Case Study: Boosting Referrals with a Dual-Incentive Program and Instagram Ads

Introduction

A meal kit delivery service sought to expand its customer base through word-of-mouth marketing. Recognizing the power of personal recommendations, the company introduced a referral program offering mutual discounts to both referrers and referees. To amplify the program’s reach, they ran Instagram ads featuring real customer reviews. This approach resonated with their target audience and led to a 40% increase in referrals, proving the efficacy of combining social proof with a compelling incentive.

Objective

The primary goal of the campaign was to increase referrals and acquire new customers cost-effectively. Secondary objectives included strengthening brand trust through customer testimonials and enhancing engagement on social media platforms.

Strategy

The strategy revolved around two core elements:

1. Referral Program with Dual Incentives:
   • Referrers received a $20 discount on their next order for each successful referral.
   • Referees were offered a $20 discount on their first purchase, encouraging sign-ups.
2. Instagram Ads Featuring Social Proof:
   • Leveraged authentic customer reviews to build trust and credibility.
   • Created visually appealing ads showcasing happy customers and their favorite meal kits.

Execution

The campaign unfolded over three months, with the following steps:

1. Launching the Referral Program

• Promoted the program through email campaigns, in-app notifications, and website banners.
• Provided referrers with unique referral codes to share with friends and family.

2. Creating Instagram Ads

• Designed ads featuring real customers sharing their experiences with the service.
• Used captions like “Love our meal kits? Share the joy and earn rewards!” to encourage participation.
• Highlighted the dual-incentive offer in ad visuals and descriptions.

3. Targeting the Right Audience

• Focused on demographics interested in healthy eating, cooking, and subscription services.
• Used lookalike audiences based on existing customers to reach potential high-conversion users.

4. Monitoring and Optimization

• Tracked referral rates, ad engagement metrics, and conversion rates weekly.
• Adjusted ad creatives and audience targeting based on performance data.

Results

The campaign delivered outstanding results:

• 40% Increase in Referrals:
  • The referral program significantly boosted new customer acquisitions.
• Enhanced Engagement on Instagram:
  • Ads achieved a 35% click-through rate (CTR) and a 10% conversion rate.
• Improved Brand Trust:
  • Featuring real customer reviews in ads led to a 25% increase in positive brand mentions on social media.
• High ROI:
  • The campaign’s cost per acquisition (CPA) was 30% lower than previous paid acquisition strategies.

Key Learnings

1. Dual Incentives Motivate Action:
   • Offering discounts to both referrers and referees created a win-win scenario, driving participation.
2. Social Proof Builds Credibility:
   • Authentic customer reviews made the ads relatable and trustworthy, increasing engagement.
3. Targeted Ads Amplify Reach:
   • Precise audience targeting ensured the campaign reached users most likely to convert.
4. Continuous Optimization is Essential:
   • Regular performance tracking allowed for timely adjustments, maximizing campaign efficiency.

Conclusion

By combining a referral program with dual incentives and Instagram ads featuring real customer reviews, the meal kit delivery service successfully increased referrals by 40%. This case highlights the importance of leveraging social proof and incentives to drive customer acquisition. The campaign serves as a valuable example for businesses looking to grow through referral marketing and targeted social media advertising.