Referral marketing: the power of word-of-mouth on app promotion

When people are looking for a solution, we generally ask those closet to us that we trust, questions such as “do you know a good mechanic?” to “what a nice top, where did you get it?” people trust their social circle to seek solutions. Studies have proven that word-of-mouth plays a crucial role in the decision-making process. 

Referral Marketing is a strategy that transforms customers into a “brand advocate” by indicating your product or service to their social network. It goes beyond organic referrals, with tactics and metrics to encourage new referrals. For app promotion, the goal is to use current users to attract new ones. 

In this process, the marketing team’s role is to intensify this “word of mouth,” ensuring that more users talk about the incredible features they have used. It happens quite organically when people genuinely like the experience that they had with a brand. You can still implement some incentives to ensure that these interactions are always timely, useful, and relevant.

Usually, clients tell people about their social circle that they think they’ll be interested in your mobile app. This means that you don’t have to make an effort to find these people. In the context of food delivery mobile apps, which are today one of the fastest-growing sectors and are expected to continue to grow during the following years, the recommendation from family, friends, and colleagues is essential in the decision-making process of a new user. Also, a study developed by the University of Saragosa shows that word-of-mouth in this industry is more critical for older people than for the young generation. 

The key benefits of a referral marketing strategy for mobile app

Imagine the following scenario:

A user downloaded your app and was immensely satisfied with it and the user experience provided and the solution’s value. It starts talking well about it to other people such as friends, relatives, co-workers, etc. These people are attracted and convinced by the positive comments about your mobile app. 

Did you notice that the process of arriving new users to you started with the recommendation made by that first consumer who had a good user experience and transmitted that satisfaction? It not only spoke well of the app but carried out a “marketing” action about it.

Big players of the mobile app industry already use that well! Uber offers a discount code for those who recommend a friend. Spotify users of the free version will get one month of premium, and existing Premium users will not pay for their current month if they recommend a friend. Mc Donalds offers a free McVeggie burger for the user and its friend.

  • Super segmentation: as said by Jonah Berger, author of the book Contagious, “nobody recommends diapers for those who don’t have children.” In plain English, the job of defining and finding your ideal customer is almost ready. This is usually the main point that takes companies to the death valley in the first years of activity;
  • Lower CAC:  the cost of user (or customer) acquisition can be an obstacle for those who grow fast. With referral marketing, this can be reduced s recommendations lend their credibility to the app.

Examples of Referral Marketing strategies that you can implement

You can encourage referrals from your current users by offering one or more prizes based on the number of referrals. The rewards can be free subscriptions for a period of time or a merch, for example.

Also, you can send codes or links for your current users to share with their social network. Thus, these people can win free products, discounts, or free trials on some of your mobile app features. 

In addition, an excellent way to do this is to invest in influencers. They will spread your brand across you, introducing your mobile app to thousands of others, depending on their audience’s size. 

The metrics of a referral program

To make sure  your referral marketing strategy is successful, you must measure some essential metrics:

Referral rate:  it measures the penetration of your referral program in its base. To improve this rate, ask yourself: how many of your customers are satisfied with your app? What are the key moments to ask for an indication?;

Cost of acquiring users: it is how much you spend to reach new customers. Ideally, the cost of users acquired by referral marketing strategies must be less than what you spend on your other acquisition channels;

Lifetime value: it is the total amount that a customer spends in your company over time. By knowing it, you will understand how much you can invest in acquiring a user.

Per capita referrals: measure how many new users each of your indicated clients can generate. Referring friends is related to satisfaction with your app, and the point of contact you ask for a referral. Therefore, this is a fundamental metric for the optimization of your referral marketing;

Total referrals: is the total number of new users generated by that channel.

Conclusion

There is no question that there is a massive opportunity with referral marketing when promoting your app. Using referral marketing can help increase the number of users for your mobile app. 

You must ensure that your potential users know they can benefit from telling their friends and family about your mobile app.

Try out these suggestions and tell us about your referral marketing journey! Not sure how to start it?

Get in touch with us for a free consultation!