In today’s mobile world, acquiring new users is a challenge and keeping them is another. When we look at the effectiveness of the app marketing strategies, referral marketing comes as one of the most important ones. Since people are more likely to download and keep the apps that have been referenced by their friends, it’s a very important method to also protect the user base. It’s already known that many companies hit the growth by using word of mouth and social references. In that way, people love to keep using the apps, and that brings high retention rates, more successful conversions to sales.
What is referral marketing?
Referrals are the first impressions a consumer gets of your app and can trigger a purchase decision. So, to make sure that your app and your brand are top-of-mind, you need to get your customers involved with your mobile app in some way. Referral programs are the best way to do this because they require minimal investment from the end-user.
In the referral marketing strategy, the user or potential user of your mobile app not only gets to see your app and become aware of its existence, but also receives a reward for doing so. Some of these rewards include credits, coins, bonus content, and special discounts. A referral program is also a great tool to drive awareness and popularity of your brand – especially on mobile, as apps are increasingly becoming a part of our daily lives.
The benefits of referral marketing for mobile apps
On the website, referrals are a natural way for your visitors to share your products or services with their friends. App-based businesses, however, can take it to the next level by offering referral campaigns to their users. As the number of apps continues to grow and more users get attracted to them, developers can explore various marketing strategies to attract new users.
Here are some of the benefits of referral marketing:
- Lower cost for user acquisition campaigns: Since you don’t have to spend any advertisement cost on referral marketing, you can drive customers by only providing discounts and gifts which will cost less than ad campaigns.
- High retention rate: When you keep gaining loyal users, it will bring higher retention to your apps since your users will be interactively using the app. You can expect longer app sessions and high retention rates.
- Less churn rate: It’s proven that people are more unlikely to delete the apps that they downloaded by reference. So that will reduce the churn rate and more customer loyalty.
The challenges of mobile app referral marketing
As much as it seems that referral marketing is great and easy to apply, there are different challenges to overcome. Let’s check out some of them that mobile app developers face when they attempt to replicate the success of their competitors’ apps.
Challenge 1: Testing effective referral strategies
It’s hard to test every possible tactic in the app development cycle to make sure your campaign will be a success. It may be gamification, providing a discount, or something else. You should understand the users' persona at first and then decide what referral marketing strategies you’ll use for them.
Challenge 2: Asking users to share your app at the right time
Users wouldn’t be pleased if you asked them to share the app with their friends on the first day they downloaded the app. Knowing when and how to approach users is one of the key rules to succeed at referral marketing. Try to make them comfortably share the app with their friends. If you push them, it will probably backlash and you’ll use more customers rather than gaining.
How to create the best referral program for mobile apps?
First things first: App developers should understand that each person who downloads their app has a referral code. The code is associated with a specific person on the device’s contacts list so that anyone with that number can send a friend to install the app. These codes can come from your email marketing list, from your friends or family, or from people who participated in other marketing activities. Of course, you must consider that there is a chance that users will not have the code, but such a scenario is not the norm. Having said that, you should make it your goal to get codes from every user. This helps you find those who will refer other people to download your app. But what are the best strategies to build up a solid referral program?
- Use the right software programs to track the user acquisition sources
- Provide generous and smart offers that will charm users to share
- Create engaging user flow so people will be happy to interact
- Test & analyze every strategy to develop upcoming methods
As you can see, a referral marketing program is an excellent way of increasing app sales. We encourage you to try a few things to grow your app’s conversion rates and by the end of the article, you will know how to set up a referral program for your mobile app.