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10 Proven Customer Referral Programs That Really Work!

Mathew Maniyamkott

Mathew Maniyamkott

10 min read

Customer referral programs are all about finding win-win equations for both your customer and you!

Referral marketing is a method where you promote your products or services to new customers and you reward them for each referral. You can create appropriate customer referral programs to influence your customers with the help of incentives. Some customer referral programs are so good, that you can’t help joining them!

What are the qualities of a good customer referral program?

  • The incentive for a customer to refer is clear and enticing enough for them to participate in a customer referral program
  • Have a clear and targeted customer referral program
  • Have brand advocates who will help spread the word about the customer referral program
  • Using incentives that is relevant to the product you sell and the target market you want to attract is important in a customer referral program

There is no standard customer referral program because each company’s values are different, thus you need to create a customer referral program that makes sense to your business. Like most marketing techniques, managing the customer referral program campaign effectively will only bring returns since half-hearted attempts at customer referral campaigns can turn out to be a major embarrassment. Making sure that your loyal customers participate actively in the customer referral program should be one of your most important goals during the campaign.

Customer Referral Programs that really work

One of the most popular and successful customer referral programs was Dropbox’s refer-a-friend feature that increased sign-ups by more than 60% for the company. Their customer referral program was a success because it offered rewards for both the referrer and the referee.

How to Make Your Customer Referral Programs Effective:

Target the right kind of customer:

Make sure you are targeting the right customers before you create a customer referral program. Customer Referral Programs are extremely effective as people who get referred are usually friends of your customers and there is a lot of trust factor riding on it.

Select the right rewards:

When you launch your Customer Referral programs, it might not be possible to reward your customers who refer with cash as not all companies are funded and don’t necessarily have enough cash to burn. Consider offering points to the customer in your customer referral programs that can be exchanged as cash or products when the points accrue over time. Offer them experiences that would be a credible incentive in your customer referral program.

Promote the Customer Referral program:

The Customer Referral program should be easy for your customers to discover. A customer should be able to find information about the customer referral program at all customer touchpoints. Be sure to include information about the customer referral program on email communications, blog, social media handles, website and more.

Engage deeply with your customers:

Once you have customers who have signed up for the customer referral program, the next step is to make sure that they have complete information about what the program entails, incentives that they get and more. Keep them engaged and remind them again and again about the benefits of the customer referral program.

Measure the effectiveness of the customer referral program:

Customer Referral Programs need to be measures to keep it relevant

An effective customer referral program will measure the effectiveness of the program at regular intervals to see if the program can be fine-tuned and made better for the end customer. The most important thing about a customer referral program is that it should be easy to refer the content easily to one’s peers.

Launching a Customer referral program Marketing Strategy:

It is imperative that you know what the implications of a failed customer referral program would be because not being prepared for it means that you would be found lacking which means you might not be able to fulfill the promises you made to the referrers. Not being able to fulfill the promises will make your company look like a fraud. It can be a setback in a customer referral campaign which might almost be impossible to recover from because they lose trust in you.

Make your product easy to share:

There are many ways in which you can woo your customers, it is not only about the product especially in a customer referral program. There is a lot of intrinsic value in the packaging side as well. Apple designed its earphones in white color when the majority of them were black in color. Not only did it give them a specific advantage as people started noticing the difference, it was a validation of sorts for the customer as well. Think of other ways to make the customer referral program a standout in the eyes of your customer.

Offer an amazing experience:

It does not have to be about money always, customer referral program’s incentives can be in different forms (we have discussed it in detail below). As simple as a call from the CEO or offering the customers a chance to visit the company’s office with all expenses paid will be a huge fillip to the customer personally in a customer referral program.  Keep all other customers engaged if you manage to show them a video of this particular customer’s experience as a part of the customer referral program’s marketing.

Tell them what you stand for:

There are a lot of firms that take a political stand when they know that giving the oppressed a voice is not only mightily important but also gives you a moral authority. Although it might not keep the company in the good books of the incumbent government, regardless of it, they will be feted and respected by the customers for their brave stand. Tell your customers what your values, mission, and vision are. It will bring them closer to you.

Make the customer referral program easy to join:

If it takes a lot of steps for your customer to be a part of the customer referral program, you can say goodbye to them forever. Customers don’t even want to spend more than a minute on setting up to be a part of the customer referral program. The easier you make it for the user, the better it is for your customer referral campaign. Hire a good copywriter to make the content easy and to the point so that none of your customers are confused by the message and the benefits associated with the customer referral program is clear.

Customer Referral Programs should be easy for customers to join.

Here are 10 customer referral program that will surely work for all companies:

1. Referral to Friends and Family

This is easily one of the most popular customer referral campaigns around as it is a natural human tendency to share likes and dislikes of one’s friends and family. When a brand rewards customers for doing this kind of referral, it only strengthens the relationship of the customer with the brand. By incentivizing each referral, you are tapping on your customer’s natural instinct and prodding them to do more of it. Dropbox offers you more cloud storage when you refer new customers to them and it has been a super successful customer referral program for them.

