Perks and pay-offs are a great way to motivate loyal customers into sending more referrals, be it a free month of subscription, discounts, or gifting any item of value and importance. Referral incentives are a proven way to give customers a reason to share brand love and refer more people in their inner circle. A report by LinkedIn says, 84% of B2B decision makers begin buying due to a referral. Referred prospects also convert 30% better and have a 16% higher customer lifetime value.
The main thinking involved behind the creation of referral incentive ideas is essentially to promote persistent and regular shopping. Referral incentives are not everything when it comes to rewarding a loyal customer, most of the time it is crucial because of its unique ability to amplify and boost word of mouth.
Referral incentive ideas that work in 2021
- An ideal referral incentive idea well suited for modern marketing strategies would be rewarding your customers with store or subscription credit. Being incredibly cost effective, this approach is exclusively used for paid programs and subscription tools. Rewarding customers with store or subscription credit has also effectively increased repeated purchasing behavior.
- Instead of giving your customers something absolutely new, give them an upgraded version of what they already have! This is an excellent way of showing your gratitude towards loyal customers, who show repeated interest in your brand and bring you new leads. This can be as complicated as rewarding your customer with the pro-version of a product, after they had purchased the premium. The best example of a brand following this referral incentive idea is Dropbox. Dropbox allows loyal customers to get over 500 MB of storage space, after each successful referral made.
- A referral contest that grows your brand, is one of the best incentive ideas. Referral contests can be a great way to effectively use social media marketing strategies, to fascinate old customers and make new ones your loyal brand advocates. It successfully increases campaign contribution, as contests and sweepstakes are exceptional in engaging customers into entering contests that can win them enticing rewards.
- It is important to provide customers with exclusive experiences that make them feel important and excited. Giving small service discounts can be a great way to spread the word out there.
Brands with epic referral incentive ideas-
- Starbucks- Starbucks owes its success to a massive following and the very successful referral incentive idea. Starbucks had set its benchmark by gifting reward programs of elegance and sophistication with the “Gold”. While this referral incentive mostly caters to refinement and grace, the previous referral program rewarded loyal advocates with “Six Stars” as a part of Starbucks’ star reward system, allowing a friend to get a drink absolutely for free! The quality of the product is the central pillar of any successful marketing strategy along with well planned incentive ideas. Along with creating a strong brand image, Starbucks didn’t advertise its product in the conventional way. Generating 40% of its revenue, Starbucks’ reward programs boosted up its sales to almost 7% in the year 2019. In short, Starbucks referral program is iconic as the brand came up with a tiered loyalty program to align with their brand name and logo. To reward their customers, the brand had enabled them to get a star with each purchase. Through the earned stars, customers can get free rewards along with free personalized gifts!
- Amazon Prime– Amazon prime now has a strong family of over 150 million members and most of its credit goes to its creative referral incentives. The constructive use of the social proofs are highly enticing and credible. The trick behind making an excellent referral program was silently guiding customers to sign up for premium content, making it look like more of a natural process. By offering only $5 to the referrer the brand was successful in spreading the word and enticing customers across the world.
- Sephora- Sephora is a beauty and fashion outlet based in the United States. Every Sephora customer is eligible for Sephora’s loyalty rewards program. A customer who spends more than $350 gets upgraded to the “Very important beauty insider” status while customers who spend more than $1000 gets the VIB Rouge Membership status. Personalization is the factor that helps the brand create emotional ties with its customer. Strategic use of social media influencers who review the products after using them help create effective awareness. By interacting with fans via social media, partnering with industry celebs, Sephora aces customer engagement and strong customer rapport.