Referral programs are an effective tool for advertising the products to existing customers. That’s why many businesses are including referral programs in their strategies. It can be considered the right tool to improve the sales and profit of the companies.
Are you interested in adding referral programs to your marketing plans? This blog will help you learn various tactics from referral marketing program case studies.
Before jumping into it, let’s review some of the importance of referral marketing.
Table of Contents
- Why Referral Marketing Matters
- Case Studies of Referral Marketing
- Frequently Asked Questions
- Wrapping Up
- What Is Referral Marketing? What Are the Benefits of Referral Marketing?
- What are Remarketing Ads? Why Use Them?
Why Referral Marketing Matters
Referral marketing is great for building expectations among existing customers. Customers will have a feeling of working together with the company. Sharing experiences and recommending the products will generate excitement in the new audience. Through these programs, the trust and expectations towards a product are being transferred from person to person.
- Cycle of Referrals
Referral marketing is a cycle that passes from one person to another. It’s similar to you recommending your friend the best brand for shoes. Satisfaction is the key reason for a customer to recommend a product or service to others. The business should be able to give a great customer experience. This will have an impact on referral programs and improve the traffic of campaigns.
- Increasing Overall Sales Rate
You can indeed improve your overall sales rate through referral marketing. If a new customer is aware of the company and its values, they can be easily converted. This can convert into high overall sales because the existing customers are suggesting your brand to people who already know about it.
- Loyal Customers
Referral marketing will help you in identifying the list of loyal customers. You can easily expand your business and build a community of customers. This will have a good impact on the sales and growth of the business.
Now let’s have a look at some of the examples or case studies.
Case Studies of Referral Marketing
- Tesla Referral Programs
Tesla is one of the top American automotive companies. It designs and manufactures electric vehicles. They always come with methods and strategies that are controversial. As they always stand out from the crowd, Tesla has a customer satisfaction rate of 89/100.
One of their great strategies was the referral programs that Elon Musk launched in 2016. In these referral programs, they came up with a different idea of rewarding the customers, highlighting the customer’s loyalty, and giving a great experience.
Rather than providing product discounts, they offered an invite to a Tesla factory tour to the Tesla owners. They also allowed their customers to attend the grand opening party and purchase the Founder Series Model X which is unavailable to the public. In addition to these, they also provide rewards to referees such as giving 10 $1,000 discounts.
This made the company stand out from others and helped in making multiple returns over 42x on each dollar spent. So, this can be a great example of rewarding customers in a different way.
Read more about Tesla from here.
- Harry’s Refer to a Friend
Harry’s is an American company that focuses on manufacturing and selling men’s care products and shaving equipment. It is a company that provides subscription services through which customers get new razor blades, shaving cream, etc.
While focusing on their referral program, the company planned a week-long referral program. This was a pre-launched program to collect the emails of the qualified customers.
The rewards in these referral programs are based on the number of people you refer. It includes earning shaving cream for referring five people. And if it exceeds 10 people, you will get a free razor. If you are referring to the brand for 20 people, then you will achieve a premium razor. Above all these, you will get free shaving for a year for recommending the brand to 50 new audiences.
Along with referrers, the company also provides rewards for referees such as 10% off for the first purchase. The results were beyond expectations because they achieved 100,000 leads for the first week.
- Robinhood’s Referral Program
Robinhood is one of the best American financial services focusing on commission-free trade of stocks, cryptocurrencies, traded funds, etc. They are capable of trading in Bitcoin, Ethereum, Dogecoin, etc.
It is popular among people because it has almost 1.2 million customers on the waitlist. Robinhood offered the stock with a value range of US$2.50 to US$225 to the existing customers and the new customers.
The referral program brought a fabulous reach as more than 1 million people signed up for the waitlist. As it was working well, they increased their investments compared to others.
- Smarty’s Success
Smarty is a UK-based telecom group providing Sim-only services with a contact-free mobile network. This mostly focuses on tech-based people or youngsters. The company used to provide an offer of ‘buy back’ for unused data.
So, for building a trusty community, they executed referral programs rather than general marketing strategies. The existing customers were rewarded with one month of free services.
Similarly, the company offered one month of free services also to the referee. This referral program had a great impact on growing sales. It also improved revenue growth and subscribers.
- Koodo Mobile
Koodo is a Canadian mobile flanker company providing services like prepaid, postpaid, wireless home phone services, etc. At a certain point in time, Koodo needed new customers. This made them turn towards referral marketing strategies.
The company planned and decided to offer C$25 off your tab for the existing customers who are referrers. They also offered rewards for new customers joining the team like C$25 off for the first bill or purchase.
Through this program, they resulted in decreased cost of customer acquisitions. They also succeeded in providing a great customer experience through single sign-in.
You can read more about other telecom referral programs from this blog.
Revolut is a British-based banking service company. They have helped around 500k business customers across the world. Their growth lies in decreasing acquisition costs. Revolut is known for customer-centric solutions and innovations.
The rewards for both referrer and referee were cash rewards based on differences in the marketing campaigns. The rewards were given to customers who ordered physical cards and 3 card payments. Revolut succeeded in these campaigns due to strategies like limited-time offers, regular emails, follow up, and other reminder messages.
The referral marketing campaigns have played a great role in achieving effective results. The company has reported an increase of 700% in acquiring new customers from 2018 to 2019.
Evernote is one of the popular apps launched in 2008. It is created for writing or marking notes, organizing, and other tasks management. It has collected around 100 million users across the world.
They have always considered the interests of customers and tried to generate products that their customers love. To grow and improve sales, they have used referral programs and campaigns. It also helped them to achieve financial success.
The rewards Evernote offered are earning 10 points for the first three referrals. This includes three months of premium usage or an extra 3GB upload. Along with these, the company also offers rewards for referees like a one-month free premium.
Frequently Asked Questions
Why does referral marketing matters?
It has fours reasons
2. Cycle of Referrals
3. Increasing overall sales rate
What are the case studies of referral marketing?
1. Tesla Referral programs
2. Harry's Refer to a friend
3. Robinhood's referral program
4. Smarty's success
5. Koodo Mobile.
What is meant by cycle of referrals?
Referral marketing is a cycle that passes from one person to another. It’s similar to you recommending your friend the best brand for shoes. Satisfaction is the key reason for a customer to recommend a product or service to others.
While planning to execute a referral program, you should consider all the factors and limitations that will affect your company. These case studies of different companies will help and inspire you to find out the best ideas for your referral programs.
Have you tried referral programs in your marketing strategies? What are your experiences with referral programs? Share your views through comments.