Four lessons to remember before launching an app referral program

Most apps have a referral program. It is not a new and incredible marketing innovation which only came about a few years ago. Businesses for years and decades have rewarded loyal customers for referring colleagues, friends, and family. Websites and apps are only the latest entities to use the same business model to bring in new customers.

There is another reality one should learn about app referral programs - most of them don’t work out.

Referral programs can become the lifeblood of an app. It can solve many user acquisition problems and create a very loyal base of customers. Despite these advantages, most apps don’t really get their referral programs right. This is because of a myriad of factors such as lack of app quality and poor incentives for loyal customers. Everyone faces these problems, from those using a free online app maker to others making an app with code.

One has to understand the process of referral to then make sure loyal users actually execute it. What incentive would a user have to go through a referral process? What would the mindset of such a user need to be?

This piece gives out four lessons companies must remember before launching an app referral program.

#1 - Make the incentives attractive and attainable

Let’s say you use an online app making tool to convert WordPress website to Android app. You plan on selling premium subscriptions on this new Android app of your website. To promote your referral program, you draft the following CTA.

‘Refer this app to five friends and earn 10% cashback after each of them makes a purchase.’

Such a tagline is not uncommon in modern referral programs. Companies make these plans and think they stand to gain five new customers from each of their existing users. If the price is 10% cashback, they’re willing to meet it.  

Here’s the problem - existing users would neither find this offer attractive nor attainable. The 10% cashback is reasonable but not attractive enough to catch the attention of a loyal user. To then make this cashback achievable only after a whole set of actions makes the overall pitch mundane.

People love offers and discounts. The rise of many apps in developing countries like India has come at the back of attractive cashback deals and discount offers.

However, layering these deals beneath a whole machinery of actions makes them unattractive. Many app referral programs these days are like treasure hunts with a moderate reward in the end.

The solution is offering attractive offers and deals. To make loyal users perform highly desirable actions first requires companies to offer them truly attractive deals. Making the reward attainable is also important to ensure users actually go through with the process.

#2 - Make sure the app meets certain quality standards

How often do people recommend bad apps?

Such a thing seldom happens. Even if users are getting attractive deals in exchange for referring an app, they may not go through with it if the app lacks quality. Nobody would want to recommend an app which does not work.

You cannot expect a referral program to work if the app doesn’t meet certain essential quality standards.

How does one ensure app quality?

The first place to start with is mobile app testing. This will help you see the exact areas where app users could be facing a problem. There are various types of tests you can put your app through to make sure it meets the essential quality standards.

Studying user behaviour is another way to figure out an app’s quality. There are a number of app analytics tools which help companies see whether their app meets certain usage standards.

A bad app will fail despite an attractive referral program. It is thus wise to work on the app as well to make sure a referral program works.

#3 - Time your referrals well

Time is a crucial factor in the success of an app referral program. Even loyal users cannot be expected to go through with a referral program with a simple nudge. Offering the right incentives is the first step. Getting the timing right is the next.

When is it the right time to start a referral program?

Firstly, it is important to find the people in your user base who’re most likely to actually refer an app to someone else. Look for users who regularly share your app content on social media and mention your app organically. These are the people who’re most likely to refer your app to their friends and colleagues.

The time is based purely on the app usage habits of the segment of users you plan to target. Choose the moments when your target audience is most vacant and looking for something new. High activity times are not generally ideal to push referral program CTAs as they’d be ignored.

Study the response you get from each outreach and update your time, content, and target audience accordingly. It is possible your first attempt at promoting your referral program may not work. Keep experimenting until you start finding reasonable success with a particular set of creatives, audience, and schedule.

#4 - Marshall all available marketing resources

If you have a quality app and currently offer attractive deals, there is no reason your referral program shouldn’t work. The only thing left to do is marshall all your marketing resources and make a splash.

This doesn’t just mean running marketing campaigns outside the app. External platforms like social media and search engines are obvious avenues for marketing. Other channels like push notifications, in-app messaging, and app pop-ups are also credible ways to promote a referral program.

Referral programs drastically cut down user acquisition costs and improve the overall app ROI. Furthermore, new users coming from referrals may give the app more time than usual because it comes as a recommendation from someone they know. There is no better way to create a word-of-mouth effect in the digital world today.

In conclusion

From those who convert WordPress & WooCommerce to Android and iOS app to the ones who build an app with coding, everyone needs tracton. There is no point in starting an app if companies don’t have a plan to grow the user base.

App referral programs can contribute a lot to an app’s user base. However, the real challenge is deploying them. This piece provides four important lessons on launching app referral programs.