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Main Benefits
Referral programs are a great way to acquire new customers, increase brand awareness and retain existing customers as you offer them rewards for referring other customers. One-sided referral programs are less complex when it comes to implementation and can be cheaper than two-sided referral program.
Word-of-the-mouth is one of the best advertising means. Nielsen's report proves that the recommendation is the most trusted for customers sitting on the fence. According to the statistics, as many as 92% of customers trust their friends’ advice, 77% of customers are willing to buy a product or use services recommended by someone they know.
Program rules
Best Practices
- This type of referral program may be less effective than a double-sided referral program for new customer acquisition as you do not offer anything to the invited friends.
- Set up the conditions for getting rewards wisely, decide what is considered a successful referral for your business.
- Percentage and amount discounts work well as referral rewards, so do gift cards and free subscription months in the case of SaaS products. Other ideas for referral rewards consist of free products, free shipping, free product upgrade, additional services, loyalty points, store credit (a kind of pre-paid gift card or credit card), charity donations, or giveaway entries.
- You can offer referral tiers for different numbers of referrals, for example, the first referral gets rewarded by 10% off, the second referral 20% off, and the third referral 30% off.
- You can differentiate various stages of a successful referral by setting different rules for the referral to be considered successful. For example, in the case of HR rewards for referring potential employees, you could offer a $100 reward for a successful hire, a $1000 reward if the employee stayed with the company during the probation period, and $3000 if the employee stayed with the company for a year.
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