Update: As of June 2020, due to growing financial difficulties caused by COVID-19, Uber Ride has discontinued its referral program. It’s is sad to see the program go as Uber was built on its refer-a-friend campaign and much of its growth can be attributed to this very program. However, despite its recent closure, I still believe that it is worthwhile to analyze what made the Uber program a roaring success.
One of the most effective customer acquisition channels in sharing economy relies on heavy software machinery. If you’re wondering what it takes to implement a similar referral engine and how specific cogs impact the bottom line, we have you covered. Read this article for an in-depth look into Uber referral program mechanics and then see how you can get similar results with Voucherify referral API at a fraction of the cost and time.
Keep in mind that implementing a happy path of the Uber referral program is one thing, but preparing the system for scale and requests from marketing and customer success teams is a helluva different story.
Just in case, let me introduce Uber – they have developed the Uber mobile app, which allows customers to request a trip, which is later routed to one of the Uber drivers. What’s special about it? Well, first of all, it’s a lot more convenient and cheaper than a traditional cab. Secondly, the Uber marketing team is pretty much on fire – offering attractive promotions to attract new customers. One of those being their world-renowned refer-a-friend campaign.
A part of Uber’s referral program that moves the needle is dual-sided rewards. When you look deeper, you’ll see that their program contains a wealth of referral campaigns with various rewards targeted at different countries or even cities. At one point, the program offered a $20 reward for new riders. Add A/B tests on top of that and you’ll end up with hundreds of projects spanning across the globe, managed by dozens of teams.
For the sake of this teardown analysis, let’s assume that the Uber referral program rewarded both the referrer and the invited friend with an extra $20 attached to their Uber accounts. To make matters more complicated, Uber also offers a driver referral program. Drivers could expect a referral reward valued at anywhere from $100 to $1,100. Although it’s similar to the rider program, it has different mechanics under the hood. So let’s focus on the rider program.
Geo-targeting, internationalization, and user access management aren’t, of course, the hard-to-implement concerns for the software teams that want to build a similar system on their own. In the sections below, we’ll dive into three essential parts of the referral mechanics – reward engine, sharing and notification capabilities, and program maintenance. Along the lines, we’ll suggest how you can solve those issues with Voucherify.
The incentives that propelled Uber’s referral program to its heights sound very straightforward. However, if you’ve been paying attention, you must have noticed that they are evolving all the time. Let’s see what referral program features allow Uber to achieve their results.
Depending on the program, the reward might be credits added to an Uber account or cash payout. Also, the value of the prize varies from country to country or even city to city. Interestingly, the reward often changes its value depending on the marketing campaign performance.
How does this work having in mind these requirements? I believe Uber PMs determined it’s reasonable to enable the marketing team to choose rewards on a campaign basis. This approach would prevent frequent code changes in places that interact with the various rewards (e.g., referral code redemption points or referrals history view).
Voucherify referral programs work exactly this way. You integrate the redemption API endpoint once so that it will validate and accept all future referrals. When it comes to rewards, Voucherify offers three types:
Do you want to increase or decrease the reward value? No problem, the API and a marketer-friendly dashboard enable your marketing team to do so at any time. An extra word on how Voucherify treats discount coupons. They can be single-use or multiple uses. Why is that important? Well, in some cities, Uber has recently changed their rewards from $10 credit to $5 off for the first two rides. This kind of coupon would do the work here.
To cover the cash payout option, you can use the amount coupon object combined with webhooks – our promotion engine notifies your payment processor the moment the reward (coupon) is assigned to a person. Then, you can extract the value of the coupon from the request payload and turn it into cash.
Speaking of the rewarding workflow, sometimes the redemption of a referral code isn’t enough to reward the customers. First, you might want to raise the stakes, e.g., refer 5 friends to get $5. Or even introduce referral tiers – refer 5 friends to get $5 and make it 10 to get $20.
Watching customer acquisition strategies for a while now, I’ve learned that ever-changing consumer habits can plow even a well-designed referral system. This is why the code responsible for determining conversion should be open to modification.
To achieve such an extent of flexibility, we have created a conversion event builder. It’s based on top of our multi-level reward engine and real-time events tracker.
In brief, there are two things that can activate a reward in Voucherify:
You can use both of them for defining successful referral criteria. With this combination, you can quickly spin programs like:
It’s often the case that a successfully redeemed referral code shouldn’t trigger a reward for every customer. There are several limits you want to impose on your audience to protect your budget. One of the basic limits is that you can’t refer the same person twice. But there are more:
These are all real-life requirements from Uber’s referral program terms. Verifying these kinds of attributes against your promotion rules requires a pretty tight connection to a CRM, so make sure you sync the data.
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Voucherify offers a dedicated CDP that allows syncing with any CRM through the API (with some native integrations like Segment or Salesforce)With this in place, allows you to create validation rules on top of customer data like:
You can apply these rules both to the referrer (advocate) and referee (invited friend). The best thing about it is that the segments work real-time – change the flag/attribute with the API or dashboard and the customer pops in and out of the segment.
One of the essential factors of Uber’s referral program success is great experience throughout the whole customer journey. Starting from a simple invitation form, through piece-of-cake-like sharing, to the ability to track the referrer’s progress. To achieve this, Uber connected their referral engine to numerous marketing channels.
