CAFU sought sustainable growth strategies to reduce Customer Acquisition Costs while reducing fraud experienced in previous referral program.
Drawing inspiration from successful referral programs like Dropbox and Uber, CAFU aimed to revamp its referral program to achieve more efficient and viral growth.
Drawing inspiration from successful referral programs like Dropbox and Uber, CAFU aimed to revamp its referral program to achieve more efficient and viral growth.
MY ROLE
My role as Product Designer was to redefine the in-app experience behind CAFU’s second iteration of their Referral Program.
MY TEAM
Senior PM
Frontend Dev
Backend Dev
Frontend Dev
Backend Dev
TLDR;
• Over 1.5k new customers through referrals.
• 9% retention improvement on non-referred users.
• 70% referral traffic through improved home screen featured.
• New touchpoints explored and new goal of reduced referral costs identified.
PROBLEM?
CAFU's initial Referral Program was plagued with issues from fraud to an overcomplicated experience.Building on past learnings, the new referral program featured significant enhancements:
• Fraud prevention measures included stringent eligibility rules and referral caps.
• Increased touch points across the app, ensuring easy access to the referral program.
• Enhanced communication emphasized the monetary incentives for users.
LEARNINGS
A few learnings were taken from Referrals 1.0. After a short audit it was easy to identify some problem areas:
• There was only 1 entry point for the referral program, making it more difficult for a customer to invite a friend.
• The only strategy to avoid fraud and increase retention was giving the incentive across 2 orders, but the only check made for new users was to check the user ID.
• Lacked incentive to encourage customers to continue referring. Low retention.
DYNAMIC CONTENT
The primary referrals screen was approached from a dynamic perspective. So how can it can scaleable and flexible enough in order to accommodate new users, returning users and retained customers?
Three customer types are identified and specific content is delivered depending on the customer.
New Customer vs Retained Customer views
MESSAGING
SELF-INTERESTED VS ALTRUISTIC VS COMBINED
The approach to messaging was focused around what kind of impact different messaging had on a customer's desire to refer a friend.
Further testing is required for more definitive results, however early indicators suggest both altruistic and combined approaches are performing better, albeit similarly. Self-interest appears to be the least effective.
Self interested (left), Altruistic (center), Combined (right)
CUSTOMER LIFECYCLE
In order to target customers in a more strategic way, the customer lifecycle was mapped out and relevant touch points identified.
METRICS
NUMBER OF NEW CUSTOMERS
The referral program successfully acquired over 1.5k new customers, exceeding the quarterly goal. Additionally, it achieved a peak of 708 new users in a single month, demonstrating its effectiveness in driving sustainable customer acquisition.
USER RETENTION FROM REFERRAL PROGRAM
The case study mentions that the referral program showed a better retention rate than 9% of non-referral users in the second month. This indicates that users acquired through referrals are more likely to continue using the CAFU app over time, highlighting the program's impact on user retention.
COST OF ACQUISITION PER CUSTOMER
The referral program achieved a reduced cost of acquisition, with each user acquired through referrals costing 59 AED, which is 40% less than main paid media channels. However, the next steps include further reducing the cost to 40 AED per user or even less to maintain growth momentum.