referralcandy-referral-program-amazon-prime

“Amazon has a secret weapon in Amazon Prime.” – CIRP co-founder Josh Lowitz

The largest ecommerce player in the U.S. just launched a customer referral campaign.

This is a great move by Amazon because:

  1. Prime members are a lucrative demographic. A survey found that they spend almost twice as much as other shoppers on Amazon.com. They also order more times per year than their non-Prime counterparts.
  2. Referral programs are highly cost-effective: Enlisting new Prime members with a referral campaign makes a lot of sense since customer referrals are one of the lowest cost acquisition channels.

What does a referral program look like when it’s built by market leaders?

At ReferralCandy, my team and I have been studying the data of thousands of referral programs. We pore over the data to figure out what works and what doesn’t.

So you can imagine how stoked I was to get the opportunity to study how Amazon, the market leaders in ecommerce, crafted their referral campaign. (After all, Prime has been cited as a great example of a loyalty program, so the folks over there clearly know what they are doing.)

I signed up for an account and was ready to be blown away.

Prime’s referral program does some things very well.

1: Amazon uses an evocative header image to draw you in.

amazon-smiling-people

Don’t you want to be like these happy smiling people?

Pictures communicate much more information than words do.

This particular depiction of cheerful, attractive people lets you know how you and your friend(s) will feel when you make the referral.

It’s a simple, effective reminder that you have friends that you share experiences with, and it’s fun to help.

Good call!

2: Effective use of social proof entices potential customers to give Prime a try.

amazon-referral-email

“Oooh, what’s this invite my friend is sending me?”

When you receive an email invitation to try Prime, Amazon makes it a point to emphasize who invited you.

This is a critical part of any referral program. Friends I’d send this email to might not have heard of Prime before, but seeing my name clearly in the subject and header would help them feel like this might be worth trying.

3: Clear Calls-To-Action on every page encourage visitors to move quickly to the next step.

All throughout the Portal, Emails and Landing Pages, it’s really clear what to do next. Strong calls-to-action remove the guesswork needed to figure out what the next steps are in the referral process. Reduced guesswork means a higher conversion rate.

  • Location: CTA buttons are obvious and centrally placed.
  • Contrast: Contrasting colors make them stand out from the background.
amazon-referral-cta

You want to click that big orange button.

4: Wide reach – Referral program accessible even to Amazon.com users who don’t use Prime

A large base of advocates is a key factor in running a successful referral campaign. Increasing the number of advocates in the campaign maximizes the chance that there will be Prime referrals every day. (After all, it’s unlikely that I’ll meet someone every day who needs a Prime membership, and I’ll bet that most advocates are like me.)

All you need to make a referral is an Amazon.com account. This gives their program wider reach and maximizes their number of advocates. Nice.

But… some parts of their program left me going “huh?”

1: The Value Proposition is unclear – who stands to benefit, exactly?

When I signed up and logged into the referral program I was greeted with the header “One more benefit of friendship”. My first thought: ‘Sweet! My friend and I get to benefit from our friendship.’

amazon-benefit

Kind of vague.

Digging around this site though, it became apparent that my friend wouldn’t actually get anything from being referred. The benefit of the friendship was the $5 credit for me. This caused a little confusion (since I thought friendship meant two-way) and was a bit of a let down.

You definitely want to be clear and upfront throughout your campaign to reduce friction in the referral process.

2: One-sidedness – No Friend Offer, only the advocate gets rewarded!

Following up from the previous point, it actually makes more sense for Amazon Prime to run a double-sided incentive program. This is when both the advocate and friend get incentivized in the referral process.

For stronger, established brands (like Amazon), a double-sided incentive works better since as a Prime customer, I’m not very price-sensitive on my next purchase. I’d much rather have part (or all) of my $5 go to my friends so that they would appreciate me.

The Effect of Reward Scheme and Brand Strength on Referral Likelihood

Show me the money! This was from a study by the University of Pittsburgh and Tokyo University.

3: A glaring red $0 is demoralizing for new advocates.

Every time I log into the referral portal, I’m hit front and center with the grim fact that I have earned nothing. A zero data world is a cold place.

When advocates are starting out, they wouldn’t have any credits yet and could use some motivation. I’d emphasize the steps they should carry out next instead of pointing out, in bold red, that they have $0 to their name.

amazon-referral-credit-earned

I think I’ve done something wrong.

4: Wasted opportunity to put the advocate’s name in the ‘from’ field

Prime’s referral portal lets me send friends a referral email by keying in their email addresses. If that happens to be a friend who hasn’t encountered Amazon Prime before, she’s going to see an email from a corporate entity, rather than somebody she knows.

She might ignore the email altogether.

referral-amazon-prime-email

Why is this “Amazon Prime” person sending me an email?

It helps that the subject starts with my name. But making it seem like the email came from me (since I did send it!) would be even better.

Rundown: It’s awesome to see Amazon using a referral campaign to tap into the power of word-of-mouth.

Up till now, the ecommerce giant hasn’t been the most social-friendly company (it’s ranked only 129th in the Social Media 300). Which is odd since their 35+ million customer reviews are the world’s first large-scale example of ‘social commerce’.

Word-of-mouth taps into the fundamental human desire to connect with people and share useful information. We’ve always believed this is how all information is ought to be discovered. A return to what is hardwired into all of us.

It’ll be exciting to see how Amazon’s referral campaign and social efforts evolve with time. Jeff Bezos has built the Amazon empire around the central question “What’s not going to change in the next 10 years?“. People have always had a deep-rooted need to discover and buy, not in isolation, but together.

Commerce can now only become more social.

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Header image source: Geekwire

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