What Is a Referral Program?
A referral program is a marketing strategy based on word-of-mouth that provides rewards to customers for recommending a brand’s products or services to people they know.
Companies incorporate this kind of program into their customer retention and acquisition strategy in order to increase traffic. The incentives encourage eligible prospects to maintain business connections with the company and generate additional referrals.
To encourage referrals to complete their purchases, most companies also provide discounts or complimentary items.
Referral Program vs Affiliate Program
Many companies choose to implement affiliate marketing programs in addition to customer referral programs.
Both the referral program and the affiliate marketing program share a common objective of boosting brand visibility, driving sales, and acquiring more customers. However, the primary distinctions lie in the participants involved and the incentives offered within each program.
7 Crucial Aspects of A Successful Referral Program.
- Understand your consumers. Acknowledge the ever-changing trends and preferences amongst your consumers. Doing this will help you choose a reward aligned with what your audience would want.
- Customize your referral program. Most referral program software will offer countless styles, templates, fonts, and designs for you to experiment with. Make your referral program appealing to your customers to grab their attention.
- Choose your referral software. Opt for referral program software that is known to create high-quality, attractive referral programs. You also want to make sure the software you choose has everything you need, eliminating the stress of having to settle.
- Capitalize on happy moments. When your customers are satisfied with your brand, that’s the perfect moment to hit them with your referral program. For digital companies, promote your program after customers join your platform, sign a contract or provide positive feedback, etc.
- Be clear and concise. Confusing your customers with complicated terms and drawn out sentences won’t keep them interested. Use brief sentences, powerful words, and keep it simple.
- Make your reward accessible. The best rewards are ones that users can instantly access. You want to avoid making it hard to use the reward or receive it.
- Thank your customers. Show gratitude to your customers by thanking them for their referral. Your customers will feel appreciated and acknowledged by your brand.
The Top Successful Referral Programs.
1.Airbnb .
Airbnb sets a great example for referral programs, not only for small businesses but for all kinds of establishments.
Here is what this popular web-based lodging platform, which was featured on the list of best referral marketing platforms in 2019, did today.
How Airbnb’s Referral Program works.
To refer friends to Airbnb, a user can provide them with a referral link which must be used by the friend during the sign-up process.
Afterward, the person will be granted a maximum credit of $45 for their initial stay. Furthermore, they will be given $17 towards an Airbnb Experience, as long as it amounts to $56 or above.
What to Take Away From Airbnb’s Referral Program.
The successfulness of this referral program demonstrates that lucrative referral marketing can be achieved without necessarily implementing two-part incentive programs, which consist of rewarding both the referred individual and the referrer.
First and foremost, it is crucial that your incentive is both valuable and easily accessible. In addition, Airbnb incorporates high-quality content into their referral program, creating a friendly and welcoming atmosphere.
2.Uber.
Uber’s two-part incentive program is widely regarded as one of the most lucrative referral programs, unlike Airbnb.
Uber has already addressed a prevailing issue by offering trustworthy, convenient, and cost-effective transportation. However, the company went beyond that and introduced an extremely advantageous referral program. Let’s take a closer look at how it operates.
How Uber’s Referral Program works.
Upon joining Uber, users are provided with a personal referral code which, when shared with a friend, necessitates the friend to sign up and create an account utilizing that code.
After going through the thinking process step by step, when the rephrasing of the text is completed, the next trip for both the person referred and the person who referred them will be provided without any charge.
This serves as an excellent illustration of an unbeatable referral program. People who haven’t used Uber before have the opportunity to experience it without any cost, while those who are already users can avail themselves of a complimentary ride.
It is advantageous for both sides!
What to Take Away From Uber’s Referral Program.
Uber’s incentive is ideal because a complimentary ride is always beneficial and convenient for their customers.
Users receive their reward instantly, and the terms are easy to understand.
When creating an effective referral program, it is important to consider these essential components. Uber has established itself as one of the top apps for referral programs.
3.PayPal.
In my opinion, PayPal’s referral program is the top choice for me.
The financial platform on the internet provided money to its users as a reward for referring others.
Indeed, that’s correct, we’re talking about physical currency here. The intention isn’t to imply that Paypal is making users wealthy, but hey, receiving money without any cost is a good thing! Now, let’s examine what they accomplished.
How PayPal’s Referral Program works.
