For direct-to-consumer brands, the greatest challenge of growing a customer base is doing so without any help from online and in-store retailers.
Referral marketing has become one of the go-to strategies these businesses use to spread the word about their brand. A referral program can also quickly scale both customers and revenue, allowing DTC brands to achieve a steep growth trajectory.
But there’s no one-size-fits-all approach to driving referrals for DTC brands. Here’s a look at four successful referral programs and the different strategies they use to deliver impressive results.
1. Away Incentivizes Repeat Referral Behavior
Like many other brands launching a referral program, travel brand Away opted for a double-sided offer structure that rewards the advocate and provides an incentive to the friend. This double-sided approach is a best practice in order to maximize referral participation and achieve positive ROI.
Unlike other brands that may provide a double-sided offer, though, Away chose to incentivize repeat referral behavior by rewarding advocates with a $20 account credit per referral—and allowing advocates to combine credits together to put toward a larger purchase.
This approach gives advocates even greater incentive to continue to refer Away to friends and family and, in turn, increases customer retention and LTV. Providing referred friends with an incentive also increases the likelihood of conversion, and referred visitors tend to convert 5x faster than site visitors coming in from other channels.
2. Dr. Squatch A/B Tests Its Way into the Right Offer Strategy
Like Away, men’s soap brand Dr. Squatch built a referral program that featured a double-sided incentive for both advocates and their friends. But the value of this double-sided offer was increased by A/B testing to determine whether friends were more persuaded to convert by a $10 credit or a free bar of soap.
Through Friendbuy’s A/B testing tool, Dr. Squatch found that the free bar of soap provided more incentive to purchase. This insight allowed the brand to iterate its referral program quickly, resulting in the launch of its current referral offer: “Give a bar [of soap], get a bar.”
3. Casper Leverages Referrals to Drive Additional Product Adoption
Originally built around a high-consideration purchase, DTC mattress brand Casper has launched auxiliary products, including pillows, dog beds, and other accessories. Its evergreen referral program originally centered around driving new customer acquisition for mattress purchases, but the company recently decided to experiment with allowing its customers to refer friends to purchase other accessories and receive varying rewards for doing so.
With the brand’s double-sided referral offer, advocates have the option of referring friends to purchase either pillows or a mattress, depending on what their friend may be in the market for. Advocates receive gift cards for referring their friends, which also incentivizes repeat referral behavior. Friends receive a 15 percent discount off their first purchase from the brand.
4. Nuuly Scales Through Influencer-Driven Referrals
When the clothing rental subscription service Nuuly launched its referral marketing program, the company focused its campaign on driving shares among a select group of online influencers that could reach a large, relevant audience through their social networks.
This approach laid the foundation for fast scaling of the company’s customer base: Nuuly’s referral program generated more than 2,500 new subscribers from its top 10 online advocates. Some of those advocates were solely responsible for more than 500 new sign-ups, resulting in a dramatic increase in the company’s active customer base.
Don’t Be Afraid to Be a Copycat
These examples are just a taste of the different referral marketing strategies that have helped DTC brands generate fast, sustainable success. If you’re looking for inspiration, there’s no shame in borrowing from the strategies that worked for other brands. If it worked for another brand, it just might work for yours, too.
Take a deeper dive into the benefits of referral marketing for DTC brands—download our Nuuly case study today.