- 16.5% of traffic to Square comes via referrals.
- Facebook is now the second biggest source of online referrals after Google.
- Company Dropbox is noted to be "an all-time referral marketing champ" that had a 3900% growth rate from their referral program.
- The Robin Hood referral program gives users a reward stock for everyone they invite to join who signs up, and the program is thought to have driven much of the company's rapid growth in users.
Provided below is information on referral programs for Square, Robin Hood, Yelp, Facebook, TikTok, Snapchat, and Google, as well as several examples of alternative companies' referral programs. For each, relevant statistics, growth drivers, market information, conversion and revenue impacts, and as much information about the competitive landscape is provided as is available.
- Square's referral program is a simple format where existing customers are given a custom referral link, which can be shared directly or added to receipts and invoices.
- When an existing user refers a new customer, both receive free processing on up to $1,000 in sales over the next 180 days.
- Square also launched an expanded referral bonus program which offered $4000 for women and underrepresented minorities as an inclusivity and diversity initiative.
- While there was limited data on the success of response to the standard referral program, the bonus program was noted to not drive meaningful change in sign ups and eventually canceled
- However, one source does note that 16.5% of traffic to Square comes via referrals, suggesting it is a significant source of new customer sign up, with 17% of traffic from search engines. However, this figure also includes 1,612 sites linking directly to Square.
- The core customer base for Square comes from their content marketing approach, which allowed the company to "gain a core group of loyal users and then scale that success" according to the company's director of product communications and marketing. This is combined with influencer and niche marketing campaigns.
- However, it is also noted that referrals may have supported long term growth in that “positive word of mouth and delightful experiences” helped Square standout over their competition.
- While it's not noted how much of this was related to referrals, Square's annual revenue in 2020 was $9 billion, with over 2 million merchants using the app.
- The Robin Hood referral program gives users a reward stock for everyone they invite to join who signs up.
- Value of reward stock varies, with approximately 98% of participants receiving a stock reward with value of $3-$10, approximately 1% of participants receiving a stock reward with a value of $10-$50, and approximately 1% of participants receiving a stock reward with a value of $50-$225.
- While it's not noted how many of the new users are a result of the referral program, the app currently has over 18 million funded users.
- One source did note that free stocks 'serve as a referral engine to drive other people to the product', and that there were approximately 3 million new users in the first four months of 2020.
- It was also noted that over 80% of Robin Hood's new funded accounts in 2020 occurred outside of paid marketing campaigns, either organically or via referral programs.
- The apps user engagement and acquisition strategy is centered around targeting young investors through gamification, which involves behavioral triggers and rewards, and the referral program is integrated into that strategy.
- Facebook is now the second biggest source of online referrals after Google.
- E-commerce sites specifically are dependent on Facebook referrals, with 80.4% of social referrals to e-commerce sites coming from the platform.
- A study of all types of websites showed that the average website gets at least 3.5% of their traffic from Facebook referrals.
- In Q1 of 2020, Facebook referrals represented 42.6% of all social media referrals, which was in part due to $84 billion in revenue the company received from advertisements.
- Some categories of websites and digital media are further dominated by Facebook referrals; lifestyle pages, presidential politics, and local events.
- Facebook News referral traffic also added to the growing number of referrals from the platform, as it further supplemented news feed traffic referrals. The platform compensates participating publishers for their coverage.
- TikTok's referral program gives users points when they refer friends who become a new user of the platform, using a referral code.
- Points are redeemable for rewards, predominantly gift cards from retailers and restaurants.
- The referral program was launched in 2019, to make up for the decrease in potential new users when India banned the app.
- There are approximately 689 million TikTok monthly active users internationally, and 100 million in the US.
- Most of the success of the app is attributed to AI that matches users to recommended content combined with viewing habits and click-bait media.
- While it's not clear how much of the success of the app is attributed to referrals, one source does note that TikTok's referral approach has drawbacks.
- Issues with the referral program included lack of clarity around how many points a user collects for referrals, and issues with the rewards system tab working properly for users to redeem rewards once earned.
- TikTok created another similar referral program called TikTok Perks, which offered prize crates, which had similar issues.
- TikTok also offers a program called Coins, which allows users to buy an in-app currency with real money and use it to tip content creators during live streams.
- Snapchat only began allowing external referral links to be attached to Snaps and Stories in 2017.
- However, the platform does not have an official referral program.
- While they don't have an official referral program, a Snapchat business account can allow users to optimize marketing campaigns and advertisements on the platform for their own referral strategies.
- The platform had 265 million daily users as of the end of 2020.
- The platform is most used by younger demographics, reaching 75% of 13-34-year-olds, and 90% when looking at 13-24-year-olds, but has had limited popularity or growth amongst older users.
- As a whole, Google drives more traffic and referrals than all social media networks do combined.
- For most industries, Google search drives over 50% of web traffic.
- While Google doesn't have a formal referral program, media and websites related to many industries, including business, finance, sports, and tech are most commonly referred from Google.
- Facebook is quickly becoming a competitor to Google referrals.
- However, it's noted that more than two-thirds of e-commerce website traffic comes from Google, and 87.85% of health and medical traffic comes from Google.
- While the main Google platform doesn't have a referral program, Google does offer Google Guides to engage users with searches for local information, as 46% of all Google searches have the intent of finding out local information.
- Google 'guides' are members of the community “who write reviews, share photos, answer questions, add or edit places and check facts on Google Maps”.
- Participants receive badges, points, and occasionally special perks such as early access to new Google features.
- Yelp doesn't have a referral system.
- In fact, in order to support organic reviews, the site discourages referrals for reviewers, even penalizing businesses for encouraging patrons to leave reviews.
- To encourage neutrality, the site even used its algorithm based platform to issue “search ranking penalties” to businesses asking for reviews from their customers, especially if using Yelp is associated with a reward.
Other Rewards & Referral Alternatives
- Dropbox offers a referral program where existing users and the person they refer both get 500 MB of free space.
- One source notes the company is "an all-time referral marketing champ" that had a 3900% growth rate from the referral program.
- Evernote is also known to have a successful referral program, where referers earn Evernote points that can be used for premium membership.
- The referral program is linked to rapid growth, with the platform now having over 100 billion worldwide users.
In order to provide information on referral programs for Square, Robin Hood, Yelp, Facebook, TikTok, Snapchat, and Google, as well as several examples of alternative companies' referral programs, we sourced data from business and industry reports, media and press releases from the companies themselves, and expert marketing sources.