How to Optimize Referral Programs
Analyzing 15 start-up referral codes + landing pages
I’ve been hustling for jobs. The challenge is that the companies I’m most interested in don’t have an open position that fits my background and level of experience (May Scripps College econ & Mandarin grad who recently completed the growth track at Tradecraft). As part of my hustle, I’ve been passing along referral codes. I want to prove that I can add value.
The process began with Uber and Lyft rides. The driver would ask me about what I do, and I’d start talking about Tradecraft, my journey there, and some of my lessons learned. But then it dawned on me to take advantage of the one-on-one conversations with a stranger to practice pitching a startup — motivated by just wanting to survey thoughts about the startup, and how it could improve or be better marketed. I’ve focused on discussing Wealthfront, since it’s a company I’ve determined I would really like to work with.
Challenges with Referral Codes
At the beginning of my fun project promoting start-ups to Uber & Lyft drivers, I would casually mention the driver could get xyz free with my code. After practicing the “pitch” on a few people — they started asking me if I had a code!
After a few rides, a few challenges arose:
- Remembering the code
Many of the referral codes are random combinations of letters and numbers, so I’d have to look up the code in the app on my phone.
- Writing the code down
I mostly take rides if I am leaving Tradecraft particularly late. Since it’s dark, it was challenging to write my code(s) in the driver’s notebook or on the back of a random receipt because I had difficulty seeing what I was writing, or writing while the car was moving.
Solution: I created business cards:
Improving Referral Codes
After challenges remembering my referral codes, I wondered if referrals increase if the code incorporates the person’s name.
- Codes would be easier to remember, and could be easily mentioned in casual conversation.
- People would feel more affinity to the company, and feel that they were personally contributing to the company’s success.
I began my quest for solving this question by analyzing my referral codes.
Analysis of My Referral Codes and Sitelinks
Airbnb — www.airbnb.com/c/iherlihy
Dropbox — https://db.tt/QuEs3i2i
- I created bit.ly/InaDropbox
- I created bit.ly/InaEvernote
Hotel Tonight — promo code IHERLIHY — http://htltn.com/1thncpr
- Great personalized code, but the site link should be personalized too!
- I created bit.ly/InaHT
Instacart — http://inst.cr/t/pCkesb
- I created bit.ly/InaInstacart
Lyft — code INA85 at www.lyft.com/i/INA85
Munchery — promo code 6ZHJG67X — https://www.munchery.com/invite/6ZHJG67X/
- I created bit.ly/InaMunchery
Nextdoor — www.nextdoor.com/!CHAZMN
- I created bitly.com/InaNextdoor
Postmates — code 5l5lq — bit.ly/1hRSGkD
- I created bit.ly/InaPostmates
- To get the referral link, click profile, then “Earn Free Shipping” I’m curious about the difference in the number of referrals instead of an “invite a friend” link
- I created bit.ly/InaShyp
Sprig — code HerlihyH9U — download the Sprig app at app.sprig.com
- Suggestion: Have a download link with the referral code embedded, to eliminate a step in the sign-up process
SpoonRocket has a flawed referral program.
- When I posted to Facebook (with a visible by “only me” privacy setting), the click “here” button was not hyperlinked, the website wasn’t mentioned, and there was no promo code.
Teespring — http://teespring.com/invites/gzvyfa
- I created bit.ly/InaTeespring
- I created http://bit.ly/InaUber
Wealthfront — http://wlth.fr/1vXfxPM
- I created bitly.com/Wealthfront and bitly.com/InaWealthfront
I turned to bit.ly to create personalized codes that include “Ina” — so they were easier to remember.
Other start-ups should follow Eventbrite, and allow users to create personal links without leaving their site.
I analyzed 15 referral codes, and only four (Airbnb, Hotel Tonight, Lyft, and Sprig) had my name automatically included in either the referral code or/and site link.
Why Personalization Matters
Airbnb has a great culture of continuous learning, with their Tech Talks and blogging about lessons learned — so I wanted to see if their personalized referral program was because of insight from an experiment. It was!
Jason Bosinoff, Airbnb Growth Engineering Manager, blogged about how his team reengineered the referral program to increase user signups and bookings by over 300% per day. They selected their success metrics before beginning, after an inspiring Airbnb fireside chat to “keep score and win games” by Wealthfront CEO Adam Nash.
Jason and his team created personalized referral codes and landing pages with a photo of the inviter. Referrals increased booking by over 25% in some markets.
Personalized Landing Page Variations
Shyp and Instacart have personalized landing pages with a photo and name, but no personalized referral code.
(*Sidenote on Instacart — I created an account through Facebook, and it automatically pulled my profile photo. I couldn’t find a feature to upload a different photo.)
Nextdoor has a personalized landing page with a name and photo when referred through their $25 Amazon card promotion for new neighborhoods, but no personalization through their standard email invite.
There are also variations to the inviter’s name:
- Airbnb, Instacart, Uber = Ina
- Nextdoor, Lyft = Ina H.
- Munchery, Shyp, Wealthfront = Ina Herlihy
When personalizing referrals, it’s important to design it for your specific start-up. Andy Johns, Director of Growth & Revenue at Wealthfront, mentioned that Wealthfront doesn’t include an individual’s photo on their referral landing page, because of the sensitivity of investing.
Use Rankings to Increase Referrals
Individuals are often incentivized by competition.
“A horse never runs so fast as when he has other horses to catch up and outpace.” — Ovid
Nextdoor leverages this behavioral economics insight by including a leaf with the number of each user’s accepted invites. It creates a fun competition amongst neighbors (or maybe just for me!) to see who can be #1 on the “View Top Inviters” page.
But this strategy doesn’t work for every startup whose referral codes and links I analyzed above. Users need to have public profiles on the site.
3 Concluding Recommendations
- Personalize referral codes
- Personalize landing pages with the inviter’s name and photo (depending on the startup)
- Create a referral competition among users