Learning from some of the biggest online companies.
Nielsen study says, word of mouth marketing is 92% more effective than any other form of marketing.
The bottom line is: If you want your business to survive and thrive, get people talking about your product. More than that, get them to refer your product.
Even in the app landscape word-of-mouth marketing or referral marketing has proven its mettle, time and time again in driving app downloads. From DropBox, Airbnb, Uber to Evernote, referral marketing has turned out to be one of the most important pillars on which edifice of their success stands.
1. DropBox Referral Marketing Program
With a staggering 3900% growth rate, Dropbox is reckoned to be an all-time referral marketing champ. The company had just 1,00,000 registered users in 2008, which climbed to a staggering 4M registered users within a mere 15 month period, thanks to its straightforward referral program.
How did they do it?
Dropbox offered both the referrer and the referred a free 500 MB space on every successful referral. It’s called reciprocal incentive in the customer referral lexicon. Meaning, customers would refer your brand to their friends and family only if you give them something substantial in return. The referral program resonated well with the users and rest, as they say, is history.
2. Airbnb Referral Marketing Program
Though Dropbox engineered an unheard of growth rate through referrals, but then, Airbnb’s referral program is touted to be the best in the world. Founded in 2007, the company is today valued at over $25 billion, thanks to its double-sided referral program.
How did they do it?
Airbnb offered both the referrer and the referred $25 travel credit, on the grounds the new member completed his/her first trip. This was a quite a calculated approach by Airbnb as the referrer was paid only when the new user made a purchase. This ensured they weren’t putting money into any unprofitable referral schemes.
Plus, they offered an additional $75 credit when the referred hosted a guest the first time.
The program was a runaway hit, helping Airbnb double its users each year since 2012. The company is also said to have made the most of the recommended contact feature available in Gmail and Android APIs, which resulting in higher conversions.
Few things Airbnb ensured while sending out their referral invites:
- They A/B tested their referral invites to ensure their referral invites sounded as gifts rather than promotions.
- The language of the invite was altruistic, given that altruistic emails enjoyed far more success ratio than outright promotional emails.
3. Uber Referral Marketing Program
Uber’s referral marketing program had become so popular that today every cab and ride sharing app is duplicating it, be it GRAB TAXI, LYFT, SIDECAR, or GET AROUND.
Uber also follows a double-sided referral scheme akin to Dropbox and Airbnb. Nevertheless, the chief attraction is the drivers’ referral program. The drivers are considered to be valued partners of Uber and are offered $5 cash for every new rider they bring on board.
How did they do it?
Every Uber driver is offered a promotional code which is passed over to the potential So whenever a new buyer sign-ups for a driver’s account using the former’s promotion code they get linked to his account.
And when the new driver completes his first ten trips, and if you are the first driver to refer him, you are entitled to $5 cash.
Any new rider using your promotional code will get $20 off on their first ride.
You gain $5 cash in return every time your promotional code is used by a first-time rider.
4. Evernote’s App Referral Program
With a valuation of more than $1 billion, and with more than 100 billion worldwide users, the popular note-taking app has also launched a popular double-sided refer-a-friend program.
How did they do it?
Both the referrer and referred are rewarded when the later successfully completes a user sign-up. In return, the former wins Evernote Points. The referrer is entitled to use his earned points toward premium subscriptions, increase in monthly upload limit and so on.
On the other hand, for signing up through your link, your referred – that is your friends and colleagues – would be offered a month of Evernote Premium for free, which means they could enjoy some powerful Evernote features like Offline Notebooks, smarter search, and more.
How to use a Referral Program Strategy
All these four powerful app referral marketing case studies is a testament to the fact that referral marketing is one of the best marketing strategies to boost business. In fact, it could be construed as a shortcut tool to built instant customer trust.
Nevertheless, new business owners and marketers shouldn’t apply this strategy as soon as the business is lauched. One needs to establish a loyal customer base first if they really want their referral campaign to hit the ground running.
A few selected tips to get your referral campaign up and running:
1. Establish A Loyal Customer Base and Then Target Them
Don’t target the entire customer base. It could turn out to be an exercise in complete futility. Rather focus on your most active customers, because they wouldn’t mind recommending you to his or her’s family and friends.
2. Employ Double-sided Referral Programs
All the above-mentioned app referral program worked fine because they leveraged double-sided referral strategy to a T. Like it or not, humans are selfish. (Sure, there are exceptions to this, but by and large, “what’s in for me,” is how the human mind works.) So, dangle the reward bait without any second thoughts, if you really want to your referral program to work.
3. Rope in Key Influencers to Promote your Referrals
Of the several clients joining your referral program, only a few would qualify as the key influencers. Find them and reward them handsomely so that they become the brand ambassadors.
4. Leverage Social Media to Promote Referrals
This goes without saying. It’s the age of social media, so if you want to really want to make your rewards program a success, leverage different social media channels. Even put your website and mobile site to work.
App referral programs are doing well. Dropbox, Evernote, Airbnb, to name a few, are just tip of the iceberg. But then, before you embark on your referral campaign make sure that you earn some goodwill, that is building a good loyal customer base first and foremost. It’s because your referral marketing campaign would literally be riding on their shoulders. And also, make sure you are targeting quality users who would interest in using your business in the long run. And before I forget: A/B test your referral schemes. There’s nothing such as referral marketing blueprint to follow. Tweak and tinker your referral programs as and when needed.
Article modified from Jini Maxin’s article written for Duct Tape Marketing Blog.