When Steve Jobs quoted Picasso’s “Good artists copy; Great artists steal,” he meant, ‘get inspired by great work and implement some elements of it in what you do’ & not ‘blatantly steal/plagiarise.’
We mean the same thing when we say “referral program examples you can steal.”
It’s about not reinventing the wheel and implementing what works. Referral programs work — you know that if you read our previous blog post or this Bees Mission case study. But there are endless ways to implement a referral program, aren’t there? You can give gift cards, coupons, free products, reward points, cash, a trip to Miami, and whatnot.
What’s best and what’s not? That you can understand by reading about other companies’ successful referral programs.
Here are 9 of our favorite referral program examples to get inspired from:
The first phase of the Airbnb referral program was an unexpected success. They just created it and let it be; they never cared to promote it. In fact, many people working at Airbnb didn’t know such a program existed.
Soon Airbnb realized the referral program was bringing millions in revenue. That’s when they doubled down on creating a one-of-its-kind referral program.
Airbnb created Referral 2.0 around a decade ago for the then increasingly popular mobile users and, of course, web users. It allowed users to seamlessly import their Gmail contacts and send personalized emails to those contacts. In fact, and this is borderline illegal if you consider the talks around privacy these days, they also developed a program that tracked other contacts’ behavior to give existing users a list of contacts who are most likely to sign up with their referral link.
After building a considerably perfect referral program, they undid their previous mistake — they promoted the hell out of it. Of the many things they must have discovered during the whole Referral 2.0 journey, the most interesting one is the result they found after A/B testing the copy: Apparently, the altruistic message “give your friends $25 to travel” motivated more referrals than “invite your friends, get $25.”
Overall, this campaign drove 900% YOY growth for first-time bookings and 300% referral sign-ups.
- Always have a referral program. It’s perhaps the most cost-effective & high-value marketing machine for your business.
- Evaluate and better the program’s success by A/B testing.
Interesting fact: It took 5 full-time experts, 30,000 lines of code, and 3 months to develop Airbnb Referral 2.0. Today, you can have an even better referral program in less than a couple of minutes with Social Snowball (If you’re on Shopify). Sign up for a 10-day free trial.
Zooming from 100,000 users in September 2008 to 4,000,000 users in January 2010, Dropbox created a success story that’s talked about even today. Their clever yet simple referral program brought 35% of those users. It was a breakthrough, and hence it’s considered the epitome of referral marketing to this day.
The offering was quite simple: Invite a friend and get more free cloud storage. It permanently increased sign-ups by 60%.
Quite a story!
- Think beyond monetary incentives.
- Offer product-based perks. Not only will it increase word-of-mouth, but it will also increase brand loyalty.
Guess who also believed in “steal like an artist”? People over at Dropbox! Before Dropbox made a success story powered by its referral program, Paypal did it & inspired Dropbox to create a program that encourages users to use the product as an incentive.
Of course, Paypal did it in their own way. They literally gave away free money (Side question: Do you think ‘Mr Beast’ also got inspired by this?). And it turned out to be a huge success! The Paypal Refer-A-Friend program boosted daily sign-ups by 7 to 10%, allowing them to cross the 100 million user mark in two years of launching.
- Offer an incentive that keeps the user attached to your brand. E.g., Giving a site-wide coupon.
Uber’s product was revolutionary — It added a convenience layer to the way we transported. Indeed, people who used it in the initial days liked it; it was just a matter of getting more users before Uber became a mega-success.
Guess what helped them reach success faster? Their referral plan!
Uber got 12x ROI with their straightforward yet inciting referral program. They started with a $10 incentive (usable on rides) for both the referrer & the referee, and the program has been more or less the same throughout the years.
Another reason it was an instant success is how easy it was (& is) to access their referral program. Among the essential options on the sidebar of their app is one for sharing & getting free rides. Straightforward!
- Keep the button/link to the referral program at a frequently accessed place. Plus, make it frictionless to share.
Robinhood’s current “Get a free stock” referral program works excellently. However, to be in a list of rare & inspiring referral program examples, some massive numbers must be involved.
Here’s one: 1 million warm leads pre-launch!
Robinhood started as a small startup with a great idea. When their product was almost perfect (for that time), they created a simple no-fluff pre-launch page & asked people their emails for early access to their about-to-launch revolutionary product.
Once registered, people received a Thank You email with their number on the waiting list. Below that number was a message that roughly motivated people to refer a friend to get priority access. And so it began…the exponential growth (or, as we like to call it, snowball effect) of Robinhood userbase pre-launch.
- Have a short, readable copy that explains the referral offer in seconds.
- Gamify the process.
- Use people’s fear of missing out (FOMO).
With nearly 225 million users, Evernote is among the most popular cloud-based note-taking apps. Though the unicorn is failing fast in the recent past, there’s something all businesses can learn from its successful referral program.
Evernote gained its first million users in nearly 14 months. In another two years, it reached a whopping 11 million users.
People over at Evernote noticed that the longer a user uses the platform, the better chances they pay for the premium plan. For example, nearly 8% of the free users upgraded to premium if they used the service for one year; comparatively, 23% upgraded to premium if they were on the platform for three years.
