REFERRAL MARKETING STRATEGY

10 Referral Program Examples From Our Top Performers

by Friendbuy

May 11, 2015


Over time, campaigns stagnate, and businesses are left wondering why their marketing expenditures are no longer delivering the results they expect.

Sound familiar?

If so, you're not alone.

According to a recent survey, marketers estimate that 26 percent of their budget is wasted on ineffective strategies or channels.

Oof.

How can you avoid falling into this trap?

By employing marketing strategies that actually work - like referral marketing.

Whether this involves revamping your existing referral marketing program or kick-starting your very first campaign, here are industry-leading referral program examples to pull inspiration from.

 

The Anatomy of Customer Referral Programs

What makes a customer referral program work? Let's start by quickly looking at the anatomy of successful customer referral programs to find out.

 

Referral Incentives

Referral programs start with an incentive structure.

Referral incentives are a method of enticing prospective or existing customers to refer their friends and family members to a business with the goal of increasing sales and overall growth.

There are two different referral program incentive structures that can be used. One-sided and two-sided referral incentives:

  1. One-sided referral incentives offer rewards to the Advocate, but not the referred Friend. This structure keeps costs down but can also be less motivating for new customers to make a purchase or sign up for a business' services.
  2. Two-sided referral incentives offer rewards for both the Advocate and the Friend. Although the costs involved are a bit higher, a two-sided referral program creates more motivation for each party, as they will both benefit from participating in the referral campaign.

Further reading: to learn more about how to attract high-value customers, see our incentivize best customers guide.

 

Referral Rewards

Whether it be a one-side or two-sided referral incentive, you'll need to offer referral rewards to your referral process to, well, incentivize referrals and boost customer acquisition.

The types of rewards that are awarded to a new or existing customer come in all shapes and sizes, including:

  1. Cash rewards are incentives that offer cash to Advocates for referring new customers.
  2. Percentage discount gives a percentage discount that an Advocate or Friend can use on their next purchase.
  3. Store credit is typically credit for a specific brand that can be put towards a future purchase.  
  4. Free product referral programs encourage existing customers and referred friends with free products
  5. Free subscription period referral program incentives can be in the form of a discount on a subscription price or a bonus added to the subscriber's account.
  6. Gift card incentives are, well, gift cards! Incentivizing Advocates to refer for a gift card is particularly effective for brands who sell products with a low repeat purchase rate, such as a mattress or furniture company. Donation referral programs offer Advocates the opportunity to turn a successful referral into a contribution to a predetermined charity, non-for-profit, or foundation.
  7. Custom rewards allow businesses to set custom offerings. For example, a business that offers flight experiences may reward customers with a free or discounted flight experience.

 

How to Get Referrals 

Now that we’ve covered the referral incentive structure and the different rewards that you can offer your Advocates and Friends, let's talk about ways to promote your budding referral program.

 

When, Where, And How to Promote Your Program

When it comes to referral marketing, timing, placement, and methodology is everything.

Here at Friendbuy, we've developed a set of tried and tested ingredients for a success referral program that we encourage our customers to implement:

Awareness + Accessibility + Ease of Use = Impulse Referrals.

 

When to Promote Your Program

To give you a better understanding of how this works, let's break down each portion of this formula:

  • Awareness. The more eyes you have on your referral marketing campaign, the more referrals you will get. Friendbuy's features make it easy to create email or website-based promotional material, making the process of getting the good word out about your referral program a breeze.
  • Accessibility. Ideally, your customers need to be able to access your referral program quickly. Impulse referrals happen in real-time, so your customers need to be able to find how to refer their friends within seconds. That’s why Friendbuy recommends making your referral program accessible with key placements, such as in your navigation bar, email headers, and more. 
  • Ease-of-use. Ease of use is also important. If the process of referring friends is complicated or time-consuming, customers will be less likely to participate. That's why Friendbuy provides customers with a personalized referral link (PURL) so Advocates can start sharing right away across all platforms.
  • Impulse referrals Combine these three ingredients and you've just developed yourself a recipe for impulse referrals. Impulse referrals are in the moment, and quick and easy to take part in.

