In a world where startups are raising millions of dollars every single day, it’s tempting for founders to want to try out every newfangled growth hack that the “experts” are touting.
Small businesses that don’t have an ever-flowing fount of cash, however, don’t have the luxury to do so. It is far better to stick to the tried-and-tested methods of getting customers, and referral marketing is as reliable as it gets.
Still, while big companies like Dropbox and Airbnb found big success with their referral programs, replicating their exact same strategy and referral message might not work for your business. For your particular product offering, you will need to find a way to make your referral program resonate with your target customers.
Thankfully, there are many different ways to offer a referral program. Some of these include offering discounts, product giveaways, exclusive deals, gift cards, QR code menus, and even cash.
Activewear brand, Bandier, encourages repeat business through a referral program.
Upon referring their friends, happy Bandier customers will earn $25 in points when a friend makes the first purchase. The referred friend also gets $25!
And it doesn’t just stop there. Referring customers will continue to earn points for any succeeding purchases that their referrals make. What’s not to love about unlimited rewards?
Why this works
Clearly, such a program would be extremely attractive to any existing customer. If they are loyal to your brand and truly believe that it is one of the best, then it’s a no-brainer to tell their friends about you.
On the flip side, a point system encourages the advocate to make more than one referral so that they will have enough points to redeem their rewards. Naturally, more referrals lead to more chances of landing new customers.
It is also a great way to reward customers with a limited budget. The key lies in making sure the “exchange rate” makes it worthwhile for both you and your customer.
Upserve has an interesting twist in its referral program. Whenever a user refers a friend and that friend signs up, the company donates $200 to the Clean Water Fund.
This approach appeals to a different source of motivation to activate users and customers. It’s been scientifically proven that doing good things for someone else gives the giver greater happiness than just doing it for self-gain.
As the saying goes, “Giving is better than receiving.”
In fact, one of Upserve’s values is “to impact our community in a meaningful way.” As such, their referral program is simply a natural extension of that.
Why it works
When given the opportunity, most people would be inclined to do their part for charity.
In some cases, people choose a company not just for its products or services, but because of what they stand for.
If you have a specific mission to make the world a better place, then this is the program that will help your business achieve that goal, and gain customers at the same time.
3. Scribe Writing: Show them the money
A book publishing company called Scribe Writing gets straight to the point, and offers $2,000 for every referral made.
Authors who have already published a book with the company can refer other authors. If they sign up, the referrer gets the money in cash, or applied as credit to their Scribe Writing account. There’s also a third option to donate the referral reward to charity.
With this strategy, Scribe Writing leverages its customers’ network to get more authors to publish with them. After all, like attracts like.
The monetary reward is compelling, and new authors are more likely to trust other authors who have experienced the service and recommend it.
Why it works
The possibility of earning actual money with the referral program is a big game-changer. In fact, a Harris Poll survey says that 77% of Americans prefer cash as a reward in exchange for referrals.
To be sure, not many small businesses have the cash to splash out on a program like this, so you need to have a solid strategy if you want to make this worth your while.
4. Greats: Be generous with credits
The online sneaker shop, Greats, rewards both referring customers and referred friends with $10 in credits when the new customer makes a purchase using the referral link.
Greats markets their brand to millennials, who are known for being socially motivated, generous people.
Giving credits to both parties—not just the referrer—is a great move from a company that understands their customers and how to earn their loyalty.
Why it works:
Credits, whether given to either or both advocate and referrer, is a great alternative to cash or other product giveaways that might be too costly. Also, they will end up using the credits at your store, earning you a customer in the process!
No matter how small or big the credit is, customers will always appreciate a price cut. If they are happy with your product or service, then free credits might just be the push they need for them to tell their friends about your business.
Riff Raff's method was indeed mindful of its customers—busy moms and dads who spend most of their time at work or taking care of their children.
However, Riff Raff also understood that these same people are not too busy to check Facebook or Instagram, and can certainly spare a minute or two - especially if there's a desirable reward in store. Plus, parents of young children tended to talk to other parents—to share resources, knowledge, and especially product recommendations and referrals. Word of mum can be really powerful.
Knowing your customer's online habits along with their motivations is vital for the success of your referral program. You have to know where these customers arespending their time, and be there for them.
6. Sam's Club: Show the love with gift cards
Online retail store Sam's Club encourages their members to refer friends in exchange for gift cards (for both new and referring members).
