We all trust our family, friends, and even strangers more than we trust advertisements and brands right? We’re influenced the most by recommendations, reviews, most importantly, referrals. This all explains why businesses nowadays are relying heavily on referral programs as a form of marketing & customer acquisition.
But what are referral programs, and what is a successful example of one? Let’s break it all down.
What are referral programs?
A referral program is simply a process in which you reward customers for spreading the word about your product or service. Referral marketing can take many forms, but at its heart, it’s a way to get your biggest fans to help spread the word about your brand. In other words, referral marketing turns your current customers into brand advocates.
Referrals help drive profits up while keeping costs low. It’s always been known how important word-of-mouth marketing is, but no one knew how its progress can be tracked. When you add a referral program to a strong foundation, word-of-mouth has the potential to skyrocket and be tracked. This is because a referral program not only encourages sharing but makes it easy and fun too.
To make things clearer, we’ll talk about one of the most successful referral programs by Robinhood Markets.
Robinhood’s Referral Program
Robinhood Markets, Inc, which is an American financial services company that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrencies via a mobile app, got widely known for its rereferral program as it bought over 1 million users pre-launch.
As part of the Robinhood team’s pre-launch strategy, potential app lovers were invited to gain invitation-only, early access to its private beta. Robinhood focused on achieving two things: keeping the process simple and getting people to share. They kept the process simple by keeping the sign-up process short. When a person arrived on the early-access landing page, only one task stood between them and the chance to be the first to use the Robinhood app: entering their email address
But how did this turn into million referrals? Gamification.
Cause who doesn’t love playing games? And then get rewarded for doing that?
When users signed up for Robinhood’s Referral, they were put on the waiting list. The higher a person’s position on the list, the earlier the Robinhood fan got access to the beta. Everyone got to see their position on the waiting list and even got the chance to jump ahead in the queue by inviting & sharing Robinhood’s exclusive offer with others in just one click.
There’s always a top shared priority or goal between all businesses and their acquiring customers. You’d think it would be very challenging to find a cost-effective approach when it comes to customer acquisition strategies, but referral programs proved otherwise. Well-executed referral programs can make a significant impact on customer acquisition, and boost a company’s revenue in the process.