand will take care of their friends and family. The mere thought that their referral is receiving a perk and enjoying a positive experience is good enough to urge them to share with as many people as possible. As a business, this is an excellent way to maximize the number of referrals you can get.
The truth is that most customers are not motivated to profit off of their networks. If there is the provision of a reward for both parties (referrer and referral), then it levels the playing field for them. Two-sided incentives transform the way customers interact with your platform. Since you are appealing to a different motivation, such as being a good friend/family member by recommending a valuable offer and incentive, they feel more inclined to participate and engage the rest of their network in benefiting from the available rewards.
The referral process has become even more straightforward due to the digital wave. Customers can easily share their referral links via social media channels. This makes it enjoyable and interactive as customers can engage with the brand and their loved ones.
However, companies contemplating setting up a double-sided referral program should bear in mind that they need an efficient referral software tool that can easily track key metrics and give them the best out of the program. Customers often get excited by the idea of receiving a reward, but they feel demotivated when rewards delay or don’t arrive at all. It worsens when loyal customers refer their friends only to experience the business failing to send their prizes. As such, companies need to pay particular attention to the kind of referral software tool they use. It should enable them to manage and track new, pending as well as successful referrals. It should also be able to ensure the order and delivery of referral rewards to its program recipients.
Hospitality giant Airbnb developed a two-sided referral program that enabled the brand to achieve so much success and growth within a short period. The company offered $100 to their referring customers while the referred customer earned a $25 credit.
Uber is also noted for launching different referral programs; however, its two-sided incentive is arguably the most effective. The brand offered their users $10 to $30 while enabling them to gift Uber credits to whoever they referred. Thus, both parties benefit from the rewards.
How to setup a two-sided incentives referral program with Beans referrals
With the Beans referral program, you can reward your customers for bringing referrals into your business.
As a business owner, you can set up a referral program using the Bamboo app. When customers join, they get a personal referral link they can share with their friends and family. A referral is successful when a friend completes their first purchase using the shared referral discount code. Once this is done, customers earn their rewards when the first order is completed.
The Beans Referral App allow brands to set up two-sided referral incentives that will motivate referred friends to accept invites quicker. Users can activate the referral two-sided incentive rule in the Beans referral program to achieve this result. You can decide to offer more rewards to referred people and offer incentives for the referrer. It is highly recommended that you combine either the fixed commission or percentage commission rewards with the two-sided incentive to achieve the best of results in your referral program.
Beans allows you to build a high converting referral program that can offer your most valued customers incentives for becoming advocates. You can enable customers to track their referral status and rewards through an easy-to-create dashboard. Give them more reason to join your referral program with a well-designed landing page and timely email reminders to give referred customers a nudge to utilize their rewards and complete their first purchase.