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It’s easy to come up with an enticing referral program offer strategy when you sell different types of products that naturally drive repeat purchases. Advocates love to get free merchandise, discounts or store credit toward future purchases, and other great incentives for products they buy regularly. 

But what if you sell a limited number of SKUs, or if your products are typically one-time purchases? You have a great product, customers love it, and they’re excited to tell their friends about it, but you’re unlikely to entice them to continue to refer with a discount on a future purchase. Let’s use Burrow as an example. Each customer might only need one or two pieces of large furniture, but they each have dozens of friends. 

Burrow recognizes the value of word-of-mouth advertising, especially when it comes to getting recommendations from friends before making major purchases. The innovative furniture brand provides personalized URLs to customers to share savings with their friends. In return, advocates get a $50 Amazon gift card whenever friends make a qualifying purchase. 

How to Determine the Right Offer Strategy for Your Referral Program Example 1How to Determine the Right Offer Strategy for Your Referral Program Example 2

"There's nothing more powerful than word of mouth. Learning about a new product from a friend is the original form of advertising—and we've found that Friendbuy + Tremendous enable us to incentivize and reward this behavior at scale. Leveraging Tremendous to compensate brand advocates has been huge for us and allows for the perception of a higher value reward than traditional store credit." —Whitney Blau, Head of Conversational Marketing at Burrow

Get creative with your offer strategy and referral incentives to encourage repeat referral behavior, even if you have limited repeat sales.  

Does your offer entice customers to take action?

Your happy customers want to spread the joy, but they’re also busy people with other priorities. Even though it might take only a few clicks to refer a friend, the reward should be worth the effort. 

Pro tip: Language matters. If you’re not seeing a lot of interest in your offer, it may be about how it’s presented, not the quality of the offer itself. Friendbuy customer Fair Harbor learned this when they updated the referral call to action (CTA) on their website from “Refer a friend” to “Get $20.” The offer was the same—$20 toward a future order—but the results were dramatically different. After changing the language to include the incentive in the CTA, they achieved more than 12 times the referral conversions. This jump from around 200 to 2,500 conversions translated to an additional $5,000-$10,000 of revenue per month.  

How to Determine the Right Offer Strategy for Your Referral Program Example 3

Are your rewards worth sharing?

If you sell big-ticket items or products that require more consideration, think about a two-sided offer structure that incentivizes repeat referral behavior. This means that the advocate receives a reward and their friends get an incentive to help them follow through on a purchase.

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Advocates are more motivated to refer their friends when they can also offer their friends a discount—but don’t forget to take care of your loyal followers as well. For your advocates who already have the one product they need from you, think about what might influence them to share referral links with friends. Using the couch example, perhaps you could offer some Amazon gift cards so they can buy a cozy new throw blanket or a Hulu gift card so they can watch some great flicks from their new couch.

Does your offer improve with more referrals?

More referrals should mean better rewards, right? For some referral programs, this is a great offer strategy. If you want to recognize your superstar advocates with meaningful incentives, you can do this through either stackable or tiered rewards.

Stackable rewards allow advocates to continue racking up incentives, such as a $20 gift card for every referral that makes a purchase. Maybe they want to bank as many Amazon bucks as they can so they can get a new end table for said fabulous new couch.  

Tiered rewards get better as you refer more friends. For example, you might offer a $10 gift card for the first 5 referrals, $20 for 6-20 referrals, and $50 for each referral after that. Policygenius rewards advocates with a $100 Amazon gift card when their friends sign a life insurance application. For every three friends that sign up, Policygenius throws in a bonus $125 gift card. 

How to Determine the Right Offer Strategy for Your Referral Program Example 4

How to Determine the Right Offer Strategy for Your Referral Program Example 5

Is your offer delivered seamlessly to advocates and referred friends?

The easier it is to claim and receive a reward, the more likely people will refer multiple times. The referral experience should be seamless and in line with the branding and messaging used in other marketing emails customers receive from your company. On the back end, fulfillment should be automated so your team doesn’t have to dedicate precious resources to fulfilling rewards. 

Friendbuy’s partnership with Tremendous makes it easy to offer third-party gift cards or cold, hard cash to customers who refer their friends. After a successful referral conversion, Tremendous automatically generates reward links that are dynamically inserted into reward emails sent by Friendbuy to advocates and referred friends. You pick the reward option(s), messaging, and visual presentation. All of this can be done at face value for all of their digital rewards and prepaid cards, so you don't have to worry about additional fees.

Offer third-party gift cards with Friendbuy and Tremendous.

Your offer strategy doesn’t have to check all of these boxes, but you should be able to answer yes to at least one of the three questions above. Even if your business model is not set up for repeat purchases, you can still offer valuable rewards to the loyal customers who keep recommending your products. Friendbuy’s partnership with Tremendous makes offering third-party gift cards and cash completely seamless. To learn more about creating the best offer strategy for your brand, download Referral Marketing: The Essential Guide here.

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