Turn your app users into advocates

A referral is when somebody recommends something to someone else, and a referral program is a deliberate, sustained system of soliciting and encouraging referrals. This system typically involves some sort of incentive structure.

A referral program adds to the virality of your app and gets your potential customers to trust your app as it has been referred by a friend or a colleague. It’s one of the most effective tactics for app growth. After all and according to Nielsen Global Trust Advertising survey (2015), the most credible advertising comes from the people we know and trust.

83% of consumers trust recommendations from friends and family, and 66% trust consumer opinions online

Even unsuccessful referrals have significant marketing value because they introduce a brand or a product into public consciousness.

Evaluate if an app referral program is right for you

Most marketers start a referral program as soon as the app is launched. In general, it’s better to establish first a user base that is big enough to make a strong impact (around 200 customers is a good place to start).

But, before doing anything else find out if a referral program is a good marketing channel for your app and if your business is ready to implement it. Try to answer the following questions:

  • Do you have a product that’s worth referring? Also, consider if your product category is one that consumers will be proud and unembarrassed to share with friends and family. Referrals don’t work for every product. If you are selling something embarrassing try other channels.
  • Do you have an online presence that allows you to interact with your users?
  • Do you have the ability to capture transactional data? Data like how much your customers spend with you, how frequently, or how long they remain customers can help you understand customers’ loyalty and their LTV to your business.
  • Do you know what your customers think about your products? What are they saying about your brand online?
  • Do you have the resources needed to scale your business? What happens if you launch your referral program and new orders come flooding in?
  • Is the average transaction size large enough or frequent enough to warrant paying rewards or should you reward referrals in some other way (loyalty points, micro-rewards, product upgrades)?
  • Ask for your NPS Score from your current customers. Are you a 9/10?
  • Ask your customers to share without an incentive. Is share rate above 3%?

If you want to test out if a referral program is a good channel for you, Dominic Coryell have written a detailed step-by-step process for you to follow: How to Hack Together a Referral Program In Less Than 1 Hour.

Define the crucial components of your app referral program

Once you have decided that a referral program may work for your app, these are some of the things you need to start thinking about:

The core value of your product

Basically, you need to define the “lifeblood” of your product. For example, for Dropbox is storage, for Paypal is money, and for Word of Warcraft is in-game social proof. This will allow you to create incentives that are relevant to your product.

Define your goals and metrics

Before starting the referral program define what success would look like. Choose a few metrics to keep score. If you don’t have any previous data, you can benchmark yourself against other successful referral programs.

Possible goals: brand awareness, boosting app installs, getting more customers to purchase on mobile, increase customer loyalty, increase the overall number of customers at a lower CAC.

In order to evaluate the success of your referral program, you need to be able to track performance and metrics from month-to-month. Analytics tools like Google Analytics can help you with that.

Know your app users

If you want a successful referral program, you need to understand who is giving the referral, why they are referring new customers, when they are making the referral, and how many people is the advocate referring.

It can be helpful to create a buyer personal of a user that refers your app. See below the resources to create a buyer persona.

Among other things, a customer persona will help you understand the motivations behind spreading the word about your product, a motivation that goes beyond getting free stuff. Once you find out what is already getting people to share you can give them more of what they want.

It’s important that you identify your most loyal and active customers. This is the group you want to reach first when you launch your referral program.

Resources to create a buyer persona
The Complete, Actionable Guide to Marketing Personas
New MailChimp: User Persona Research
A Closer Look At Personas: What They Are And How They Work | 1
A Closer Look At Personas: A Guide To Developing The Right Ones (Part 2)
Complete Guide to Creating a Customer Persona for Your App
Buyer Persona Institute
The 3 Biggest Mistakes Marketers Make With Buyer Personas

The incentive

Choose an incentive and decide if you want a one-way or a two-ways referral program. Referral incentives will impact your sharing rate and your referral conversion rate.

Some tips for choosing your incentive if you have an app that sells products. If your customers are likely to make repeat purchases, give discounts. These discounts can be fixed discounts ($25) or percentage discounts (10% off).

Use the Rule of 100 to decide which one is better. If your product costs more than $100, cash discounts sound better. If your product costs less than $100, a % sounds more impressive.

If your customers are unlikely to make repeat purchases due to the nature of the product, give cash.

