The Best Referral Rewards program for you to choose from!
Updated: Jun 28
This was an Instagram post we stumbled upon last month.
Remember when the same Google Pay ran a referral program to onboard new members where the referee got instant cashback/ points? They tapped into the best way to expand the customer base for a P2P Fintech app with it. But referral programs come in all shapes and sizes and you have the challenge of choosing the Best Referral Rewards that will work for your brand and align with your requirements, so you don’t get such comments from customers.
What if we tell you it’s simple?
Referral reward programs are a go-to way for businesses looking to expand their customer base through oral marketing. Incentives are given to existing customers for successfully referring new ones, driving sales and awareness for the brand.
By choosing referral rewards smartly, you can turn your customers into your brand’s most valuable advocates! Let us learn how to do exactly that in this guide.
What are Referral Incentives or Rewards?
Referral incentives or rewards are welfare given to people who allude to others about a brand, often in the form of discounts, credits, etc to increase the brand’s awareness.
Now there is a question.
Why do referrals work so well compared to other programs?
Referral programs are good for businesses as they depend on trust and personal connections, making customers more likely to try a recommended product or service.
What are the perks of referrals?
Referral programs leverage trust and recommendations, leading to more sales and loyal customers. Referrals act as free advertising, turning happy customers into brand advocates and boosting brand reputation in today's competitive market.
1. Expanded Customer Reach: Referrals expand a brand's customer base by manipulating existing networks.
2. Enhanced Customer Loyalty: Referrals are built on trust and personal connections.
3. Extended Customer Engagement: Referrals go beyond just a one-time recommendation, they become more involved and connected with the brand.
Types of Referral Incentives
One-sided Incentives
Referring new customers rewards only the referrer and not the person being referred.
Two-sided Incentives
When both the referrer and the referred person receive rewards. This is advantageous for both parties involved. Managing this type of incentive can be more complex and costly for the company. But it is also incredibly easy to set up with Flyy.
Tiered rewards (Milestone Rewards)
Milestone Rewards are offered when customers reach key stages or achieve important goals. It could be based on referrals they’ve made, purchases from those referrals, or other actions that make a difference in the program’s success.
Bump rewards
Bump rewards are like surprise bonuses or boosts that advocates get when they reach specific goals in the referral program.
Key Considerations for Selecting Referral Rewards Suitable for Your Brand
Step 1: Understand your goals
Understanding your goals is crucial when selecting referral rewards that are suitable for your brand. It could be either of the following:
1. Increase Brand Awareness
2. Boost Customer Acquisition
3. Encourage Repeat Purchases
Based on your intended goal, you can choose the best referral program that could help you achieve it.
Step 2: Know Your Audience
By understanding your audience you can get a successful referral program suitable for them. When you know your ideal customers, what motivates them, and what they value, you can tailor your approach to resonate with their specific needs and preferences.
Know Your Ideal Customers
Take time to identify your ideal customers based on their demographics, interests, behavior patterns, etc. Look into their age, gender, location, income level, and what they like to do. It helps to create targeted referral strategies that resonate with them.
Understand Their Motivations
Try to understand what keeps your ideal customers engaging with your brand and refer others. Some might want to share your products or services with their friends, while others might be looking for social recognition or exclusive benefits.
Offer Valued Rewards
Make sure the rewards you offer align with what your ideal customers value the most. This will vary depending on their motivations.
Step 3: Explore Reward Options
There are various kinds of referral incentives. Every type of incentive carries its unique advantages and can yield results when implemented appropriately.
1. Fixed discounts or vouchers
Giving discounts or vouchers for future orders is a unique way to build customer loyalty. Businesses often provide a fixed discount or credit for the referrer and the referred friend, like "Refer a friend and you both get Rs.100 off your next purchase."
2. Percentage-based discounts
The most popular approach is offering a percentage-based discount. For example, "Refer a friend and get 15% off your next order." This type of bonus can be particularly appealing for higher-priced items or services.
