What is Two-Sided Referral?

The marketing tactic of "Two-Sided Referral" revolves around a simple yet powerful concept.

It's all about giving your existing customers an incentive to refer your product or service to someone they know and also providing a reward to the new user who decides to opt for your brand. This enables businesses to grow their customer base, as they give two benefits - one to the existing user for making a successful referral and one to the new user who joined through the said referral.

The birth of Two-Sided Referral as a marketing growth tactic can be traced back to the growth in online platforms and businesses. Companies like Dropbox, Uber, and Airbnb further popularized it by effectively integrating these dual-sided incentives into their customer acquisition strategies. This tactic has proven successful especially when the aim is to increase "Traffic", as it empowers businesses to stimulate growth through word-of-mouth recommendations and by stimulating users to join and engage with their platforms.

Examples of Two-Sided Referral

1. An online education platform could use this tactic by offering a free course to users who refer their friends, and a significant discount to the friend who joins through the referral.

2. A mobile game developer could award special in-game currency to players referring other players to download and play the game. The new players also get a welcome package to get them started.

3. An e-commerce platform could give existing users discount coupons for each new user they bring. Similarly, newcomers get a discount on their first purchase.

4. A streaming service could offer a free month of services to existing customers who refer newcomers, and the new users also receive a free trial period upon joining.

5. A gym could offer its members a free month in the form of referral incentives and give newcomers a free personal training session when they join.

Marketing Tactics Similar to Two-Sided Referral

1. Affiliate Marketing: This involves paying existing users or independent advertisers a commission for referring new users or customers.

2. Loyalty Programs: These reward customers based on their regular or continued patronage.

3. Incentive Marketing: This strategy uses incentives to encourage customers to take specific actions like making a purchase, referring a friend, etc.

4. Viral Marketing: This approach seeks to create content that existing customers feel compelled to share with others, which ultimately leads to more site traffic or user acquisition.

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