Referral marketing is basically a marketing strategy in which businesses leverage its customer base through turning its loyal customers into their brand promoters. In the past 20 years, there are many referral marketing examples that made companies successful and that's what we are going to see today.
This kind of marketing uses referrals or word-of-mouth to promote services or products and businesses may control it through suitable strategies and make a viral referral campaign. This can make both more profits and good customer base for your company. Nevertheless, it is essential that the marketing is done right. Otherwise, this may backfire on you and rather than gaining new customers, you might lose your current customers.
Why Referral Marketing is a Good Thing for Businesses?
Many people might wonder why they should use referral marketing if they are already practicing different kinds of marketing. Is it really powerful or what makes it very important for an e-commerce business? Well, the answer is simple. Referral marketing has not been rated as one of the best and most powerful marketing tools for no reason. There are several factors that are inherent in referral campaigns that lay the foundation of successful marketing strategy.
• Target Marketing Usage
Every businessman understands the significance of targeted marketing. That is the reason why segmentation tools that enable businesses to categorize the customers into appropriate segments on the basis of different factors are very famous. When products are marketed to customers who need them, the chances of customers purchasing your products become high. On contrary, if you market products to customers who aren’t interested in that particular product, you face the risk of thinning out the customer base of your business.
Referral marketing actually uses precision targeting. Once you ask for referrals, your clients who would refer your services or products would know the people in their circle of family and friends well and would know how to convince them to get something better than you do. It’s a more targeted approach and through this, you can be assured that your brand name would spend effectively ads rapidly, bringing more customers to you as a campaign goes viral.
• Extensive Reach
Another referral marketing aspect that adds to its value is its extensive reach. Family and friends aren’t the only referral channels. Celebrities play an essential role to reach out to customers. Popular YouTubers are approached by companies who like them to refer their products in their videos. For instance, hair stylists would refer a hairspray or serum to her or his fan base and this could lead the viewers purchasing the product since they trust the hair stylist.
In addition to that, testimonials, customer reviews, and bloggers play a major part to being profitable referral channels. With such referral channels, each of these might have hundreds or thousands of followers and subscribers, the reach can be widespread and by using such sources, this will help you acquire a big customer base.
According to a study, it was found out that referrals is the most trusted form of advertising. Generally, trust is the basis of each good relationship and in business-customer bond, trust is the factor that’d prompt the customers to invest their money in you and recommend your products to their family and friends. In many cases, individuals are wary of marketing campaigns if they’re shopping for the first time. Nevertheless, if a family member or friend assures them of the brand’s quality, they become at ease and would shop with some restrictions than before.
Through the use of the help of people to market your products to people who trust them, your business will get more customers than carefully-crafted ads or marketing campaigns. It’s what makes referral marketing very powerful as the trust factor in this kind of marketing is high and tapping into this reserve is bound in getting your e-commerce business the attention this deserves.
• Accelerated Growth
The channels that were mentioned are definitely extensive. However, how fast do you think referrals would go viral? With today’s advancement in social media, customers can reach thousands of people in just a few seconds. A single Facebook post, single tweet or Instagram selfie can achieve thousands of potential customers in no time and re-posting and re-tweeting of the referral means that you can reach lots of people in just a short period of time.
Now that we saw why referral marketing is important, let's have a look to some of the most successful referral marketing examples...
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The Best Referral Marketing Examples You Should Not Dare to Miss
Now that you know what referral marketing is all about and the main reasons why it is very important, here are some of the best examples of referral marketing that will surely help your business in the long run.
Dropbox referral program is probably one of the most famous referral marketing examples but also one of the most known growth hacking examples.
Dropbox is a famous online storage company and they began a referral campaign through offering free 500MB space for both the referred and advocate. This method worked wonders for Dropbox and this saw an increase in signups up to sixty percent. Dropbox understood the need of the customers, which is basically the need for more storage space and promised that as a referral award to general lots of customers successfully.
If you are a marketer and have not heard about the referral marketing campaign of Airbnb, you’re not qualified for your position. Yes, you have read that right. The referrals of Airbnb are the best in the world and analysts have reasons why they said this.
Whether it’s hacking Craigslist or bring in awareness about the referral program, Airbnb learned and improved each step of this technique and mastered the art. What they offer is a 2-way incentive program to users. It means that the recipient and referrer are eligible for a twenty-five dollars credit once the recipient completes his or her first trip. The referrer is also entitled to seventy-five dollars once the recipient hosts somebody. The program is still available for users.
It is never easy to miss Uber when it comes to their referral marketing. With its thousands or even millions of users around the world, Uber deserves a spot in the top referral marketing examples. Uber is one of the best growth stories. What makes its success different is that their decision is incorporating referral marketing in the mobile model via the app.
