How can Referral Programs Drive your Business

Did you know that word-of-mouth or earned advertising is one of the simplest, yet the most personal and powerful ways to acquire new customers? Such referrals coming from close family members are more powerful than most advertising methods.

Online giants all master the art of referral. Uber has delivered one of the most powerful referral program. When one customer refers to his or her friend, both of them earn a reward.

So how does the whole concept come about? Incentive is necessary: give something to your customers to talk about. It could either be the ambiance of your restaurant, the extensive menu, freebies with makeup purchases, vouchers and discounts, etc. These are also referred to as triggers of your business and play a very important factor in earned advertising. 

Let us look at some of the ways in which your business can benefit from referrals.

1. Personal way to advertise 

Your customers understand their family and friends better than any business can, they know who exactly to tell about your business. 

2. Time saving

It is much more time saving because you could have at least 10 of your customers spreading the word of your business to at least 2 interested people, all at the same time. Can any business advertising method achieve that?

3. Money saving

Word-of-mouth referral is an effective lead generation tool and your business no longer needs to invest a large sum of money on advertising on several different channels. 

4. Build a community

Aren’t you more likely to listen to the advice of a friend rather than a complete stranger? That is pretty much the whole reason why this proves to be such an effective referral method. This, in return, generates lifetime loyalty. 

If you’re still not convinced then let’s look at some of the companies that have used the method of word-of-mouth as a crucial way to acquire long term customers.

1. Airbnb

Airbnb enhanced their sales by 300% per day. The referral program encouraged a customer to recommend a friend where both would receive $25 worth of travel credit. They provided customers with personalized referral codes to enhance ownership and as a result, some even posted this code on their social media profiles. Referrals increased the bookings by over 25% in some of the countries.

2. Dropbox

Dropbox is a cloud storage company that acquired more than 4 million users in just a matter of 2 years and spent absolutely no money on advertising. How did they do that? The company offered their customers incentive if they were to refer the application to their friends. Some of the incentives included shared documents, discount on annual fee, etc. 

3. Oneplus

Oneplus smartphones were ahead of their game. People could not purchase the product until and unless they recommended their friends and family. So people went on to social media to invite other people. In no time, Oneplus started competing with big, premium players such as Apple and Samsung, which have been in the market for several years.

If you aren’t using word-of-mouth yet, you are surely missing out!

If you aren’t yet and you want to get started with ease, contact Wefee1 today and start your very own referral program. A customer engagement platform like Wefee1 can make your referral/rewards program easy to manage with easy-to-use, yet sophisticated automation. When you create your own referral program, Wefee1’s platform allows you to customize incentives for both parties, put a limit on the number of people that a member invites and limit the rewards that he or she receives. And you can track ROI to assess your referral program success!

Ankita Srivastava

Ankita Srivastava

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