If you don’t know exactly where to start, reach out to a handful of your most loyal customers and present them some options, and see what resonates more. Keep in mind that incentives are not limited to cash or gift cards. You can offer product-based discounts, upgrades, free shipping, access to exclusive content. When it comes to rewards, the best are those the money can´t buy (special products, access to private events, VIP treatment, content not found anywhere else).

Know your average LTV and CAC to determine what you can afford to pay out in customers incentives. You will have to define a reward structure and decide how much to give and when. Are you going to have different incentives based on the number of referrals? Are you going to give a reward for every referral or make the reward available after a set amount of referrals? If the reward is cash or credit, what is the amount you are planning to give?

Consider which event is going to trigger the reward (to click a link, schedule an appointment, get a quote, make a purchase). In order to have the most impact, you need to understand the window of time when people are most likely to share. This will allow you to put the right offer in front of the right people at the exact right time.

Laid out of your terms and conditions and think about the measures you are going to take to prevent fraud.

CTA (Call to Action)

The CTA must be very clear with an eye-catching design and an impactful copy. If you want users to click, the words you choose are especially important (“Invite and Earn”, “Free Ride”, “Share and Earn”).

Keep the CTA in a place the user will visit. Your app referral program should be easy to locate by your users. The most obvious location is the app’s menu. You can highlight the CTA tab using a particular color, icon or both.

Before going live, ensure the referral program can be discovered in these locations:

  • Top navigation bar
  • Sitemap
  • Checkout process (ideally, right after the purchase)
  • Emailed receipts and/or invoices
  • Email footer

If you have an online store, place the referral CTA on the post-purchase pages because right after making a purchase the customer is happy and they’ll be more inclined to recommend your products to their friends.

Another good place to ask for a referral is after the user has written a good review on your site.

Personalized referral links and personalized referral codes

For the users, it’s important to have the option of personalizing the links because it helps them to connect with their audience instantly.

Instead of a random alphanumeric combination, users should be able to share a code that is easy to remember and be able to customize it.

In-app share page

Create a share page in the app to let the user know that you have a referral program. Display the offer structure and include share buttons for every channel you want to use (email, Facebook, Twitter).

Spend some time developing a good in-app share page. In this page, the user should be able to see their earnings, details of friends who have signed up using their referral links, and social media icons to share the referral link.

Others

Integrated social media icons to make it easy to share.

A walk-through to assist the user. Consider making your referral program interactive with animation and automatic next steps through the referral process. Use attention-grabbing images or even videos.

What successful referral programs have in common

1) They know their app users and understand their needs and wants.

2) They are simple and easy to use. The process is very clear and easy to comprehend by both the referrer and the recipient. It’s important that the users understand how your referral program works and what their reward is. Don’t leave room for misinterpretation.

3) It must be also easy to find, so don’t hide the link on some page where the user will have a hard time finding it.

4) They are easy to share on multiple social channels with a referral link that is easily customizable and easy to track. Users need to be able to track their referrals and rewards.

5) The app referral program is proactively promoted. It’s promoted inside the app to all the user base, promoted to new users, promoted outside the app, promoted to users already using the referral program to keep them hooked with a good reward strategy.

6) Takes advantage of all communication channels availablepush notifications, email marketing campaigns, in-app prompts, social media profiles, website, newsletters, banner ads, referral surveys.

7) Analyzes the campaign results consistently. Analyzes all the critical data points (number of clicks, number of installs generated by the program, sales, number of influencers engaged, the status of incentive offered, fraud detection).

8) They keep users motivated and follow them up by creating content that users can share easily along with their referral link and whenever possible ensuring users keep a positive wallet balance so it’s less likely that they uninstall the app. Some users need a bit of convincing to take action on a referral program. Follow up with them and remind them of the offer. Some ways to do this without being annoying:

  • Send an email reinforcing the incentives offered.
  • Send a push notification every time a friend accepts the invite and joins the app.
  • Send an email or a push notification regarding when the campaign is ending and inviting them again to become part of it.
  • Implement live chats and form a community.
  • Incorporate activity feeds to liven up your community.

9) Successful referral programs usually are a two-way referral program (bilateral rewarding). The program rewards both the referrer and the recipient.

