Online referral programs are beneficial for both companies and their loyal customers. By participating in these programs, businesses can gain new customers, and the referring customer can earn cash, credits, and discounts when their referral is successful. Nevertheless, it is important to note that not all referral programs are equal in terms of rewards or desirability.
In this post, we will discuss the distinction between referral marketing and affiliate marketing and examine some of the top referral programs available.
What is a referral program?
A marketing strategy employed by businesses to boost customer acquisition is the referral program. This program incentivizes current customers to refer their friends, family, or acquaintances to the business, utilizing their trust and social networks in exchange for a reward or incentive.
A referral program generally operates by providing existing customers with a distinctive referral code or link that they can distribute among their friends or family. When someone uses that code or link to make a purchase or subscribe to a service, the customer who referred them receives a reward, such as a discount, cashback, free product, or some other form of incentive.
Referral programs are known by various names, such as:
- Advocate program
- Customer reward program
- Invite-a-friend
- Loyalty program
- Refer-a-friend (RAF)
- Rewards program
Referral marketing vs. affiliate marketing
Referral and affiliate marketing fall within the broader category of performance marketing, but they possess distinct characteristics. Affiliate marketing involves online promotion of products and services by individuals such as content creators, bloggers, and YouTubers who typically work full-time. Affiliates receive compensation from companies for generating leads and driving sales.
Considering the disparities between referral marketing and affiliate marketing, which option would be more suitable?
If you do not want to concentrate on content creation but still wish to occasionally share deals with your friends and acquaintances, it is advisable to promote referral offers. However, if you are interested in generating extra income through content creation, either part-time or full-time, affiliate marketing is the suitable option as it allows you to earn money passively.
Our Top Picks
Glossier
Thanks to their robust referral program, Glossier has emerged as a must-have beauty provider for millennials and Gen Z. Featuring skincare, fragrance, and beauty products, this online retailer has garnered a significant following.
When a referred customer clicks on a personalized referral link, creates a new account, and places an order, advocates receive a $10 store credit. However, the discount will only be applied if all three steps are completed in the same website session. Glossier’s website offers referrals a 10% discount on their first purchase as a reward.
Amerisleep
Amerisleep offers memory-foam mattresses made from natural materials for purchase on their website. When customers refer others to order a mattress through a unique link, they receive a $75 prepaid Visa gift card. Additionally, there is no restriction on the number of people a customer can refer, meaning the more links they share, the greater the potential reward.
Merisleep offers customers the option to access their “referral stats,” providing a gamified experience for the referral program. Allowing customers to measure their rewards as advocates generates a feeling of accomplishment, driving them to refer more friends in order to witness an increasing payout. You may want to consider providing customers with a dashboard to monitor their referral progress.
MOO
Moo is an online company that specializes in printing and design services. They provide a variety of products, including business cards, stationery, flyers, and postcards. Moo’s referral program offers two ways to receive rewards. By referring a friend, customers have the chance to receive a $20 gift card. If they refer a business with at least 10 employees, the reward increases to $150. When individuals referred by customers sign up, they receive a 25% discount on their first order. In addition, businesses that sign up receive various benefits such as a dedicated account manager, discount, and more.
By providing tiered incentives, customers can earn higher rewards depending on the number of referrals they make. By offering multiple options, you enhance the perceived value of the reward for customers in comparison to other tiers. However, it is crucial to explicitly clarify the distinctions between each tier and outline the necessary actions customers must take to earn these rewards.
Casper
Casper, an online mattress company, has a conventional referral program. However, occasionally during the year, the company provides incentives. One example is in 2020 when Casper offered a referral program at the end of the season, where customers were rewarded with a $75 Amazon gift card. Each customer received a unique referral link to share with their friends and family. If someone they referred purchases their first Casper mattress using the provided link, the customer receives the gift card while the referred person enjoys a 20% discount on their purchase.
Brooklinen
Brooklinen, known as “The Internet’s Favorite Sheets,” relies on their referral program for their rapid expansion. Customers have the opportunity to earn different rewards by completing specific tasks like following the company on Instagram or writing a product review. The most appealing incentive, though, is the “Refer-A-Friend” promotion. Both customers and their referrals receive a $25 discount on their next purchase of $100 or more when they take part in this offer.
Hostinger
Hostinger, a well-known web hosting provider used worldwide, offers its customers the opportunity to earn a commission of up to 20% for referring others. This referral program can be accessed through the Hostinger customer panel and allows the referring customer to earn a commission when the new customer purchases a web hosting plan lasting 12 months or more.
If the new customer uses the unique referral link, they will receive a 20% discount during checkout. The commission will only be given to the referring customer if the new customer maintains an active plan for at least 45 days.
Dropbox
With Dropbox, you can make use of a centralized and secure cloud platform to collaborate, store, sync, and share your files. As a result, you will be able to enhance organization within your family, streamline remote work, boost productivity, simplify the process of electronic signatures, and achieve various other benefits.
By inviting your friends to try Dropbox, you can earn extra space. Dropbox Basic users receive 500 MB for each referral, with a maximum of 16 GB. Dropbox Plus and Professional users receive 1 GB for each referral, with a maximum of 32 GB.
Fiverr
Fiverr is an online platform that links businesses with freelance talent that can be hired instantly. It provides a wide range of digital services in over 400 categories spread across nine verticals such as graphic design, digital marketing, programming, writing, translation, animation, and more.
Your friends who are referred by you will receive a discount of 10% on their initial purchase, with a maximum discount of $100. Subsequently, you will receive Fiverr Credits as compensation, with a limitation of $100 Fiverr Credits for each qualifying purchase. In total, you have the potential to accumulate up to $500 in Fiverr Credits.
Chase Bank
Chase is a part of the JPMorgan Chase financial services company and provides a wide array of financial services, which consist of personal banking, credit cards, mortgages, auto financing, investment advice, small business loans, and payment processing.
For each friend that opens a Chase checking account, you can receive $50, with a maximum annual earning potential of $500. Additionally, the reward offered to your referral will depend on the type of account they decide to open.
SoFi
SoFi’s purpose is to assist individuals in attaining financial independence and accomplishing their goals by developing financial products for borrowing, saving, spending, investing, and protecting money.
SoFi provides six referral programs that allow you to earn an amount ranging from $50 to $500 for a referral that is successful.
- App referral program
- Loan referral program
- Invest referral program
- Credit card referral program
- Checking & savings referral program
- Bank referral program
TurboTax
TurboTax enables taxpayers to retain more of their hard-earned money by providing user-friendly and straightforward tax software. It allows individuals to conveniently prepare and electronically file their tax returns using any computer or mobile device connected to the internet.
If you invite your friends to file with TurboTax, you will receive a $25 gift card for each referral, with a maximum value of $250. Additionally, your referrals will enjoy a discount of up to 20% on online federal products.
