How to Create a Referral Program That Achieves 3900% Growth: 9 Strategies From the Experts
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Want to know how to do referral marketing the right way? Of course you do, it’s one of the best ways to achieve massive business growth.
Referral marketing is when you use your audience to do your marketing for you. One person refers your business to two friends, those two friends each refer it to two more friends, and so the snowball effect grows and grows. If you want to grow your business fast, then referral marketing is one of the best ways to do it.
Just look at Dropbox. They ran one of the most successful referral marketing campaigns, with truly mind-blowing results.
In this guide, we’ll uncover Dropbox’s legendary referral marketing program, including nine of the best referral marketing tips, strategies, and hacks. These come from the Dropbox campaign, as well as from a few referral marketing experts.
Use these strategies to achieve massive growth for your own business.
- What is Referral Marketing?
- The Dropbox Referral Campaign
- 5 Referral Marketing Hacks from Dropbox
- 4 Bonus Referral Marketing Tips From the Experts
What is Referral Marketing?
First, let’s cover what exactly referral marketing is. Referral marketing is a form of word of mouth marketing, where you use outsiders to spread the word about your business. You achieve this by engaging your customers and offering them an incentive for referring your business.
A common example of this would be saying something like “get a friend to sign up and enjoy 10% off your next order”.
The main idea behind this is that referral marketing lets your current loyal customers become your brand advocates. It’s an incredibly cost-effective strategy because you don’t have to spend any money on ads or influencer promotions. Word-of-mouth marketing also results in greater success because people trust their friends and family more than they trust messages from brands.
It’s a more authentic form of marketing, and it can pay off big time if you get it right.
The Dropbox Referral Campaign
Dropbox ran one of the best referral marketing programs we’ve ever seen. The company grew to 4 million users extremely quickly, achieving 3900% growth!
And they did this with referral marketing.
Dropbox offered its users additional storage space for free by inviting their friends to join. As soon as users signed up, they received this email:
The users added the email addresses of their friends and family. They received more storage space in return, and Dropbox roped in loads of new users.
Pretty clever, right?
Let’s break down why this campaign was so effective.
Or, watch this video that covers the topic in detail:
5 Referral Marketing Hacks From Dropbox
So, how exactly did Dropbox achieve such massive growth in only a few months with its referral marketing program? We can break the program down into five steps. Let’s outline how each step helped the company achieve such major growth.
If you want to know how to create a high-impact referral marketing program, keep these five strategies in mind.
1. Make the Referral Program Part of the Onboarding Process
Onboarding can be a painful experience for the users, so Dropbox switched things up and made the process a simple six-step walk in the park. The key here is to add your referral program as one of the onboarding steps.
Dropbox knew this and set up the referral program as the final step.
They also used a psychological trick. Dropbox reframed the common phrase in referral programs “Invite your Friends” with something more personal. They said, “Get more space,” which resulted in a great way to appeal to one’s self-interest instead of spreading the word about Dropbox.
2. Make the Benefits Clear
According to Drew Houston, Dropbox’s founder, their referral program was inspired by Paypal’s refer-a-friend program.
Paypal rewarded referrals with cash, and Dropbox decided to use its cloud storage as a motivator.
With a clear reward at the forefront, Dropbox was able to capture the attention of its users and inspire them to take action.
3. Make it Easy to Invite Friends
To bring users’ friends and family onboard, Dropbox offered several options. They could share the referral offer via social media or send their unique code using whatever platform they wanted, like messenger apps, email, SMS, etc.
But Dropbox didn’t settle and came up with one of the best invitation hacks ever.
Although email is powerful, sending invitations to your contacts one by one isn’t. So Dropbox had the option to sync your contacts from providers like Gmail, AOL, and Yahoo and send out invites in bulk. This made it very simple to invite multiple contacts at once. Genius move!
4. Let People Know the Score
If you want an explosive referral program like Dropbox, then you should give users goals. People are wired to try to reach goals. People also love competition.
Dropbox showed users how close they are to attaining more free storage, and many other referral programs left you guessing.
To see the status of their referrals, Dropbox created a special panel that users could access at any time.
Make sure your users know what their score is in the referral game!
5. Add a Viral Loop
Every user that signed up to Dropbox using the referral program was also awarded 500MB of free storage for accepting the invitation. And at the end of the invitation email, there was a P.S. that read, ‘To get even more space, invite your friends or upgrade your Dropbox’.
This one simple line created one of the best viral loops in history by using a 2-sided referral program where both users got something from the referral.
4 Additional Referral Marketing Tips From the Experts
While referral marketing campaigns are relatively straightforward, there’s also a lot to consider to make sure your referral campaigns create the biggest impact possible.
Here are 4 extra referral marketing hacks from marketing experts.
1. Emphasize Rewards Over Actions
“When you promote the referral marketing campaign you’re running, it’s important that you emphasize what the customers get instead of what they have to do. This idea was inspired both by Dropbox and Uber’s viral referral programs. Use copywriting that says “get discount” instead of “invite friends”. The main idea behind it is that you don’t have to do a job, but you get a reward.”
- Nik Filos, marketing expert at Viral Loops. Viral Loops is a specialist referral marketing platform.
2. Use Explicit Language, Not Implicit Language
“This is another strategy based on copywriting. Using language like “I recommend something” is an explicit type of argument, while “I like something” is an implicit type of argument. Throughout your customer journey and throughout your web pages, you should ensure that when customers communicate with their friends, they’re more eager to use and share explicit statements. There has been marketing research done by the Journal Of Marketing revealing that people trust explicit arguments and statements more than implicit ones. They perceive them as more knowledgeable. So, make sure that people recommend stuff. Instead of just saying “I like this” they should say “I approve this, try it”, which is going to be much more effective.”
- Nik Filos, marketing expert at Viral Loops. Viral Loops is a specialist referral marketing platform.
3. Add a Valuable, Tangible Benefit
“At Wishpond, we’ve analyzed dozens of referral programs to learn from them and help our clients get better results. The best programs that we see offer something tangible for both parties like a monetary benefit. For example $20 off or $50 voucher. It’s this kind of rewards that gets the best results.”
- Chris Stanislawek, marketing manager at Wishpond. Wishpond is an all-in-one marketing solution that helps clients run powerful referral marketing campaigns.
4. Incentivize Customers to Increase Their Referrals
“Incentivize new customers to refer friends early on their journey. Introduce referral goals, where the more referrals they make, the greater their reward will be. Do this to benefit from their more explicit referrals to friends, which they will do straight away. The by-product is that they get more invested in the product and continue to refer it to more friends. Take a look at how The Hustle does this. They introduce a referral program early on, giving their subscribers different levels of incentives to make a lot of successful referrals.”
Create Your Viral Referral Program
15 months after implementing its referral program, Dropbox achieved an astounding user growth of 3900% and passed the 4M registered users mark. It’s safe to say that’s a great result.
Referral marketing and word-of-mouth is an incredibly powerful growth strategy for any business. By following the nine pieces of advice above, you too could generate explosive growth for your business in short space of time.
Now it’s your turn. How will you implement these referral marketing tips in your growth strategy?
If you want to run your own referral marketing campaign, then you’ll need to use the right tool to do it. Try out Wishpond’s Referral Marketing suite to help you create referral programs that go viral.
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