Referral Marketing 101: How did UberEats acquire customers so quickly?

5 mind-blowing ways UberEats used referrals to acquire customers - and you can too!

Despite the power of targeted advertising, consumers are still more likely to patronize a business that’s recommended to them by friends or family. Referrals and reviews are the digital counterparts to friend recommendations. In fact, 9 out of 10 customers will make a purchase based on a positive brand referral. Companies like UberEats have been harnessing the power of referral marketing to acquire new customers and guess what -  you can too! 

Come along as we take a look at 5 brilliant ways UberEats has leveraged referral marketing to expand its business globally and earn customer loyalty. 

What is Referral Marketing?

Referral marketing is a tried and true method of using word of mouth to grow a business. In this day and age, we can track and reward customers for referring friends and family simply by using promotional codes & offers. A well-thought-out referral program can increase customer lifetime value (CLV)  and the average ticket value (ATV).

Although referrals are one of the most organic marketing methods that exist, brands must influence the process in order for referrals to accelerate customer acquisitions quickly like UberEats.

UberEats & Exponential Growth

UberEats has become a leader in the food delivery sector, growing revenues by 103% in 2020. With the current pandemic, people are relying on food delivery apps to receive their meals safely and conveniently. They have even expanded their operations to deliver groceries and essentials in response to global lockdown measures. In 2020 alone UberEats generated $4.8 billion with an estimated 38% of that revenue coming from successful referrals! As business continues to surge for UberEats, they’re constantly looking for drivers to service their customers 
 

Powerful Referral Rewards

UberEats offers rewards to make referrals easy and attractive. They have two main targets for their referral program: drivers & customers. When drivers invite friends to deliver using the UberEats app, they can earn a reward if the referred person successfully completes a certain number of deliveries and meets the requirements. New drivers receive a sign-up bonus upon successful completion of deliveries. The referral reward can range from $100-$1100.

Customers are incentivized to make referrals on the UberEats App with their Refer-A-Friend program. Customers are given a referral code to share with friends, which allows them to earn cash discounts on their meals. This feature allows UberEats to acquire a constant stream of new customers who are rewarded for making their first purchase on the UberEats App.

One of the main benefits of friend referrals is the snowball effect it will have on your ability to acquire new customers as displayed in the graphic below. 

Social Media Referrals

The next step in referral marketing is shareability. Customers have the ability to share their referral codes through the UberEats app and on the website. UberEats leverages the strength of personalization to build trust with new customers. Users are given a custom referral link that includes their name which adds familiarity and in turn, builds trust between the referred prospect and the business. The custom referral link can be copied and shared through messaging, email, and social media with 80% of referrers sharing through text message. Users are also able to track the status of their referrals in the Uber App, allowing them to nudge friends who haven’t yet responded to the shared link. 

• The referral code can be shared via emails, social media, or anywhere else.
• Drivers can refer directly from their contact list with a unique invite code found in the app

The beauty of a referral program is that because it is an organic recommendation, engagement is guaranteed by human connection and a prospect of a reward, it enables the brand to achieve visibility and trust with very little investment in time and money. Through social sharing, a business can increase its acquisition efforts by 35%. 

When promoting a referral program, having a clear and exciting call to action is the way to go. UberEats uses the tagline “Free Food” to excite and delight customers about the rewards associated with sharing a referral with a friend. 

Completing the Customer Referral Cycle 

To ensure a referral program successfully meets its objective, it’s important to let customers know when the reward will expire. This creates a sense of urgency for the customer & referred person to not lose their reward. For example, UberEats’ promo code will automatically apply to the current or next order and expires after 3 months if not used. 

UberEats’ referral program is a gated rewards system, thus ensuring only qualified customers are rewarded once the desired behavior has been completed. This structure is an effective way to ensure a minimum spend is met in order for both parties to be rewarded, thereby increasing average ticket size and boosting overall sales. 

It’s a win-win for customers and brands!

Referrals for Growth

UberEats is a great example of how to grow a business using the power of digital referrals and rewards. They have shown how easy and cost-effective it is to acquire new customers and boost revenue in a highly competitive market.

A referral program is an affordable and easy component of any business's marketing strategy, regardless of the channel that is not limited to the biggest brands. Kangaroo is a loyalty rewards program that will provide you with the capabilities to launch your own referral program for your business whether it’s eCommerce, brick and mortar, or a multi-channel business.

Easily configure your referral program to meet your business needs and goals with a personalized referral program to match your brand.

With Kangaroo Rewards, you can launch a successful referral marketing campaign like UberEats in minutes! Connect with one of our Loyalty Experts to find out how. 

Click here to book a demo!