The pillar of any refer-a-friend program (not only Uber) are unique referral codes. This is how you can track if the word of mouth works at the end of the day. As simple it sounds, there are several caveats you should take into account when planning how to ensure true uniqueness. To name a few:
Learn more: How to ensure a fantastic coupon validation experience
At its core, Voucherify relies on a unique codes generator. It has numerous features that allow you to create referral codes of virtually any size and format. You can define:
When you’re ready to deliver the codes to advocates, the engine takes care of publishing one and only one code to a single person. The code is marked as published and won’t be used ever again in the scope of this campaign (you can launch many referral programs and assign a single referrer a code from each of them).
If you want to let your referrers create their own names as codes, as Uber did in the early days, Voucherify paves the way here. You can create custom codes like “Ride-with-Tom” to drive engagement and improve the success rate of your Uber-style referral campaign.
The problem, in this case, lies in the maintenance overhead – it’s way easier for a duplicate. With Voucherify, you can create an empty campaign and use our API to populate it with custom names. The referral engine will apply all the standard unique rules and help you inform the user about possible duplicates when claiming their code.
Referral code uniqueness is transparent to the user, it’s something implicit. So, let’s focus on what’s visible to customers. One thing that made the program so popular is the easiness of, first, joining and, second, driving the program.
This part is often neglected by companies who want to run their first friend referral program. As a result, the success rate of the program with even a generous incentive is decimated.
So let’s see how Uber makes enrolment easy:
Both in the web and mobile application, users are just a click away from a referral code/link which can get them free rides. Whatever channel they use, referrers don’t need to do anything to join the program, they’re all set up to share and win.
The API-based approach allows you to integrate referral codes into any channel. If it’s bespoke software you have control over, you get the ultimate flexibility – you can use one of our SDKs to publish the referral code and then retrieve it every time you want to display it to the user. This includes web apps, in-app banners, email content, push notifications, live chat, POS, and any future channel. This makes entry easy and allows for creating a unified referral experience throughout the whole user journey.
Additionally, Voucherify can send email/SMS/push notifications to periodically remind referrers that they should put their code into motion to win rewards (more about this in the “Performance tracking” section below).
Note that before you can enrol your customers into a referral program, you should import them to Voucherify. Our platform offers several options here:
Validating and redeeming referral codes is also seamless from a new Uber user’s point of view. They follow the link and the code is auto-applied to the sign-up form. Or, alternatively, you just need to paste it into the app.
Again, what seems straightforward on the surface also requires attention to detail. To achieve a top-notch customer experience, the Uber referral program covers several use cases:
[BONUS] Uber offered a retroactive referral – if you signed up and forgot to enter the code, you can contact Uber and get a code added as long as you’re within 15 days of activation.
Voucherify API redemption endpoints can be quickly connected to your redemption points. Be it a website or mobile app, our SDKs will reduce the time of implementation to hours. But there’s more. Our building blocks consist of web and mobile widgets, which you can brand and quickly inject into a redemption page. They use separate public API keys, so rest assured they won’t be used for malicious activity – plus, the rate limiter takes care of potential brute force attacks. As for the retroactive referrals, your customer support agents can quick-click them with the dashboard.
The final stage of the referral program, from the referrer’s point of view, is to see how much they’ve earned so far and when they can redeem their reward. Uber got this extremely right for their driver referral program. Not only does the referrer dashboard show the list of all invited friends, but it specifies what stage they are in and what they need to complete to make the referrer eligible for a reward. With this knowledge, referrers know when to nudge their friends and when to expect the money.
Throughout the referral workflow, Uber notifies referrers about their friends’ status with relevant emails and push notifications.
The good thing is that you can achieve a similar effect with Voucherify API:
When it comes to having different reward values for customers from different segments (in Uber’s case it’s a different city), Voucherify got you covered too. You can use tiers to model this case. It’s worth pointing out that tiers are based not only on the number of referred customers but on any validation rule you can come up with, this includes location, purchase history, or any other custom field.
As for notifications, you will find the built-in distribution mechanisms helpful. The engine listens to the changes in customer segments and if criteria are matched, it sends a contextual message. You can choose one of several channels to send a referral notification. So, you can easily create the following refer-a-friend scenarios:
Learn more: Go here to see all integrations
Implementing an initial design of your referral campaign is one thing, ensuring that it adheres to the market reality is another one. Very often, it’s the program maintenance that takes the most effort. This includes:
Ultimately, there are a plethora of things needed to cope with market dynamics impacted by competitors, regulations, or simply calendar.
In the case of the Uber refer-a-friend program, the number of modifications in the course of the year is so huge that there are dedicated websites to track them. With this scale, I bet they had to incur a lot of development resources to build a machine that handles their programs.
There are a few components that reduce the workload necessary to manage running referral programs. We offer a marketer-friendly dashboard that allows you to:
Uber has disrupted many areas of commuting. They have done so in online marketing as well. Having in mind ever-changing customer habits and new marketing channels popping once in a while, they’ve bet on a referral program built from scratch – as opposed to integrating one of the various cookie-cutter referral software available on the market. I’m sure it did cost a lot, but it’s brought them unparalleled flexibility in exchange.
If your business is looking for a similar level of configurability, but you don’t feel like spending months of development work on building a referral platform from the ground up, you might want to give Voucherify a try. It’s not a no-code solution, you still need developers – but with our programmable building blocks, you get to build a tailor-made referral campaign in days.
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