This meant people used the free plan for as long as possible and eventually upgraded when needed.In such a case, offering a cash reward for referring and bringing new users would mean the users will bring just the new users. Plus, because the user would earn only if the new user became a paying customer, it wouldn’t make for a compelling proposition.
Evernote’s point-based program killed two birds with one stone. 1. It helped attract new users + 2. More free users became premium users.Here’s how the program worked/works: If someone signs up with the user’s referral link/code, they get points. The points can later be used to upgrade to Evernote’s premium services like the Premium plan or Monthly boost.
This way, not only did people bring in new users, but they also got to try Evernote premium’s compelling features (leading to an upgrade to premium).
- Cash rewards aren’t the most effective referral incentives for all businesses.
- Notice user behavior to figure out your referral program incentives.
FreeAgent is a cloud-based accounting software company. Small businesses pay a monthly fee (currently $20/month) to use its features.
What if the small businesses discovered they could literally pay $0 to use the service forever? They would snatch the opportunity!
FreeAgent provides them that opportunity…just, current users have to get ten other small businesses to use the platform. For every new user they bring, FreeAgent gives 10% off the bill to both the users (of course, until both parties pay for the platform). 10 users = 100% off (for the referrer).
What a smart referral program!
- Make an offer the users can’t refuse.
- If possible, give stackable rewards.
Tesla is famously known for its $0 advertising budget. That’s thanks to the influence of Elon Musk and the brand loyalty Tesla has built over time. And, of course, there’s a referral program contributing to its success.
Even before Tesla launched its referral program, Tesla owners were promoting it via word of mouth. The referral program just incentivized the brand advocacy, which led people to promote it even further.
Their referral program incentives have changed a lot — they started with a double-sided $1000 Tesla credit as rewards; then they added MASSIVE prizes for the most successful referrers; the third iteration gave referrers a chance to win a tour to SpaceX. Currently, Tesla’s referral program is at its 10th iteration.
Overall, Tesla got a 40x ROI with its referral program, which is good enough to be on this list of referral programs to steal 😉
- Build a brand so strong that people promote it even without getting anything in return. Then, add a referral program as a catalyst for word-of-mouth growth.
Today, Harry’s is billion-dollar shaving equipment and men’s personal care products company. But ow the success story of Harry’s started? With a referral program!
Harry’s launched a pre-launch referral program that incentivized getting people to join the pre-launch email list.
The incentives? There were 4 milestones depending on the number of referred friends that sign up.
- 5 friends = Free shaving cream
- 10 friends = Free razor
- 25 friends = Free premium razor
- 50 friends = Free shaving for a year
They ran Facebook ads and email blasts to get the initial pre-launch subscribers. And then the referral program did the job, or as we like to call it, the social snowball effect started.
Harry’s collected 100,000 emails in a week. Quite a success for a then-unknown company!
- Milestone referral program encourages people to invite more people than they would have in non-milestone one. (Only when 5 friends joined the list, the referrer got an incentive in Harry’s case. Now, if 8 friends join the list, the referrer will have an additional incentive to get two more to sign up).
Inspired? Here’s How You Can Launch Your Referral Program:
As I mentioned in the Airbnb referral program example, setting up a referral program these days is pretty straightforward. Just follow these three steps:
Step 1: Register with a referral app
A referral program app/software will enable your business with a referral program. Once set up, your customers can “refer a friend” and get a commission for every successful sale they bring in. What’s more, the software will also track all the KPIs — total revenue, revenue per referrer, AOV, etc. — to keep you updated with the success of your referral marketing efforts.
Step 2: Set your commissions
As you saw throughout the articles, you can give different types of commissions: store rewards, cash, discounts, premium service, etc. Depending on your business, set the commission you think will best work for your referral program.
For most product-selling ecommerce stores, cash rewards work the best. We suggest you set a 10-20% of the revenue or a fixed cash reward per sale for maximum success.
Step 3: Promote your referral program
If you’re using any referral/affiliate app other than Social Snowball, you’ll need to let your customers know about the referral program. Otherwise, most customers won’t even know they can refer & earn, and hence won’t promote your product or service.
To promote the program, try sending emails about it, mentioning it at the bottom of each newsletter, doing SMS marketing, adding a CTA at the end of your blogs/help resources, showing the ‘refer a friend’ button at commonly-seen places (like Uber did with its referral program), etc.
As for Social Snowball, it will let your customers know about the referral program whenever they buy from you.
How? Social Snowball shows customers their referral link and personalized discount code on the “Thank you for the purchase” page every time they checkout. Not only does it spread awareness about the referral program, but it also increases the number of referrers because most customers have a reason to buy from you, and they can share the same with their friends and family when it’s fresh in their minds.
(Of course, this doesn’t mean you can’t promote your referral program through the other methods we mentioned; just, even if you don’t, most customers will be aware of it.)
Drawing inspiration from already successful ideas and analyzing why those ideas became successful is the quickest way to start from a solid & uplifted foundation. It’s true for everything, including when you are about to build a referral program.
Don’t reinvent the wheel. Implement what works. And if you are on Shopify, install Social Snowball to begin your referral/affiliate program in a jiffy.