 

Where to Promote Your Program

Okay. Now we've discussed the when, let's dive into the where.

There are several places to promote a referral program, depending on where your customers are and how you want to reach them.

  • Post-purchase emails. You can also promote your referral program in post-purchase emails. Remind loyal customers they can earn rewards for referring their friends and provide a link directly to your referral program landing page.
  • Website ribbons. Website ribbons can live on all pages and link directly to your referral program landing page or trigger a referral overlay widget.
  • Email blasts. You should also send monthly or quarterly email blasts to remind your customers about your referral program and how they can take part.

 

How to Promote Your Program

And last? The how.

Here are some customer referral campaign ideas you can use to promote your program:

  • Referral contests. Referral contests are a great way to boost referral program success. For example, during their recent referral contest, the apparel brand Huckberry awarded $1,000 to the Advocate that referred the most friends during the campaign.
  • Social media campaigns. You can create a social media referral campaign on platforms like Facebook, TikTok, or Instagram. This is a quick and effective way to increase awareness.
  • Seasonal campaigns. Seasonal campaigns are a great way to take advantage of events and holidays. Offering exclusive rewards or prizes for referrals during specific times of the year can engage your customers and drive more referrals. Further reading: learn how to take advantage of the holiday season with these holiday referral marketing ideas.
  • Social gifting. With social gifting, not only do Advocates and Friends receive rewards but also a charity of the brand’s choosing.
  • Subscription-based campaign. With this type of campaign, businesses offer referrers and/or the referred a subscription-based reward. Further reading: check out our subscription referral program examples for more information on subscription-based referral campaigns.

 

Referral Marketing Best Practices

There are several best practices that businesses can follow to maximize the effectiveness of their referral marketing campaigns. These include a focus on:

  • Placement. The visibility of assets like referral widgets and call-to-actions (CTAs) have a direct impact on conversions and the overall success of a referral program. Referral widgets should be placed in locations like a website’s homepage, dedicated referral page, and order confirmation pages. Referral CTAs can be placed in referral emails, referral ribbons, and used within referral widgets.
  • Promotion. Brands can promote their referral program to their email list, social media audience, and right on their website to reach more current and prospective customers. For example, promotional posts to social media that link to a referral landing page or standalone referral page are great starting points. An email blast to an entire email list is also a great way to get the good word out about your referral program.
  • Optimization. Using A/B testing to optimize the three steps of the referral funnel — 1) sharing rate, 2) referral visits, and 3) conversion rates — is key to the success of a campaign. Subtle adjustments to CTA placement, typography, and the tone of written copy can be the difference between a referral program flopping or succeeding.

 

Referral Program Examples That Increased Profits

Okay. Now that we've tackled the technicalities of successful referral programs, it's inspiration time.

To get your creative juices flowing, dig your teeth into these best referral programs examples that use Friendbuy.

 

1. Natural Dog Company

  • Industry: Pet
  • Referral Rewards: $10 reward
  • Promotion Type: Dedicated web page
  • CTA: "Refer-a-friend and you each get $10"

If you're a health conscious dog lover, you'll appreciate how difficult it can be to source natural products for your furry friend. Now, Natural Dog Company is making it even easier for new customers to discover its products through its referral marketing program.

Here's how it works: Thanks to a wide range of integrations, a powerful trio made of Klaviyo, Okendo, and Friendbuy set the scene for a seriously potent referral marketing campaign. When an existing customer refers a friend, who then makes a purchase on the Natural Dog Company website, both the Advocate and Friend will receive a $10 store credit.

Why did the company employ this type of referral program?

Allison Kelly, Natural Dog Company's Director of Creative Branding and Customer Retention, explains:

“For me, the entire process was about making a referral program that wasn’t an afterthought, and specifically wasn’t just an extension of a loyalty program. We wanted to structure a referral program that goes beyond what traditional referral programs do, and also integrates with our existing marketing campaigns.”

