There’s a reason so many companies have turned to referral marketing – it works. With a refer-a-friend campaign, companies in all industries, and of all sizes, can see their market skyrocket. This word-of-mouth marketing works because the referral is coming from a trusted source. New customers hear about a new service or product from someone they know and love, and therefore, they’re more likely to follow through.
Think about your own shopping experiences. You’re more likely to pick up with a service if you know someone who has vetted the company first. You’re going in with good expectations, and are less guarded about the experience overall.
This is also a method that builds trust among all – with the new customer, and with the existing customer who, in the process, becomes more loyal to your brand. These are just a few reasons that refer-a-friend campaigns are a win-win experience. In referral marketing, everyone comes out ahead. Meanwhile, templates can help make the whole program simple and easy to run.
Need more proof?
- Companies that use referred customers have a 70% higher conversion rate, and a 69% faster close rate.
- When referred by a friend, customers are four times more likely to purchase.
- And on the flip side, 28% of millennials said they won’t buy if their friends don’t approve.
Friend approval matters to customers, and starting a refer-a-friend campaign is a proven way to capitalize on these consumer habits.
The best refer-a-friend campaign ideas
The best refer-a-friend campaign ideas come with a reward – something to motivate both parties in order to sign up. The reward serves as an incentive for the new customer to sign up, as well as the existing customer to get others on board. Rewards can vary from money, to free product, to a discount or money off a service, to even a free month of access to a higher tiered service. This is a smart and effective way to offer a customer referral program.
Brands who have embraced the referral reward have found growing success in their refer-a-friend campaigns. And, because money doesn’t leave your hand until the new business is closed, there’s no need to worry about outside costs. Just fresh funds coming in, allowing your business to grow with the help of referrals and warm leads.
Store credits or subscription credits
Consider offering store credit or subscription credits to customers as a referral reward. This is a great option as it encourages customers to sign up for more of your services or products. Pump their reward back into your brand by offering them a deal. In addition, it’s an affordable way to provide a reward. Because you’re simply offering a discount, it will take little out of the company’s pocket.
A store credit or subscription credit can be used on both ends of the referral, too, motivating both sides. The existing customer and new lead alike are both incentivized to move forward with your brand. Another scenario that’s win-win.
Tiered referral rewards
A tiered referral reward system gives users the chance to earn on different levels. Allow them the opportunity to earn more by reaching a bigger target number of new leads. This can be an added incentive to get customers to draw in more users. Then, they can earn a gift card or Amazon spending spree, and so on. You’ll be surprised at how big of an influencer this can be for your brand.
Alternatively, you can offer a larger reward for their first referral, then smaller rewards going forward. For instance, customers get $50 for their first referral, then $15 for all subsequent referrals. This method has been proven to work by showing an initial shock factor that excites, then still rewarding customers for new leads. Stats also show that after the first reward, the customer has solidified their loyalty, motivating them to keep bringing new leads for your brand.
In many cases, tiered referrals reach a maximum earning potential (where the referrer eventually reaches a maximum amount of prizes from their successful referrals.) However, that doesn’t have to be the case. Choose a dollar amount or a product that makes the most sense for your brand, and offer tiered rewards for customers who refer a friend.
Social gifting – giving a reward to a friend
You can also reward customers by allowing them to gift their friends. Social gifting means the referring customer won’t receive a reward, but their friend, aka the new customer, will. This is a great way for customers to reward their friends and pass along something fun and exciting. This might include a free gift with purchase, a percentage off, store credit, or another reward. This refer-a-friend campaign idea is a great way to entice a new customer, and get your referrer to feel good about their connection.
Donations to charity
By giving back to those in need, you can excite customers by letting them put their efforts toward a good cause.
TOMS notably did this by launching their brand that gave a pair of shoes for every pair purchased. The same with Bombas and socks. Both brands cited a need for quality footwear in certain communities, and vowed to help fill that need by giving back to the masses. Allowing customers to join in on the fun only helped the cause. For every pair sold, a pair is donated.
Or maybe you’d rather take a more direct approach and give funds directly toward a charitable cause. This can be offered as a reward incentive for referring customers. When their lead signs up, instead of earning cash in their pocket, they give funds to someone in need.
This is an effective method as it reaches customers right in their feelings. They feel good about helping others, and are therefore more likely to continue with the refer-a-friend campaign.
Partner with a charity that makes sense for your brand – like with TOMS and Bombas working to provide footwear. Or, give customers a choice of where their donation funds will land. Either way, this provides a viable reward and incentive to draw in continued warm leads with your friend program.
Surprise mystery rewards
Who doesn’t love the allure of a good mystery?! Customers can be incentivized by the idea of winning a prize that is still unnamed. As the brand, this offers you some freedom to switch up prizes by what makes sense at the time. This is a great referral campaign idea for many reasons. If you have a seasonal product, you can hand it out in your referral marketing program. Or if you’re a stock brand, like Robinhood, give customers a stock credit to something that’s popular at the time. This creates a reward that’s high in value to the customer, and therefore, well sought-after. Remember that customers should be excited about what they receive, and are likely to discuss it online or on social media, so you won’t want to disappoint their expectations.