2. Two-sided Benefit

People love to send gifts to their friends and family, so design your customer referral campaign in such a way where not only does the person who refers gets a benefit, but the new customer will also be rewarded with an incentive. Also, the referrer will feel as good as someone else is getting benefited from the referral and brings them closer to the brand. Uber is famous for giving this 2-sided incentive where a personalized referral code is generated for each customer as soon as someone’s account is validated in the customer referral program. Both parties get their next ride free when someone uses the customers’ referral code.

3. Community Benefits

Customer Referral Programs quote about people are 4 times more likely to buy when referred by a friend

There are a lot of organizations that deserve your support for the social causes they work on. A business can partner with a non-profit and support their cause by donating their time and also offer promotions where the proceeds from the customer referral programs can go to them. Tell your users that for each referral they do, 10 or 15% of the proceeds will go to the non-profit organization. Not only does the organization benefit from it, you get more referrals too because your customers would be motivated by their act and talk about your customer referral program to their friends.

4. Higher Percentage for the First Referral

A lot of customer referral programs offer a referral rate that is usually 5 or 10 dollars and it stays the same way. However, there are companies which understand that offering a high percentage on the first referral will not only bring a lot of folks into the mold but also it will be easier to encourage them to refer more people to the customer referral program. The high referral amount is what makes many people take that step of referring their friends. You can maybe offer $25 in the first referral and the next referrals could be $5 which is still a good amount for a referral.

5. Rewards for the Top Referrers

If there are customers who you see referring often, then make it a point to appreciate them and do it in a special way so that they are emboldened to refer often. Sending handwritten notes, a call from the CEO, cash rewards, a shout-out on the company’s social media handles and more can be some of the rewards in the customer referral program. In fact, promoting a campaign where the best referrers will be given an extra reward will also motivate a lot of customers to refer as many of their friends as possible. Make the reward as substantial as possible so that they do not feel slighted.

6. Company Swag

If it is against your policy to offer cash or any of the rewards we mention here, then there is another way for you to make your customers happy for each referral. You could offer them company swag that ranges from T-shirts, coffee mugs, caps, coasters and so on as a part of your customer referral programs. The offer could be based on tiers where for the number of referrals, you get company swag based on the customer referral program policy. Not only is this a low-cost method to get more referrals, the customers grows closer to the company because they have a physical product that is a proof of your reward that they can see every single day. Company swag is one of the easiest methods for you to make your customers feel as if they are ambassadors of your company and it is very effective in customer referral programs.

Customer Referral Programs quote about how a trusted referral is the Holy Grail of advertising.

7. Offering Discounts as a Part of the Customer Referral Program

Discounts are easily one of the most popular and used options in customer referral programs because it is so easy to create and devise one. The best option would be to reward both the referrer and referred person so that both have something to gain as a part of the customer referral program. Not only does it encourage loyal customers to refer more, you are offering something where the referrer will be coming back to you. Also, do not go overboard with discounts in your customer referral programs through the entire season as your customers might feel they are being given a ride as they wouldn’t value your products highly then.

8. Gift Cards

If you are a small company, giving away gift cards is easily one of the best ways to amass referrals in your customer referral programs as you can offer them a wide variety of gift cards. It could be an Amazon gift card, Home Depot or a Walmart gift card for that matter, all of which will be valuable to the end user. In fact, have gift card arrangements with many of these companies and give the option for the referrer to choose the gift card they prefer, a big plus to your customer referral program.

9. Exclusive Access

Everyone likes to be part of an exclusive club where it is not a free-for-all. Remember, not all rewards have to be in cash, you can offer your referrers exclusive content that they might not be able to get access to even for a payment. Exclusive content like information and guides can be used as an incentive to persuade your existing customers to bring in their friends too in your customer referral program. It could also be access to a private community where there is exclusive content available which a referrer will get as a part of the customer referral program. Facebook and Slack groups are a big thing and people love to be a part of community where they can share their ideas and feel valued. Exclusive access to a community will drive a lot of referrals and when you use it wisely in your customer referral programs, you can see traffic pouring in.

10. Offering Early Access as a Part of the Customer Referral Program

Customer Referral Programs quote about one customer, well taken care of, could be more valuable than $10,000 worth of advertising.

Allowing your top referrers to content that is not publicly available to other customers throughout the world is something that a lot of loyal customers will appreciate. All of us are competitive people and being given something that another customer will not get is a huge boost to the ego of the referrer and it works in your favor. Use a leaderboard campaign so that all the referrers know where they stand which will create a competitive environment that will be a huge fillip to your customer referral program.

Conclusion

Building a Customer Customer referral program can take a lot of time and effort, but the results from it can be extremely high. Don’t hesitate to try anything innovative or even something that might look ridiculous on the outset. Find new opportunities to work with a newer set of people.

Referral Marketing is important for every business and implementing the programs that we mentioned in the article can be a huge marketing method for your business. A study by the University of Chicago found that non-cash incentives are 24% more effective than cash incentives.

A reward program should not be chosen according to one’s whims and fancies, but it should have a clearly well thought out strategy. Learn how your customers behave, ask a few of them what kind of reward programs they would like to have, take the popular opinion, go back to your drawing room, find out if it is the best option for your business and then start implementing it if the answer is ‘yes’.

Mathew Maniyamkott
Mathew Maniyamkott

Guest Blogger at SurveySparrow

Regular contributor to various magazines. Passionate about entrepreneurship, startups, marketing, and productivity.

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