Competitive Exploration: Incentives Part 1
Airbnb and Dropbox use referral programs and social media following as incentive programs to increase their customer base and encourage existing customers to continue use their services.
We commenced the research to establish 2-3 best in class examples of incentive programs of e-commerce companies, specifically those that have a low velocity, high ticket e-commerce experience by identifying the e-commerce companies that have a high level of customer service tickets compared to a low number of overall transactions. We were able to identify two companies including Dropbox and Airbnb. We noted that these two companies had a thriving referral program and more than 10 articles each specifically targeting the referral programs. Next, we scanned through the official websites of the companies and we were able to obtain relevant information regarding incentives programs offered by the companies from their respective websites.
We also searched for additional information through credible business-related and media databases such as Forbes, Business Insider, Market Reports as well the social media pages and profiles of these companies. We were able to obtain additional information that detailed that the referral programs of these companies are among the best based on how the companies are able to successfully expand their customer base within a short period through the implementation of the referral programs, eventually leading to growth in revenue. Additionally, most of the articles that we obtained also detailed about the best strategies to set up the referral programs and refer business owners looking to set up and implement a referral based program to mirror the examples of Airbnb and DropBox. Lastly, we were able to establish that the other element that makes the two companies the best examples of incentive programs of e-commerce companies that have a low velocity, high ticket e-commerce experience stems from the fact that these two companies continually work on improving their incentive programs through analyzing data and making necessary changes according to the preferences of their consumers as well as the behaviors and trends of their online visitors.
Airbnb has a referral program that offers the referrer $25 travel credit for a successful referral of a client who makes a booking to stay at any Airbnb accommodation facility, and $75 credit for any successful referral of a person who signs up to list their home for accommodation services with Airbnb. Airbnb's referral program uses travel credits such as coupons with the referral made using clickable links that are redeemed for coupon codes.
Dropbox has a referral program whereby the referrer and the referee both get to earn free cloud storage space of 500 Mbs on the website's cloud storage platform. Additionally, Dropbox referral program that enables users to subscribe to the company's social media platforms and share their social activities while standing to benefit for free cloud storage services that are limited to specified storage spaces.
The primary objective of Airbnb is to make its clients feel that they could "belong anywhere" by offering accommodation services that are tailored to the specific needs of the clients. In 2017, the company recorded an annual revenue generation of $2.6 billion. Airbnb offers two referral services, one for the host of the accommodation services and another for clients who are referred to purchase accommodation services through Airbnb. Since introducing the "refer-a-friend" program that is meant to get friends to refer potential customers who want accommodation sharing to use Airbnb in 2017, the company was able to exponentially increase its customer base with a growth ratio of 1:1. Additionally, AirBnB's daily bookings raised by three times when they implemented the referral program.
HOW the Companies administer THESE referral PROGRAMS
Airbnb only carried out a closed beta test of the referral program on its existing customers. The details of the referral programs are listed and explained on the company's terms and conditions section of their website. AirBnB details on the company's website on a user can earn redeem and qualify for travel credits, and how to share referral links with friends.
The primary objective of Dropbox is to "to unleash the world's creative energy by designing a more enlightened way of working." In 2017, the e-commerce company generated annual revenue of $1.1 billion. Dropbox offers various incentive services to its customers that includes providing 125 Mbs free space to customers who follow the brand on Twitter as well as 500 Mbs on customers who refer their friends to use DropBox cloud storage services. Additional, customers who share their experiences of their activities on Dropbox on social networks platforms are eligible for 100 Mbs of free cloud storage space from the brand.
SUCCESS OF INCENTIVE PROGRAMS
The Airbnb program enabled the company to increase its number of registered users by 100,000 bringing the number of registered members to four million in four months. The "refer-a-friend" referral program of Airbnb was responsible for enabling the company to its daily signups by 35% in 2015.
On the other end through its referral program, Dropbox has accounted for at least 9.76% of the company's monthly growth to its referral program. The company has detailed a step by step procedure of how to refer a friend to DropBox on their Help Center.