The referral marketing strategy appeal of earning a “mystery reward” is a huge perk in its own right. Customers will be intrigued and may even refer friends just to solve the mystery. (See what we mean about a great marketing tool?) This is a fun marketing game that excites consumers to refer, just by creating an unknown reward.
This method is best used on referring customers, while new leads may be less appreciative of such offers. That is, until they become better acquainted with your brand.
When enticing current customers, giving them VIP treatment can be a surefire way to get their attention. They’re already invested in your brand, so encourage them to take the next step. Referral rewards can include exclusive or early access to sales, VIP customer support, free products, first access to new offerings, or a free month of add-on service.
This has the added benefit of showing customers how invested you are in them (ideally, further enticing them to send in referrals, getting them to make more purchases, or convincing them to upgrade.) But it’s also a cost-effective way to offer rewards to your customers. Because the reward goes back into your own pocket, you’re spending a small fraction on each customer reward.
Consider cashing in on this excitement and offering exclusive memberships as part of your refer-a-friend campaign. You can even kick it up a notch, and offer the highest-tier rewards of your club for your top 25 or 50 customer advocates.
Service and/or software upgrades
Upgrading their service is another way to reward customers – and show them what else you have to offer as a brand. Offer them more for bringing in a referral, and you can provide a valuable piece of motivation to the customer. Better yet, the upgrades don’t cost your brand.
For instance, Dropbox offers customers more storage data for each referral. This is a great way to reward the customer for their efforts, without putting a dent in the company’s bottom line.
Customers will be excited to try out the next level up. So, the allure of the “upgrade” can do wonders all on its own.
Sometimes, keeping it simple is the way to go. Easy rewards get customers excited and riled up about sending in referrals. Don’t shy away from this method – if it’s easy and it works, what’s the holdup? Especially when it can greatly expand your customer acquisition in your ideal demographic.
Cash rewards, discounts, etc. can all entice the customer to send in referrals. You can put a cap on how much a person can earn in a certain timeframe (or overall), but you’ll likely find that the new business far outweighs the referral fee. Reward customers for repeat referrals to keep them sending in leads through digital marketing and beyond.
Perhaps one of the only things more exciting about getting a reward for your business referral is winning a contest! Set up a refer-a-friend campaign in which customers can compete to win. You’ll be surprised at how much momentum you can drum up from this competitive style contest. Customers will be hyped up about winning, and it will entice them to invite more friends and family members to sign up for your services. Users can win based on the number of referrals they bring in; keep track by giving them a referral link that’s unique to each user.
Consider launching a contest in which customers can work to win a grand prize. However, only one person can win big, so it’s a good idea to create tiers of winners. Perhaps this means a second and third prize. Or maybe it also means all customers who bring in X referrals receive a level of reward. In fact, contest programs that receive the most success have customers who all get a small reward for each referral, but then compete for the biggest-ticket reward as well. This is one of the biggest ways to create serious traction with your refer-a-friend campaign.
Take the excitement of building on a referral contest and take it up a notch, and you’ve got gamified rewards. This is a version of a refer-a-friend campaign where you create levels of rewards for the customer, and therefore, levels of enticement. By reaching different tiers of rewards, customers will be excited to keep playing the game. And that game just happens to be bringing in referrals for your brand.
Make it fun by naming the levels and creating badges that customers can proudly earn. Each level can earn various rewards from your brand, whether they be monetary or freebies from the brand.
For instance, Uber has levels of rewards, where customers earn more with the more they use the app. You can incorporate a similar mantra with your refer-a-friend campaign, thanks to levels of rewards. It’s a step that encourages friendly competition. By playing against one another, customers will not only have fun, but you’ll gain more referrals. This is just one more exciting idea in the world of referral program ideas.
Don’t forget to promote your referral program!
A solid refer-a-friend campaign idea isn’t enough for success on its own. Sure you have the basics in place, but the refer-a-friend campaign won’t just run itself. Be sure to promote your program so customers know it’s active. Promoting the campaign also ensures customers can reach it and are able to participate.
Promote your program on your website, through social media, by sending emails, SMS, or newsletters, and telling customers about the program. Choose a marketing program that works best for your brand, or choose a well-rounded approach in order to reach as many referrals as possible.
It’s always a good idea to promote your referral campaign when customers are most satisfied with your brand. Once they’ve made a purchase, when talking to customer service, etc. – these are all good times to reach out to customers. You can also email them to check-in. This is a great time to remind them about the program, and what they can get for their efforts.
For more information on how to promote your referral campaign, check out this in-depth article that can help you take your marketing up a notch.
Creating a refer-a-friend campaign can be a great way to grow your business through referral marketing campaigns. By gaining warm leads from happy customers, companies of all sizes, and in all industries, have been able to greatly expand their reach, and increase the number of satisfied customers.
Consider offering a reward that will most likely reach and entice your customers in order to find success in this market. From creating a tiered reward system, to a competition, to rewards that give back to charity, you can find a way that best reaches your market subscribers.
Consider implementing these smart ideas to help scale and grow your business, while exciting a loyal customer base.