There’s no debate: When it comes to acquiring customers, referral marketing is one of the most effective strategies. Why? Because it relies on the time-tested psychology of word-of-mouth.
Whether you’re building a Stripe referral program or referral marketing program for your software-as-a-service, your ecommerce store, your agency, or any other online business, you actually have a lot of options.
To help you create your own referral system, we put together this list of referral marketing ideas. Use them as inspiration to build a unique and exciting referral system.
1. Leverage Social Gifting
Social gifting is a unique referral marketing idea because it doesn’t reward the referrer with anything at all. The entire reward goes to the referred friend.
Subscription boxes are known for using this method. They often give their customers a code that gifts a free box to their friends.
The friend is delighted to receive a gift from the referrer, the referrer gets the satisfaction (and credit) of giving a gift, and the brand gets an opportunity to convert someone into a customer.
This technique is especially useful for brands who are confident that people will buy their product once they become aware of it.
2. Reward with a Mystery Gift
Typically, it’s smart to be specific with your rewards. Your users want to know exactly what they’ll get for their referral.
But depending on your customer, that might not be necessary. They may enjoy a little mystery.
MeUndies offers customers a free gift with their order if they share the brand with their friends. Plus, their friends get a 20% coupon.
The beauty of sending a mystery gift is that you can throw anything in the box. You don’t have to purchase a special item just for the promotion. You can send anything you have on hand that your customer will like and you’re willing to give away.
3. Reward with a Charity Donation
This is another referral marketing idea that depends on your type of customer, but some people are more motivated by contributions to causes rather than rewards for themselves. They might be more likely to refer their friends if you donate to a worthy charity on their behalf.
Naturally, the charity you choose will need to align with your business and your customer’s values. For instance, if you run an ecommerce store that sells pet accessories, you could donate to an animal rights organization or a group of pet shelters.
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4. Create a Referral Contest
Referral contests are common. You’ve probably entered a few yourself.
Basically, you set up a widget (there are plenty of paid and free apps/plugins available) for contestants to enter the contest. The widget rewards the contestant with entries into the contest for completing basic tasks. The more tasks they complete, the more chances they have to win.
Huckberry’s ran a popular contest that awarded the top referrer $1,000 to spend at their store (which didn’t actually cost them $1,000 – we’ll explain more about this in a minute.)
Typically, these types of contests focus on ways to refer more people to the contest and brand. You would give an entry for sharing on Facebook, an entry for sharing on Twitter, an entry for sharing via email, etc.
You can also drive brand engagement (and thus loyalty) by giving out entries for tasks like commenting on an Instagram post, downloading a lead magnet, subscribing to your email list, etc.
5. Reward with Store/Subscription Credit
This is one of the most common referral marketing ideas. Rewarding your referrers with store or subscription credit is a great incentive for a few reasons:
First, it preserves your margins. It doesn’t actually cost you $20 to give someone $20 in credit. You only pay your real costs. So if someone uses that $20 to buy a t-shirt at your retail price, you only lose the cost of the shirt (which is presumably less than your retail price).
This technique is especially useful for subscription tools and paid programs (like courses). A free month of access may cost you pennies, or nothing at all, even though the customer feels like they’re saving a lot of money.
Second, credit drives repeat purchasing behavior. When they use their credit to make additional purchases, they reinforce their loyalty and build trust with your brand, which makes future purchases even easier.
7. Reward with an Upgraded Product or Service
Instead of giving your customers something new, give them a better version of something they already have (or just bought). For instance, you could upgrade them to the premium tier of your SaaS tool, tack on an additional hour of consulting time, or ship them extra laces for the shoes they just bought.
The best example of this technique is Dropbox. Their referral program rewarded customers with additional storage space. Customer could earn 500 MB of space for each successful referral (up to 16 GB). This method fueled their meteoric growth from 100,000 to 4 million users in just about a year. (We talk more about Dropbox’s successful program in this post.)
Just like rewarding someone with store/subscription credit, this technique is usually cost-effective because your costs are less than the retail value of the reward.
8. Reduce Their Friction
Make referring a friend super easy for your customers. If they have to take more than three steps, or if they have to make any complex decisions, they probably won’t bother.
Here’s a few ways to reduce friction:
- Don’t hide your refer-a-friend feature somewhere your customers won’t find.
- Populate the referral messages so your customers can just click “send” without spending time crafting their own copy.
- Keep any emails you send (to the referrer or the referred party) short and simple.
- Automatically track their rewards so they don’t have to.
The best way to reduce friction in your referral marketing campaigns is to use a referral marketing tool designed to make the whole process easy (for you and your users/customers).
9. Optimize That Headline
Your referral offer’s headline is the most visible part of the program. It should be simple, specific, catchy, and memorable. Most importantly, it should clearly explain the value of the program.
Here’s a bad referral program headline: “Mandy’s Makeup Refer-a-Friend Program”
Sure, that headline is accurate, but it doesn’t tell people why they should bother and certainly isn’t compelling.
Hubstaff’s headline is absolutely clear. It’s simple and focuses on the benefits.
Here are a few examples of great referral marketing headlines:
- “Earn $20 just by sharing”
- “Give $50 to a friend and get $50 for yourself”
- “Invite your friends and earn a free ride”
- “Get $25 when your friends sign up”
- “Tell your friends about us and you both get $20”
- “You get $10 for every friend you sign up”
- “Share your purchase and we’ll include a free gift”
10. Make Your Program Discoverable
Your referral program isn’t just a way to leverage your existing customers. It’s also a selling point for new customers who are considering using or buying your products. If their decision comes down to you or your competitor, they may choose your business because they want access to your referral program.
So it’s important to make your referral program’s landing page discoverable without logging into an account. Link to the page from your top or footer navigation. You could also mention it on your homepage. Make sure to write a blog post about the program, too.
Here are a few more places you should mention your referral marketing program:
- Your email signature
- Your newsletter
- Your “thank you for purchasing” page
- Your “thank you for subscribing” page
- Invoices, recipients, and flyers
- Social media posts
11. Retarget Your Customers
Retargeting is the practice of tracking people who visit a page on your website and promoting to them on another medium – usually Facebook. It’s worth the time and cost of a Facebook ad to retarget these people because you know they’re at least somewhat interested in your program.
If your customers view your referral page but don’t take any steps, you can give them another opportunity to refer a friend.
Setting up retargeting requires using a Facebook pixel and buying an ad through Facebook’s ad platform. It’s not complex, but there are a few steps. This tutorial will help: 5 Simple Steps to Create a Facebook Retargeting Campaign.
You can also use retargeting to connect with people who were referred by your customers, but didn’t sign up or buy.