Nowadays, referral marketing examples like Uber's model is replicated by some ride and cab sharing apps. Uber's referrals are based on the free ride’s concept. The referral model is open to drivers as well, which has picked up well by users.
It is apt to say that Google has twined itself into one’s daily life and beyond. When giant brands like this utilizes referral marketing to promote products, this speaks volumes regarding the technique’s effectiveness. Even if this program is functional in some countries, this still attracts a big amount of referral traffic because of its simplicity. Google For Work provides a 1-way referral program that’s quite vanilla. For each recommendation, a referrer will get $15.
After sending out several unsuccessful email referral campaigns, the ReadyTalk, a video and audio conferencing service provider, considered investing in advocate marketing program to nurture their best customers. With this program, they gave rewards for smaller acts of customer advocacy and strengthened their relationship with the customers before asking for some referrals.
In the first ten weeks of implement advocate marketing program, ReadyTalk got 183 referrals. Being personal with top advocates and providing them something of value before asking for referrals will inspire them to submit high-quality referral leads continually.
Evernote, a note-taking app, launched a referral program, which awards points to the customers each time they make referrals. Such points may be redeemed for free access to the premium features of the software. Aside from that, each time the referred lead of a customer upgrades to the Premium version of Evernote, the customer who submitted referrals will get extra points. The service now has hundreds of millions of users. In fact, thirteen millions of these were referred by some users.
What you can learn from referral marketing examples like Evernote is that their process of referral does not end after your customer submits the contact information of their friend. Providing them rewards whenever the person they referred upgrades their product can serve as a reminder to refer again. This will also motivate them to encourage their peers to upgrade.
FreeAgent is an accounting software and its referral program provides both new users and referring customers a ten percent discount, which lasts as long as both parties are actually paying subscribers. The discounts are stackable, which means that once the customer has referred ten peers, they will use the software for free of charge. After this, they may ask to join the Evangelist program of FreeAgent, which enables the customers to earn a twenty percent share of subsequent referral subscriptions.
The idea to steal with FreeAgent is that making referral incentives last as long as each party is a customer can help avoid churn. Providing stackable rewards for every referral will motivate your customers to submit new contacts consistently.
Verafin is an anti-money laundering and fraud detection software used an advocate marketing program for running Referral Rally contest online, which offered rewards for top referrer at the end of every week. To make sure that all leads submitted were high quality, the company included a feature called Referral Certification challenges, which educated the advocates on the ideal referral persona of Verafin, how best to submit a referral, and how to talk regarding the company to prospects.
When advocates completed every step, they got a special badge. After the contest finished, Referral Rally produced topnotch quality B2B referral leads, which is 3 times the number they’d hoped for.
With the referral marketing of Verafin, Gamifying the process of referral will surely engage your advocates as well as motivate them to get more referral leads for you. Educating them on your preferred prospects will also ensure that you are only getting valuable leads you may act on, rather than low-quality referrals that will waste the time of your sales team.
A known electric car company changed its referral program throughout the years to reflect its customer base that continues to grow as years passed by. Originally, they offered customers a thousand dollar to refer a friend, yet have changed since their strategy is giving Tesla owners who refer many people to be eligible for better prizes including an exclusive battery. It’s even better for the fact that the first individual to refer twenty people in their region will get a free Model X or Model S. Some referral rewards include invitations to an exclusive party and the chance to buy some special edition products not available to the public.
In terms of rewards, the best are the things that money cannot buy. Whether they are special products, a VIP treatment or an access to a private event, such incentives will surely make each of your customers feel truly valued, especially if you want them to refer again. You may also use referrals to enter the new markets in a cost-efficient way through providing regionally-based contests and incentives.
Tesla's referral program reflects how much testing needs to be done when creating a campaign in order to see what works and what doesn't.
With the use of their advocate marketing program, which is called Influitive VIP, the mobilized lots of advocates to submit referrals, making their company grow successfully. Last 2015, they generated thousands of referrals through running a variety of several campaigns and bringing together customer support, marketing, and sales.
What you will get from the referral marketing of Influitive is that you have to know what your advocates need and want. You might have lots of happy clients wanting to be a referral for you and refer you to their networks. They are just waiting for you to make a move. Through creating a one of a kind program that prepares the customers to give some referrals and provides them a great referral experience, you may fill your pipeline with quality leads.
The referral program of PayPal was actually used as an inspiration of Dropbox’s successful referral campaign. I personally love Paypal's referral marketing example as it is not so renowned since this happened when social media wasn’t so common. PayPal used the means of IMs, blogs, and emails to spread the word of their referral campaign and got a daily growth of 7-10 percent in the early 2000s. PayPal began to pay people to invite their friends.
