At ReferralCandy, we’ve been running thousands of referral campaigns for several years now.
We often get questions from people asking, so what’s up with referral programs? What can you tell us about them? What should we expect?
We’re always looking for new and interesting ways to answer this question.
We trawled through the data of hundreds of our clients and identified 20 that we thought were most interesting. All of these referral programs have a referral rate of at least 2.5%, which we consider to be very healthy.
So what are some interesting facts?
1. Almost all (18 out of 20) high-performing examples used dual-sided incentives.
This fact can actually be flipped on its head – I find it surprising that two retailers actually managed to get large amounts of referrals without offering dual-sided rewards.
Interestingly, both of those products are in the same category (fitness wearables), and are relatively new and novel products.
So my theory is – these products did well despite a lack of a Friend Offer
The overarching rule remains – if you want your referral program to be successful, you should use dual-sided incentives.
2. There’s no particular industry that dominates in referral program performance
Among our top 20 list, we have…
- 6 ‘tech’ products – smartphone accessories, wearables
- 5 Fashion products – clothes, shoes, watches
- 2 Baby products
- 2 E-cigarette brands
What do these have in common? Closely-knit communities that share feedback with one another.
As a general rule, if there are communities of people who talk about your product niche – (eg. parent groups talking about children’s products, or tech communities geeking out about new products) then your product will probably benefit from a referral program.
3. There’s an even 50/50 split between cash and coupons as Referral Rewards for top performing referral programs
What works best for you is likely going to be something that is unique to your industry.
As we’ve observed before – it makes sense to give discount coupons only if it’s likely that your Advocates will make repeat purchases as your store.
4. The Monthly transaction volume of top referral programs roughly follows a power law – and all have over 300 transactions per month
While referral programs can be really powerful at amplifying and accelerating your word-of-mouth sales, they need an existing base of happy customers to start with.
All of our top retailers have a minimum monthly transaction volume of at least 300 products sold every month – and most exceed 1,000/month.
This makes lots of sense to us – for a referral program to do well, you want as many people to know about your product and your referral program as possible.
What else would you like to know about top referral programs?
We’re constantly looking for better ways to help people understand how referral programs work.
If you’re thinking about setting up your own referral program, check out what we can do for you at ReferralCandy.