Referral program in world practice

Reviews and word of mouth are perhaps the most reliable source of information when choosing many products and services. Of course, any company seeking to increase profits and the number of customers does everything possible to encourage customers to share reviews, opinions and make them refer their friends. One of the first brands to include a referral program in its strategy for rewarding loyal customers was PayPal. Clients only benefited from this.

What is it about

Referral marketing is a technique that allows loyal customers to refer their friends or acquaintances to the company they like and receive various rewards for this. Essentially, a referral program has the same effect as word of mouth, but is initiated and managed by the company.

 Rewards offered to customers can take many forms:

• discounts;
• money;
• free products;

PayPal: unheard of generosity

PayPal today is an American holding company offering an international payment system, known to a huge number of users around the world. The company gained momentum very quickly thanks to the reward system.

It was customary to pay real money as bonuses. Everyone who registered in the system received $20. If the user invited a friend, he received another 20 dollars. The opportunity to earn real money attracted people’s attention almost immediately - few people can refuse such passive income. The community of customers grew to 100 thousand people in the first month alone.

A record budget was spent on the rewards program - $60-70 million. This amount significantly exceeds similar investments of other well-known corporations that followed the example of PayPal.

The PayPal referral program is considered today one of the best thanks to the generosity of the organizers. By the way, similar referral programs - with the opportunity to earn real financial resources - exist in Ukrainian business practice. Want to know more about this? Read in our next issues.