How was this achieved? Allison goes onto say:

“So that was really a no-brainer for us when we were able to combine Friendbuy, Klaviyo and Okendo - being able to combine that tech stack to meet our customers where they’re at, give them the opportunities to leave reviews, to provide a referral, and to respond to our emails.”

The result: Overall, the referral program has been a huge success, driving new traffic and sales to the company's website. In fact, thanks to the refer-a-friend program, the Natural Dog Company saw a 20% higher average order value (AOV) and a 5% jump in the number of email subscribers. Many customers have been so impressed that they've become brand ambassadors, spreading the word about Natural Dog Company on social media and beyond.

Who this is for: Give $10, get $10 referral programs are best for businesses that offer products or services that are low-cost or have relatively small profit margins.

Further reading: How Natural Dog Company Accelerates Subscriber Growth.

 

2. Thinx

  • Industry: Health and Wellness
  • Referral Rewards: $10 Reward
  • Promotion Type: Dedicated web page
  • CTA: "Give $10, get $10"

Since their launch in 2011, Thinx has been a leading innovator in the menstrual clothing industry. Their absorbent panties have become a staple for women who menstruate, post-childbirth, and experience light incontinence. In addition to their quality products, Thinx is also well-known for their marketing prowess—which has helped them amass a large and loyal following.

To add to their marketing arsenal, Thinx introduced a referral marketing program as a supplementary way to engage with their existing customers while also attracting new customers. The program rewards customers for referring friends and family members to purchase Thinx panties. For every person who registers through an existing customer's referral link and makes a purchase, both the Advocate and Friend receive $10 off of their next order.

Brendan Hastings, SVP Engineering and Digital Product at Thinx, discusses his thoughts on the program so far:

“Friendbuy collaborated with us to develop stackable credits on Shopify Plus. It’s really exciting and the results have been astounding—our referral program has already doubled in size.”

The result: As Brendan alludes to, with a 114% revenue growth year-over-year, a 2x increase in referral program size, and less than a $1 cost per acquisition (the average in the apparel industry coming in at $129), it's fair to say the program has been widely successful.

Who this is for: A $10, get $10 referral program is best suited for businesses that offer a product or service that solves a common problem and is therefore highly shareable. 

Further reading: How Friendbuy’s Shopify Plus Integration Helped Thinx Grow Referral Revenue.

 

3. Get Back Necklaces

  • Industry: Accessories
  • Referral Rewards: Give the referred 50% off a $40+ purchase, and the advocate receives 50% off their next purchase
  • Promotion Type: Dedicated web page
  • CTA: "Get 50% off"

Get Back Necklaces, a leading provider of custom engraved necklaces and personalized jewelry, has implemented a referral program to great success. When current customers refer friends and family members to Get Back Necklaces, both parties earn a discount when the Friend makes their first purchase.

To take part in the referral program, Advocates create a free account on the Get Back Necklaces website, where they’ll find their Personalized URL (PURL) to share with their Friends. When a Friend uses the link to make a purchase on the company’s website, both the Advocate and Friend receive a 50% discount.

“After switching to Friendbuy, our conversion rate more than doubled and our referral revenue increased by 320%. Then we switched from a dollar-based reward program to percentage-based and our share rate and revenue per share rate doubled again.”

Explains Maclaine Borne, E-Commerce Manager of Get Back Necklaces.

Even more impressive, thanks to Friendbuy's built-in A/B testing functionality, Get Back Necklaces switched up their initial referral offer and noticeably increased their referral revenue.

Maclaine explains,

“For eight months, we used a dollar-based offer and then we tried out a percentage-based offer. After the switch, we saw a massive increase in our revenue, our conversion rate, and our revenue per share. It’s had a big impact, both on customer retention and acquisition.”

The referral program shifted from a give $10, get $10 incentive and moved to the current give 50%, get 50% model.