10) Personalization is an integral part of the referral program. They try to maximize the friend-to-friend feel of referral by personalizing email campaigns, landing pages, referral codes, and links.

Just to see how important personalization is, Airbnb increased its users’ signups and booking by over 300% per day by personalizing the links. Companies like Shyp, Instacart, Munchery, and Uber have also seen great success with the personalization of the referral experience.

Also, if you want to mimic the way people share, let the customer write a personal message instead of just using a pre-determined message written for them.

Another way to personalize the experience is by utilizing the face of the referrer and the recipient everywhere possible. Seeing the face of someone you trust is a powerful and visual reminder that a friend has reached out to you with a product suggestion.

Send referrals from the referrer’s email address. When a user shares a referral by email, that email should come from their personal address.

11) Most of the successful referral programs benefit from network effects.

Designing your mobile app for referral

Part 1 – Decide how advocates will share

The first decision you need to make is deciding how advocates will share. You have two options:

1) Native sharing. You can rely on the native sharing options in iOS or Android. Basically, it’s the same mechanism you would use to share a link with a friend through SMS or email a photo to a friend.

Advantages

  • People are familiar with native sharing. They know how to share an image or a link through the mobile operating system.
  • Relying on native sharing can save you tons of development time and money, and it’s super easy to integrate sharing for social channels like Facebook and Twitter.
  • The sharing functionality of your app is regularly updated with the OS.

Main drawback

  • A lot of mobile sharing end up being a dark void into which a lot of valuable data and analytics disappear. It’s hard to track who they are sharing with over SMS and email.

2) In-app sharing with custom APIs. The alternative is to build in your app, on top of the native OS sharing. You integrate a custom sharing API and pre-select the channels where customers can share (Facebook, Facebook Messanger, Twitter, WeChat, Whatsapp to name a few).

Advantages

  • With a built in-app sharing system, you can develop a more personalized sharing experience. You can develop a pre-filled referral message, show advocates what they are sharing, and create a unique sharing experience.
  • You have more data. Using native sharing any analytics data you have is lost. When you build your own sharing mechanism, you can track how many invites and shares referrers are sending and how well these referrals are performing.
  • You can analyze the copy of the message and how customers are talking about your brand in their share messages.

Part 2 – Decide where friends are going to land

Where do users land when they tap on a naked, regular link in a referral message on their phone? There are two possible scenarios:

1) If the user has the app installed, they will be taken to the app. They will land on the normal welcome screen on the app, not a referral landing page so they will not know who referred them, or how to redeem their referral credit.

2) If the app is not installed, they will be taken to the app store where they can download and install the app. This scenario is great for getting installs. The problem is that the app store does not tell the app that this user was referred. Friends can’t redeem the offer, and you can’t reward the advocates.

You will have to work around the app stores designing the friend landing experience to tackle these issues and to do this you have two options:

  • Deep link to the landing page
  • Create an account on landing sign-up page

Deep link to the landing page. You can use services like Yozio or Branch to take the user to a specific referral landing page after the install.

Advantages

  • Higher app installs
  • Deep linking allows you to get more granular with your analytics data
  • Richer context. Things are more relevant to users for where they came from and where they are going to. The friend is greeted with a personalized experience, not a generic welcome page.

Drawbacks

  • Deep linking technology is not 100% accurate and does not always work seamlessly across social.
  • Instagram does not allow users to post links.
  • Most deep-linking services forget fingerprints after several hours. So if a friend downloads the app, but does not open it immediately, the referral connection will be lost.

Create an account on landing sign-up page. Sometimes it may not be a good idea to drive users to install the app because it’s not the right moment. You can direct friends to sign-up for an account on your mobile web page. Once they have created an account, the referral code is automatically applied to their account.

Even if the friend does not make a purchase or installs the app, you get their email address and the possibility to contact them anytime.

Advantages

  • You know with a 100% certainty who the customer is. Once they have created the account, you can match that profile to your CRM.
  • You don’t force users to install the app.
  • Having the friend’s basic contact information allows you to nurture them further.

Promoting your app referral program actively

Don’t assume that users know about your app referral program because it is possible that if you have not promoted it, they don’t even know you have one. It’s important that you actively promote your referral program from the beginning.

Some ideas to start promoting your app referral program online.

