Airbnb invested in the word-of-mouth marketing and aced their referral program. What about your company?
Do you pay enough attention to the power of Social Proof and innate human altruism? If not, let us tell you more about Airbnb referral program and how you can recreate it with Voucherify.
Airbnb referral program reverse-engineered
If somebody told you that travelling and living in a stranger's house is fun, would you believe him? Perhaps you wouldn’t, but Airbnb in 2008, being a small Californian start-up, did and created a platform to do just that. The premise was original but also risky as people never heard about such thing before and some were scared that it was just a smokescreen for human trafficking or God knows what else. That’s why Airbnb grew to rely heavily on positive reviews and word-of-mouth to promote its services. No wonder that soon enough the first Airbnb referral program was born.
The evolution of Airbnb’s Referral Program
When the first version of Airbnb’s program launched in 2011 it was a blessing in disguise. The program was deemed semi-successful and quickly forgotten as yet another example of a failed referral campaign - that is until the numbers came in. The data indicated that the referral program brought in many new users which translated into millions of dollars of revenue. It turned out that the biggest problem of the program was the fact that it wasn’t promoted enough - most users and even some Airbnb’s employees weren’t aware of it.
The solution was to create the second version of the referral program and this time to promote it effectively to set up the best example on how to build brand awareness and drive huge increases in sales. And so Airbnb’s Referral Program 2.0 was born.
Airbnb at the forefront of referral programs
There are several breakthrough points that made Airbnb’s referral program world-renowned:
- Facilitation of the sharing process by providing a shareable link and a possibility to import contacts from Gmail (and other platforms) to send personalised email invitations to friends. Here it’s worth mentioning that Airbnb run a risk of being accused of invading people’s privacy, but luckily the power of convenience won and the platform got away with it.
- Emphasis on the word “gift” and taking advantage of people’s innate altruism - Airbnb has A/B tested two variants of emails: one that emphasised receiving $25 for referring a friend and one that emphasised giving $25 to a friend. Guess, what? Faith in humanity restored - the second email, the one that encouraged altruism, got higher response rates.
- Staying on the right side of the law by providing proper unsubscribe link and staying out of SMS marketing as it tends to be tricky.
- Noticing the underlying potential in the Word-of-Mouth marketing.
- Advanced tracking methodology in place and A/B testing all possibilities.
- Releasing the app on mobile to catch users on the go and tapping into the potential of mobile advertising.
- Building trust with personalised emails by placing a picture of the referrer in the message.
- Flexibility with payments - the total depends on the local currency and it is calculated via the base exchange rate.
- Differentiation between rewards for guests and hosts (with the first receiving Travel Credits for future Airbnb bookings and the latter being rewarded with cash) which translated into bigger participation in the program as hosts by and large were not interested in receiving Travel Credits.
All of these elements allowed Airbnb to build a referral campaign that resulted in three times more bookings and sign ups than ever before.
How does Airbnb referral program work?
The premises of the referral program are easy to follow - friends who register with your link get Travel Credits which they can spend on their travels, you get Travel Credits after your friends complete a first-time stay or experience (a.k.a Qualifying Reservation). The number of Travel Credits varies between offers.
Of course, there are some limitations in place to prevent fraud and abuse of the program’s rules:
- Limit on the maximum number of Total Credits.
- A referred friend has to finish the stay (check-out) in order for the stay to be counted as successful; also the referrer cannot be the host.
- It is impossible to accrue Travel Credits on different accounts.
- Travel Credits have no cash value and cannot be exchanged for money as they serve only for promotional purposes.
- It is forbidden to share referral links on commercial websites.
- Expiration date of a promo code (1 year).
- A referred friend may only use one referral link once.
- Airbnb has the right to suspend the user's account without prior notice and explanation if his/her activity seems fraudulent.
Now that we know the main premises of the program, let’s try to recreate the Airbnb referral workflow in Voucherify:
The limitations to this workflow will include:
Voucherify as an API-first platform offers its users tools to customise their campaigns and integrate freely with other APIs. There exists a possibility to run a campaign with no integration in place but keep in mind that if you do so, your campaign rules will be limited to default settings of the platform. That’s why a better option is to integrate your platform with Voucherify to launch a campaign specific to your particular needs and brand style. You can read more about technical details here.
Before we create a campaign, let’s set up custom events that are going to act as triggers for the Travel Credits to be issued. Here you can read more about custom events and how to create them.
In our case we need just one custom event - referred friend checking-out thus finishing Qualifying Reservation.
Remember that you may name your event differently. The key thing is to enable tracking of this event on your website/app so that Voucherify knows when to issue a reward.
Now, let’s jump to the Referral Campaign Builder:
Name your campaign and set how many codes you’d like to generate.
The next step is setting optional time limits, such as the start and end date of your campaign or making the codes valid only on particular days of the week. As we established before we’d like to make our codes valid only for a year.
Now let’s establish the workflow of the referral campaign.
Check_out is going to act as a trigger for the referrer's reward. Select double-sided referral program because we want to reward both parties.
In the next step, we need to establish the reward for the referee which is going to be automatically triggered after code redemption which in the case of your website/app will be synonymous with registering via code. This referral code can actually be a coupon or a gift card managed by Voucherify engine and it can point to the landing page with discount coupons or gift cards.
Voucherify offers you two possibilities: to treat Travel Credits like gift card credits or loyalty card credits. In both cases these credits will be redeemable for future bookings. If it suits you, you may also treat them as 20$ discounts.
We are going to choose gift card credits and here Voucherify will ask you to define which card you have on your mind. If you haven’t created any gift card campaigns yet, don’t worry, here you can also use predefined gift cards campaign available in the system by default.
Here we should also establish some validation rules to put some limits on code redemption, in our case, one redemption per customer. Keep in mind that Voucherify rules builder is a powerful tool for personalising your campaign. You can learn more about it here.
Now what about the referrer? In the next step, we’ll be able to establish with what rewards and under what conditions should he/she be rewarded.
Name your criterion and select that every time a referee performs check_out event the referrer will be rewarded. Here you may also establish other triggers for issuing a reward, such as the number of referees who performed given action. This action can be specified even more via validation rules engine available after choosing “Show Advanced”.
Next, go to the Rewards.
Here, select the same options as in the case of the referee rewards.
In the next step you have an option to establish HTTP callouts which are going to inform your customers about the reward. This process may also take place via automatic email or push notifications.
Next, you may add optional metadata to improve tracking of the campaign. Here you can learn more about metadata.
In the last step, you’ll see a summary of your campaign.
If you are satisfied with your results, hit SAVE.
Afterwards you will see a new detailed view of your campaign where you can easily track its performance and edit it, if need be. You may also use Voucherify for referral codes distribution via automatic or manual messages which may take the form of emails, SMS messages, push notification, webhooks and many others. Take a look at this article to learn more about distribution in Voucherify.
As you’ve just seen it is so easy to recreate Airbnb referral program with the use of Voucherify flexible rules engine and customisable promotion schemes.
If it’s cheap, easy and brings results, why are you not doing it?