The result: An astounding 700% increase in referral revenue.

Who this is for: A give 50, get 50 referral program model can be a powerful tool for just about any type of business. If you’re looking to increase word-of-mouth marketing and improve customer acquisition, then try a percentage-based offer.

Further reading: How Friendbuy’s Built-In Optimization Tools Helped Get Back Necklaces Grow Referral Revenue by 700%.

 

4. Byte

  • Industry: Teledentistry
  • Referral Rewards: get $100, friend receives 85% off impressions kit and $100 off aligners
  • Promotion Type: Dedicated web page
  • CTA: "Get $100 for every friend you refer"

With Byte, a teledentistry provider, patients can see a dentist from the comfort of their own home. No more visits to the dentist's office—simply dial-up the dentist on a computer or phone.

Cool concept, right?

For sure. But even more impressively, Byte's Friendbuy-powered referral program is proving to be Byte's return on investment (ROI) powerhouse. The program has been instrumental in helping Byte attract new patients and grow their business.

Aaron Hall, Byte's Marketing & Referral Program Manager, states:

“The referral program is our highest converting channel, with a conversion rate of approximately 50%. Compared to other marketing channels, referral is the most effective and the most efficient.”

Through the referral program, Byte rewards patients for referring their friends and family members to the practice. Referrers earn $100 for every new customer they refer and the referred customer earns 85% off their impression kit and $100 off their aligners.

The referral program has helped Byte attract new patients and grow their business.

Aaron goes onto say,

“Byte takes care of our customers, so they want to refer their friends. Friendbuy facilitated a really easy way for customers to kick out a referral link to their friends. We’ve even seen some people who aren’t officially ‘influencers’ post their referral links in YouTube reviews.”

In addition to retaining existing customers and attracting new patients, the program has also helped increase revenue and drive down costs. Thanks to the referral program, Byte is seeing better results than through any other marketing channel.

The result: The referral program has yielded a 2x on referral transactions year over year and an impressive 50% conversion rate on referred customers.

Who this is for: This type of incentive structure is best for service-based businesses that have a loyal customer base. 

Further reading: Byte’s Friendbuy-Powered Referral Program Drives More ROI than Any Other Channel.

 

5. Nuuly

  • Industry: Apparel
  • Referral Rewards: Give $10, get $10
  • Promotion Type: Dedicated web page
  • CTA: "Refer-a-Friend Program"

Looking for a way to save on your clothing expenses? Nuuly's refer-a-friend program may be just what you need. For every referred friend that signs up for a Nuuly subscription, the advocate receives $10 off their own monthly subscription. Plus, the friend receives $10 off their monthly subscription, too.

So, how does it work?

After the referring customer signs up, they'll receive an email notification with a unique referral link. This link can be shared with as many friends as they like, each successful referral earning the advocate $10 off their monthly subscription.

Rachel Smith, CRM & Analytics Manager at Nuuly, knew that referral marketing was a key way to grow the subscription-based business:

“Subscription-based business models need referrals and word-of-mouth marketing. We knew we needed it, but there was no one at Nuuly that had ever worked on a referral program.”

That's where Friendbuy's onboarding team stepped in; working alongside Nuuly's marketing experts, the duo wasted no time and put together an effective referral program that was destined to find success.

Rachel explains this process:

“We went all-in and integrated customer lifecycle touchpoints. We made it super easy for our customers to refer-a-friend at relevant times. That’s been so successful in terms of new subscriber acquisition.”

The result: Since launch, Nuuly's referral program has found extraordinary success. The company's biggest fans—some referring over 500 new subscribers—share referral links on their social media channels regularly, bringing over 2,500 subscribers in just a few weeks.

Who this is for: Subscription-based businesses that have physical products and loyal customers. 

Further reading: How Friendbuy Helped Nuuly Drive Thousands of Subscriptions Within Weeks of Launch.