3. Cash rewards and gift cards
Providing a cash reward for a referral can be a great motivation. It's highly appreciated, especially if your customers value direct cash rewards. This method is widely used in the banking sector.
4. Loyalty points
If you offer a loyalty program, integrate it with your referral program. Providing points that customers can accumulate and redeem for rewards, discounts, or exclusive products can brighten the feeling of loyalty and commitment.
5. Exclusive access
Some referral programs offer tiered rewards. As more people are referred, the bigger your customer’s rewards. This includes escalating discounts, special privileges, or exclusive access to products or services.
6. Free products & services
Providing free products or services as a referral incentive is a better way to introduce customers to something exciting. It's the best way to capture their interest and turn them into long-term customers.
7. Personalized rewards
Personalized rewards specifically designed for your brand and target audience can make your referral program truly incredible. Instead of following the same old routine, think outside the box and offer customized products, exclusive features on your website, or unforgettable experiences.
Step 4: Decide Who Gets Rewarded
You can:
Reward only the Referrers
Reward the Referred Friends
Reward Both Parties
Decide when to give the reward
Immediate Rewards: This means giving rewards to participants immediately upon a successful referral.
Action-based Rewards: Tying rewards to particular actions by the referred friend, such as making a purchase or completing a trial period.
Step 5: Determine The Reward Value Based On Your Budget and Goals
Budget Considerations:
It's important to consider your budget when determining the value of rewards. Ensure the cost of rewards is sustainable and matches your marketing budget.
Program Goals:
The value of rewards should be luring enough to motivate participation and help you achieve your desired outcomes, whether bringing in new customers, increasing sales, or swelling engagement.
Step 6: Choose The Reward Type To Offer
There are different types of rewards you can offer like:
Discounts on Purchases
Free Products or Services
Cash Incentives, etc.
Step 7: Track & Adapt
Monitor and measure your referral program's performance. There are three referral program metrics to keep track of—share rate, clicks per share, and conversion rate.
Share Rate
Aim for a share rate between 5% to 9%. This tells you the percentage of customers who actively share your referral program.
Clicks Per Share
Target a clicks-per-share ratio of 1.8 to 2.8. This reflects the average number of clicks generated per share.
Conversion Rate
The conversion rate should be 2 to 3 times higher than your typical conversion rate for other marketing channels.
Step 8: Make Strategic Adjustments For Optimal Results
1. Increase Advocate Reward Value: If your share rate or conversion rate is lower than expected, consider increasing the value of rewards for advocates.
2. Change Advocate Reward Type: Experiment with different types of rewards, such as cash incentives, discounts, exclusive offers, or tangible gifts.
3. Revisit Referral Rewards: Regularly review and update your referral rewards to keep them relevant and appealing to your audience.
Use Gamification to Boost Your Referral Program
Gamified Referral Rewards involve integrating game mechanics into jest contexts, like referral programs, to increase engagement. This can encourage more people to actively participate and refer others, boosting your program's effectiveness.
How to use gamification to boost your referral program?
Want to add some gamified referral reward programs? There are enormous possibilities, but here are a few effective ways to engage your customers:
A points system where customers earn points for each successful referral. Once they accumulate a certain number of points, they can redeem them for exciting gifts or rewards.
A referral progress bar showing how many referrals a customer has made and their progress toward earning the next incentive.
Different tiers of badges, where as customers refer more people, they can reach higher-level badges.
A referral leaderboard for customers to get excited and motivated to refer more people.
Referral contests to ignite competition among customers and inspire them to bring in more referrals in hopes of winning some amazing prizes.
Limited-time offers to add excitement and gamify your referral experience by creating urgency and motivating quick sharing.
Create a Gamified Referral Program with Flyy
Referral programs incorporating gamification can be a fun and engaging way to involve your customers. Adding game-like elements, customers will feel like they are playing a game while participating in your referral program.
If you are looking for ways to enhance your popular referral program and boost customer engagement, give Flyy a try today! You can choose what works for you based on your goal and enhance your referral program with us.
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