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Have you built a great referral system?
I keep hearing a common fallacy of 'if I give users $5 to refer a friend' = viral growth. We're looking to add an invite a friend feature to our learning app and I'm looking for best resources and feedback on it.
Here's how we're thinking about it:
- Set goals for what would be a successful referral program (measuring viral coefficient, CAC & absolute numbers to see if this will be meaningful for us)
- Focusing on a cohort of our power users
- Diagnosed the customer needs that a referral program could address & the JTBD, for example: Money ("Gain seeking" or "Generosity" are two emotions that correlate), Utility ("Learn with a friend" or "compete vs someone").
- Building specific flows/features that will address different needs to test which resonate the most.
What do you think? What have you seen work? What does a successful referral program look like - do you measure CPI? CAC?
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Alexander Moen
The only continuously successful referral program I've ever implemented or directly experienced that just obviously worked (or that I've even heard about within my network of people that I know) has all been related to talking to the customer directly. This was usually most successful when done by a salesperson right after a sale when they're most stoked and the rapport is there. Then, just ask for an introduction and don't be afraid to jog their memory. We even used to have internal contests about that, so the salesperson could say it would really help them win a contest. Then, the customer is "helping the salesperson out" too and there's that extra emotional pull to have them refer someone to help out their new buddy.
Depending on cold calling/Do Not Call laws in your area and how much you care about those, you might need the customer to literally make a phone call on the spot to their referral and have them hand the phone over to the salesperson to have it to work. It might sound nerve-racking, but it worked well. Cc'ing over email has worked too, but quite a lot less, and usually the person ends up calling the referral to get permission before cc'ing you anyways.
Sure, I've read about all the viral referral contests and ideas that people have done, but I've never seen that work out as consistently or as profitably outside of the business fables they get told in.
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@alexander_moen Thanks Alexander! This is great, and in general I agree for B2B, not sure about B2C - we try and speak to everyone we can, especially subscribers, but probably end up communicating with 1/10 (in a good week)
@yehoshua_zlotogorski I've used this as the sole way to generate B2C leads and sales in the past. It can definitely work.
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We've build referral program for our waitlist at Flowrite. It offers one-sided reward of getting access to our private beta earlier in addition to some company swag as a reward, which is tiered based on the # people that signup through your link. It has brought in approximately 30% of our +25,000 waitlist. Here's a blog post about the implementation: https://www.flowrite.com/blog/re....
Currently experimenting with in-app referral program, but it's still early days.
@samulipehkonen Thanks for sharing! Will read it :-) We're testing in-app which we've found to be more complex
This is one of the worst things for a business, especially for a beginner. Sure, you can attract a few people at first to have more clients, but most of them will only come for $5 or $10 and won't stay. In my opinion, it's better to focus on tools like jobs to be done that help you understand your customers and create a map where you can find channels that help you gain more credibility as a company and make sure they become repeat customers and not just one-time customers.
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