 

6. Tonal

  • Industry: Wellness
  • Referral Rewards: Give $100, get $50
  • Promotion Type: Mobile app 
  • CTA: "Refer-a-friend. Get $50"

If you’re looking to get your friends on the best workout routine out there, Tonal is here to help. With Tonal's referral program, you can earn rewards for every friend who purchases a Tonal strength training machine.

How does it work?

Advocates simply refer their friends and family to Tonal using a unique referral link generated by Friendbuy inside the company's app. Once the referred Friend uses the generated link to make a Tonal purchase, the Advocate receives $50 to spend in the Tonal Gear Shop. In return, the Friend gets $100 off a Tonal machine.

It's a win-win for everyone involved.

Tonal's referral program was made possible by Friendbuy.

Rich Krolikowski, Tonal's Growth Marketing Manager of eCommerce, shares his thoughts,

"The Friendbuy experience is honest. It’s efficient, and it continues to evolve to meet our needs. With a partner this good, there’s no need to look anywhere else."

Rich details his experiences with the Friendbuy platform,

“The dashboard is awesome, support has been stellar, and their APIs make the experience customizable and flexible. We launched it through the app and quickly had transparency around successful referrals. It’s a no-brainer.”

The result: Since launching its referral program, Tonal’s referral program is now responsible for 4-7% of the company's total revenue (growing month over month) and, thanks to the program, the company has seen a 500% conversion rate increase over other marketing channels.

Who this is for: This model works well for businesses who want to grow their customer base and re-engage customers after purchasing big-ticket items.

Further reading: How Friendbuy Drives Up to 7% of Tonal's Online Revenue.

 

7. Flaviar

  • Industry: Food and beverage
  • Referral Rewards: Both parties receive a free Tasting Box or bottle of their choice
  • Promotion Type: Dedicated web page
  • CTA: “Join the Club. Invite Friends. Get Rewards.”

Flaviar, a subscription-based online liquor store, has seen significant success with its referral program. Since the launch of the program, there has been an influx of customer referrals and an overall spike in revenue. The company credits this success to the referral campaign’s simplicity and the rewards it offers.

To take part in Flaviar's referral program, Advocates simply share their unique referral code with Friends. If a Friend subscribes to one of Flaviar's membership plans, both the Advocate and Friend receive a free Tasting Box or spirits bottle of their choosing.

Matija Valinger Sluga, Product Manager at Flaviar, explains the team's thought process when kick-starting their referral program,

“We started with a hypothesis: if our members are satisfied and happy with our product, they’ll share it with friends and family. That was the goal behind adding a referral program, and it’s worked out well.”

Matija continues,

“Friendbuy proved our hypothesis that if members are satisfied with our product and service, they’ll want to share it. We didn’t expect this program to be such a huge success—and we’re really happy with how many new members we get on a weekly basis.”

The result: Since launch, Flaviar has seen a 256% increase in referral revenue growth year-over-year. They've also seen an 130% increase in social shares, and a 300% increase in conversions. This goes to show that referral programs can be successful both in driving sales and also increasing brand awareness.

Who this is for: Free samples are great incentives for the food and beverage industry.

Further reading: How Flaviar Grew Referral Revenue by 256% Year-over-Year with Friendbuy.

 

8. SPANX

  • Industry: Apparel
  • Referral Rewards: Give 15%, get $20
  • Promotion Type: dedicated web page
  • CTA: "Get $20 for every friend you refer"

SPANX, a company that makes shapewear and lingerie, has seen outstanding success with its referral program.

The underwear and shapewear company has a well-designed referral program that is simple to use and rewards both the Advocate and the Friend. Customers can refer their friends by sharing a special code or link. If the Friend purchases something from SPANX, then they will receive 15% off their next purchase. In return, the Advocate receives a $20 credit to their account.

As great as this program sounds, it hasn't always been smooth-sailing.