The existing member will get a referral link that he or she can share with friends. For each referral who joins the club, a $10 gift card is sent to the existing member and a $20 gift card is sent to the referral.
Why it works
Similar to credits, gift cards ensure that your customers and their referrals will keep coming back for more purchases. It's better than a cash incentive, because it can only be used for your business and nowhere else.
These digital credits are also a sure way to generate a quick sale. Even when a person has no plans of buying, he might go ahead and do it anyway simply because he has a gift card (which usually has an expiration date).
If your business doesn't have the budget to give away products or cash incentives, then gift cards are the next best thing.
7. Skillshare: Offer a taste with free premium access
Online education site Skillshare freely offers interested parties the gift of learning with a tantalizing referral program.
When a Skillshare student refers a friend, that fortunate friend will get two months free access to Skillshare Premium. When the friend continues with a paid plan, the referring student gets a free month.
Why it works
Online courses are all the rage these days. It's never been easier to learn anything from the comfort of your home.
Skillshare makes it even easier with this generous referral program. Whether or not the referral converts into a paying customer, that person will still get to know Skillshare's service and might even recommend it to others.
One of the best ways to win over a customer is when you show them all that you have to offer with a “trial” of your product or service.
8. ConvertKit: Establish your authority with free webinars
ConvertKit is an email marketing service provider that is popular among bloggers and business influencers. They are also well-known in the email marketing space, regularly publishing helpful content.
As part of its referral program, a ConvertKit subscriber can share a webinar that is hosted by ConvertKit's marketing team.
During the webinar, ConvertKit will pitch their service, and if someone signs up through the webinar, the referring member will get a cash incentive as a reward.
Why it works
In itself, a free training webinar is a great offer, even if the participants have no plans on signing up for ConvertKit. It might be free, but it offers valuable content that ConvertKit is known to be an expert in, and can clearly demonstrate through the training.
This is a great example of how you can share knowledge instead of discounts, and slowly build trust with your audience. ConvertKit understands that people may not think they need their service, when in fact they just are not aware of the benefits and how much it can help them.
If your business helps people solve a specific problem, then offering free consultation, webinars, or coaching in exchange for a referral makes a lot of sense.
9. The Radio Academy: Just give away awesome stuff
The Radio Academy is a charity dedicated to radio development. As part of its strategy to get new members, it hosts a regular raffle draw.
Existing members need to refer their friends. When that’s done, both the member and his or her friend will be entered into the draw, and get the chance to win an Amazon Echo.
Why it works
Raffle draws and giveaways can be exciting to the right audience, especially if the prize is something that they really want.
Giveaways have been proven to achieve business goals, especially if done right. The monetary investment you make upfront might be a small amount to pay for new leads and sales that will come in.
When hosting a giveaway, be sure to pick a great prize, make it easy for people to join, and find the best way to announce it to your audience.
10. Threadbeast: Reward them with your best stuff
A curated wardrobe delivery service, Threadbeast entices new subscribers with awesome bonus packages for both referring member and referral. There’s no limit to the number of referrals, which means the referring member will get a free package for every successful referral, forever and ever.
The great thing about this program is that both sides get something for free. It’s a generous move, but also a great way to motivate existing customers to bring in a surge of new customers.
Why it works
Everyone loves to get free stuff. If people are already buying your products, it means they probably want more of it. That can be enough for them to participate in your referral program.
The key is to give them best-sellers or limited edition items to make it even more appealing. Make them feel that this giveaway is made especially for them for taking the time to refer a friend.
Don’t follow the crowd
Referral programs can be instrumental to your business’s growth, but you have to get it right.
Looking at these examples, you might say that a successful referral program is a good mix of creativity, customer research, and great product offers.
If you are able to nail these elements and craft your own program, then you’re off to a good start.
Here are a couple of articles that we think might help you to optimize your refer-a-friend program:
Daniel Tay is a content marketer and writer. As the founder of With Content, he helps companies to create quality content that resonates with their audience of choice. With over 5 years of experience in content strategy and marketing, his writing can be found on websites such as Hubspot, Search Engine Journal, and Tech in Asia. You can find Daniel on LinkedIn or Twitter.
A referral program is a deliberate, systematic way of getting people to make referrals to your business. Referral programs are often called word-of-mouth marketing, because they reward existing customers for sharing and incentivize new customers to try out your brand.