Leverage email marketing

The best way to introduce your app referral program to a user is through a personalized email. Establish contact with the user within 48 hours after installing your app. It can be through a personalized email or an in-app message welcoming them. Try to personalize as much email fields as possible.

Introduce the app referral program to a user when the time is right (this may vary from one app to another). Use engaging content, images, and a CTA button to introduce your app referral program.

Once an app user has referred others, send them an email saying “Thank You” for joining the program and including details of the incentives and customer support details.

Other things you should do to leverage email marketing are:

  • Add your app referral program to the email signature
  • Send a welcome email to update new users and let them know about your program
  • Send a newsletter to existing users to let them know about your referral program
  • Schedule emails that the recipient will receive based on predefined parameters. Some types of emails you can send:
    • Nurture emails. When a friend hasn’t used a referral reward send an email to remind them to either sign up for your product or ask them to make a purchase.
    • Referral stats emails. Send emails to the referrers to give them insights into their referral dashboard.
    • Friend email capture. Send an email to ask referred friends to provide an email to receive a coupon or a discount code.

Leverage social media channels

  • Integrate landing pages with social icons and pre-programmed messages.
  • Pinned post of your referral program on social accounts such as Twitter, Facebook or LinkedIn.
  • Promote the program with social ads.
  • Introduce a pre-launch contest on social media.
  • Include your referral program on your social media bios.

Other promotion tactics

  • Use push notifications to promote your in-app referral program to all your app users.
  • Use in-app messages asking users to invite their friends and earn rewards.
  • Send SMS to app users.
  • Promote your app referral program on your website and mobile site.
  • Create a dedicated landing page to promote the program and explain the terms and conditions and also the benefits of joining the program.
  • If you have a strong loyalty program, connect it with your referral program. Make referral rewards part of the loyalty program’s existing point system and make sure that members know about the referral program.

Resources

Referral marketing general

Referral Marketing Guide – ReferralCandy
How Value is Word Of Mouth – Harvard Business Review
[Slides] How to Do Referral Marketing
Referral Marketing: The Ultimate Guide

Design mobile referral program

[Infographic]- 23 Essentials Of An In-App Referral Program
How to Design your Mobile App for Referral – Part 1
How to Design your Mobile App for Referral – Part 2
6 Ways You Can Create a Referral Program that Works
The Epic Beginner’s Guide to Building a Successful Referral Marketing Program
How Positive In-App Wallet Balance Can Reduce Uninstall Rate By 60%
What You Need To Know Before You Start A Referral Marketing Program – Who Sends The Referrals?
The Customer Advocacy Playbook – Webprofits
The Definitive Guide to Referral Incentives and Rewards
Referral Marketing 101: Everything You Need to Build a Referral Program That Works
How To Setup Your Referral Program’s Incentives (With 12+ Examples!)

Launch, promotion, and growth

The Perfect Checklist To Launch An In-App Referral Program
The 7 Mistakes To Avoid While Running An In-App Referral Program
How To Grow An App Referral Program Through Personalization
Building In-App Referral Program: Get Organic Downloads For Almost No Cost!
How to Grow Your Mobile App Revenue With a Referral Program
Referral Marketing 101: Turning Your Power Users Into App Advocates
How to Promote Your Mobile App Referral Program
The Definitive Guide to Referral Incentives and Rewards
28 Unique Ways Of Promoting A Referral Program On Web & Mobile
How To Calculate, Measure and Improve The Return-on-Investment (ROI) On Your Referral Program
How Top Apps Are Leveraging Referral Marketing to Boost Downloads 

Referral Programs Examples

9 Stellar Referral Program Examples
51 Best Referral Program Examples of 2016
Best Referral Marketing Examples
An Epic List of 74 Referral Programs
Hacking Word-of-Mouth: Making Referrals Work for Airbnb

Referral marketing software

Outro – Referral Automation Platform
AppVirality -Referral Marketing Software for E-commerce
ReferralRock – Online Referral Marketing Software
ReferralCandy – For Ecommerce
Ambassador – All-in-one Referral Software
FriendBuy – Referral Program Software
Talkable – Referral Marketing Software
Influitive – Advocate Marketing Platform
Extole – Advocacy Platform
RewardStream – Referral Marketing Software