It was unheard of at the time and tons of users jumped on the bandwagon, enabling Paypal to earn a strong customer base of over hundreds of millions of members.
Pictures are worth a thousand words. Amazon includes header images in its post referral program, which evokes a reminder of the significance of friendship. The referral campaign’s content is well-written, which urges the user to share experiences with their friends through them to the Amazon Prime. A strong call to action is a primary part of this referral program as well as one of the reasons of its huge success.
iStock gives a royalty free stock image, audio track, and video for online users. The referral program had unique angles, they enable their customers pick their own referral reward. Giving 3 options for users, commission, credit, and cash, they ensured that they’d target a bigger base of potential clients. These are their rewards:
o Commission – If users refer successfully a friend and they purchase a pack within thirty days, the advocate was provided with twenty percent on this sale.
o Credit – For each new customer who purchased thirty credits within three days, twenty credits were provided by the company.
o Cash – iStock offers twenty dollars in cash for each new customer who made a purchase of thirty credits during a period of 30 days.
iStock has a big market with various individuals from across the globe. Through giving them an option to select from, they made sure that they cover every customer who has several motivations to make referrals.
It enables people across the globe to create events. This global marketplace provided a referral reward of twenty-five percent of all referred customer fees that are generated every year. Even if it has been seen by numerous referral programs that referral marketing campaigns provide double-sided incentives, which are more successful compared to the ones in which incentives are only given to the referrer. However, it’s one example of single-sided referral done right to gain customers in spite of not providing any incentives for referred people.
Interested by viral growth and referral marketing?
1. Provide Exceptional Buying Experience and Customer Service
The core of each and every referral is a good product, a good overall buying experience, and exceptional customer service. It’s the fundamental to any particular referral campaign. To begin, assess the buying experience of your business, looking at this from customer perspective and ask yourself if it is worth sharing with your friends.
2. Pay Attention to the Analytics
You are probably already getting referrals and do not even know it. Google Analytics has an entire section on referrals, which can help you pinpoint some websites that are referring and linking individuals to you. This report may be broken down to not just visitors yet customers as well, providing you deep understanding of which referring websites is most qualified.
Through this knowledge, you may reach out to such websites and work out a plan to obtain even more traffic. For instance, you might work out for a referral program to share profits with them, guest blog posts, and additional mentions.
3. Make It Easy for Customers and Visitors to Refer Your Brand
You might want to ensure that you are making it easy as possible when sharing your products and refer your brand. Basically, there are numerous ways to do this. Consider how a successful company has done this on their website by adding this right to their primary navigation. There’s no doubt that referring friends is an essential call to action for them.
4. Capitalize on Influencers
The influencers within your niche may be a goldmine of referral sales and traffic. The key is finding influencers who are following close as possible to your targeted market.
5. Implement Referral Programs
There are times when people need a nudge. Giving rewards for referrals may be just the thing in getting your customers and visitors sharing your brand with their family and friends. For instance, companies offer some tiers of rewards in a form of products getting people share their pre-signup landing page. You may do the same through providing rewards through a loyalty or referral program.
6. Reviews are Also Referrals
People trust what others say about your company more than what you say. Therefore, see to it that you encourage customers to leave reviews after their transaction.
There are many growth hacking tools around and some of them can help you build referral marketing campaigns with little to no effort.
Referral marketing exists for a long time even if it's more and more used recently. Indeed, viral growth has become so popular via growth hacking and the rise of growth hackers.
Referral marketing is an important and powerful component for each business. Implementing several basic techniques may help facilitate and encourage the process of referral that can be a primary source of new sales. While the best and effective referral marketing campaign is a matter of debate, those examples above have excelled when it comes to providing ease to customers, a value add to their life aside from introducing new deals making them famous with the masses.
Some businesses have stayed and provided a continual referral program to its patrons while others put a stop in the end. For somebody whose bread and butter is all about making growth hacks, many businesses can look out for new services or products that are utilizing referral marketing in a unique way to highlight their items.
If you are just starting with your referral marketing campaign for your business, make sure that it’s something that would be enjoyed by your customers and referrers. In this way, get inspired by the successful referral marketing examples above and I can guarantee that you will achieve results.
At Growth Hackers, we can help you get viral growth, create a referral marketing campaign but also help you with lead generation, social media, conversions, content, SEO, growth hacking, email marketing and much more. Don't hesitate to contact Growth Hackers now and discover how we can help your business grow.
I am the co-founder and CEO at Growth Hackers and Growth Academia. We help startups, small businesses and entrepreneurs with growth methods. I am passionate about startups, growth hacking, inbound marketing and entrepreneurship. You can follow me on Twitter: @GrowUrStartup