In order to take part in this referral program, individuals are required to send one cent to a friend who does not possess a Paypal account.
In order to proceed, the friend needs to take the following actions: firstly, they must register with Paypal, then they need to link their card or bank account, and finally, they must make a purchase of $5 within a few months.
After the referred person spends the $5, both the referrer and the referred person receive $10, which makes PayPal’s offer quite attractive in my opinion.
4. Swagbucks
- Reward: 10% of the referral’s earnings
The platform of Swagbucks is designed to connect companies in need of gathering consumer insights with individuals who are interested in participating in surveys or reviewing products.
Users can earn SB points on the platform, which can be exchanged for gift cards and PayPal coupons as rewards.
Users can earn 10% of the SB points of their referrals by inviting friends to join Swagbucks. The referral process has no limit, meaning the more your referrals use Swagbucks, the more you will earn.
If your referral successfully earns 300 SB within the initial 30 days on the platform, both you and the referral will receive a 300 SB bonus as part of this referral program.
5. SoFi
- Reward: $20 worth of reward points per referral (up to five referrals)
SoFi is a personal finance application that assists users in handling their money, be it for savings or investment purposes, and offers loans for students, homebuyers, and personal needs.
SoFi provides six distinct referral programs, with the app referral option being the easiest.
When redeemed for SoFi Money, Checking and Savings, Invest, or Load products, this program provides referrers with 2,000 reward points valued at $20. Conversely, the referral will receive 1,000 reward points valued at $10 for the redemption of a product.
In order for the referral to be considered successful, your friend must follow these steps within 24 hours of clicking the unique referral link: download the SoFi app and register at SoFi.com. You are eligible to receive rewards for up to five successful referrals.
SoFi also offers additional referral programs.
- Loan Referral Program
- Invest Referral Program
- Credit Card Referral Program
- Money Referral Program
- Bank Referral Program
6. Google Workspace
- Reward: $8 to $23 per user
Google Workspace is a renowned platform for online work collaboration that comprises of services such as Gmail, Google Meet, and diverse online document sharing services like Google Docs, Sheets, and Slides.
To participate in the program, you must complete a sign-up form. Depending on the Google Workspace plan of the person you refer, Google will provide you with cash rewards as follows:
- Business Starter – $8 per user
- Business Standard – $15 per user
- Business Plus – $23 per user
The reward is based on users, as a Google Workspace account can have multiple users. For instance, if a referral signs up for a Business Starter plan with 20 users, the earning will be $160.
To avoid the limitations set by this referral campaign, you can choose to participate in their affiliate marketing program and refer a larger number of individuals without any restrictions. The referral campaign currently imposes constraints, allowing a maximum of 100 users per referred account and a yearly limit of 200 users.
The availability of the Google Workspace referral program is limited to 24 countries, with participants based outside of the United States receiving a varied monetary reward corresponding to their own country.
7. Tesla.
Tesla has modified their referral program over time to meet the changing demands and desires of their customers, considering Elon Musk’s innovative ideas.
Tesla, a company known for its exceptional range of electric cars, also offers an impressive referral program. Now, let’s take a closer look at what Tesla’s referral program entails.
How Tesla’s Referral Program Works.
Tesla had a very generous referral program before their new referral program was introduced. The referred individuals and the referrers were provided with six months of free supercharging. With each new referral, the referrer received rewards such as high-quality wheels, an opportunity to witness a rocket launch by SpaceX, Powerwall batteries, and various other incentives.
The reward for Tesla owners improved as they generated more referrals. Upon reaching five referrals, they were granted a discount on the Roadster for each referral. Eventually, a modification was made to the referral program, offering those who obtained sufficient referrals a complimentary Tesla Roadster.
Tesla later decided to shut down this referral program due to the belief that it was not sustainable and the fact that providing free cars proved to be excessively costly.
Today, Tesla’s referral program, although less generous, remains effective. Owners of Tesla cars have the opportunity to share a referral link with potential Tesla buyers. In order for both the referrer and referred party to receive 1000 miles of free Supercharging, the prospective buyer must purchase the latest model of either the Model S, Model X, or Model 3 Tesla.
Additionally, every month the referrer has the opportunity to win a Model Y Tesla, and every quarter they have a chance to win a Roadster supercar. Owning a Tesla sounds extremely delightful!
