Ingredients of a successful Referral Program

Many simple things can help in designing a successful referral program. Here is our experience based on running referral program for several online businesses including SAAS, Ecommerce and forums.

1.) First and foremost the product itself should have great value proposition to the customer. Referral program can only amplify the reach and ROI of the product and not create the need itself.

2.) Referral program can drive great results if the incentives given as part of the program are the core offerings of the brand itself. A very good example of the same is dropbox which offered free space.
For subscription based products it could free month’s subscription, usage limit extension or discounts on subscription. For Sendgrid it may mean a 10% increase in email sending limits.
For Ecommerce it could be discounts on their site.

3.) Another important aspect is the ease with which the referrals happen. We are running referral program for several companies and have optimized the referrals sent per person to nearly 200/referer. And this can make a huge difference to the program performance.

4.) Referral program should leverage the social media – Facebook, twitter, Email import etc to increase the reach. These small things can exponentially increase the invites sent per referrer.