Nadina Bourgeois, Senior Digital Paid Manager at SPANX, talks to her team's pain points when trying to promote their line of shapewear,

“SPANX is built on word-of-mouth marketing, whether it’s people telling their friends about our products or getting Oprah’s seal of approval. But how could we grow via word-of-mouth in the digital realm?”

The answer was a Friendbuy powered referral program.

“Most software providers sell the tool and then leave you to figure out the rest. Friendbuy is the complete opposite. They’ve been the most hands on of any software as a service company I’ve ever worked with.”

The Friendbuy team helped SPANX fine tune their referral program and find the right kind of rewards to offer their customers.

The result: SPANX has found their referral program has been so successful that it has resulted in an 8% higher average order value (AOV) with referred customers than standard orders and a 15% conversion rate from referred customers.

Who this is for: This type of program is best suited for businesses that offer products or services that have a relatively large profit margin, like specialized retail clothing.

Further reading: How SPANX Uses Friendbuy to Achieve a 15% Conversion Rate from Referred Customers.

 

9. Intuit Quickbooks

  • Industry: SaaS
  • Referral Rewards: Give 50% off a friend's first 6 months, get $100 Visa prepaid card for every friend that subscribes
  • Promotion Type: Dedicated web page
  • CTA: “Share the gift of organized finances.”

Intuit QuickBooks, the popular accounting software, has launched a referral program to help new users get started with their service. The referral program is simple: for every Friend a happy customer refers, the Advocate receives a $100 Visa prepaid card to use wherever they please. The Friend receives a 50% discount off the first 6 months of their Intuit subscription.

Who this is for: Referral programs that offer handsome rewards like $100 Visa prepaid cards are best for brand’s that have low operating costs, like a subscription-based service, and have the luxury of high-profit margins.

 

10. Mint Mobile

  • Industry: Technology
  • Referral Rewards: Refer 5 friends and receive $240
  • Promotion Type: Dedicated web page
  • CTA: Refer-a-friend, earn a free year of Mint

Mint Mobile is a telecommunications company that provides wireless service to customers in the United States. Mint Mobile operates a nationwide network backboned off of T-Mobile infrastructure. The company offers a variety of plans for its customers, including unlimited talk and text, unlimited data, and international calling.

Mint Mobile's referral campaign is one of the most generous in the market. For every Friend that you refer to Mint Mobile, Advocates receive a $25 account credit. The best part? To encourage referrals, Mint Mobile's referral program is accumulative. Meaning, Advocates will earn credits as follows: 

  1. referral #1 = $25, 
  2. referral #2 = $30, 
  3. referral #3 = $35, 
  4. referral #4 = $40, 
  5. referral #5 = $110; 

Earning totally $240.

The 6th referral?

Referral #6 starts you back at referral #1. Advocates can make 10 referrals per year, up to $480 worth, which can be used toward Mint Mobile’s services. As this Advocate writes on Medium, he received four years of Mint Mobile service using the company's referral program.

In return, the referred Friend earns a $15 referral bonus when signing up for one of Mint Mobile's services. Mint Mobile makes it easy to refer Friends by including a "Referral Program" tab right inside their dashboard. There, Advocates can enter their friend's phone number and hit send. The Friend will then receive an SMS with all the details and a unique link to sign up. 

Once they sign up, both the Advocate and referred Friend receive the credit to their accounts.

The result: Mint Mobile kicked off their referral program back in 2018. Since then, the company’s Friendbuy-driven referral program has proven to be an excellent referral conduit, increasing loyalty to Mint Mobile and bringing new customers into the fold.

Who this is for: Tiered referral programs are perfect for customers who are likely to make repeat purchases.

 

Final Thoughts

Feeling inspired?

Here at Friendbuy, we're here to help. Our platform allows users to create custom referral links, track referrals, and reward Advocates who send new customers your way. 

So what are you waiting for?

Whether you're ready to revamp your existing program or ready to launch your very first campaign, contact Friendbuy today.

 

See how Tonal drives up to 7% of online revenue with a Friendbuy-powered referral program