Lucas Weaver
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Lucas Weaver

Marketing Strategist at Weaver Communication
Lucas Weaver is the founder of Weaver Communication and author of Explaining Digital Marketing.
Lucas Weaver
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tesla referral marketing strategy blog post

Walter Chen recently wrote an article in which he describes how Tesla achieved a 40 to 1 ROI on their Referral Marketing program for their electric cars.

In that article he described the following program that led to those successful results:

“When Tesla owners refer their friends, they get:

  • Automatic entry into the raffle for a Ludicrous P90D Model X, plus an additional entry with each referral they make
  • After 10 referrals: an invite to Tesla’s next unveiling event, like their recent Gigafactory opening
  • After 5 referrals: receive Tesla wheel rims
  • After 3 referrals: receive a Tesla Owners jacket
  • After 2 referrals: receive a Tesla duffel bag”

As well as an incentive in which new Tesla buyers who are referred by friends receive $1000 towards their purchase.

In this post, I’m going to help you adapt this strategy for your own referral marketing program and help you achieve your own fantastic ROI.

tesla owners jacket referral marketing strategy gift

Tesla Owner’s Jacket

Let’s first consider some numbers.

The average price of a Tesla is $70,000.

The duffle bag you get after two referrals is $150.

The owner’s jacket is $109.

The Tesla rims are $6,000.

And who knows how much the trip to the unveiling event would normally run you, but the P90D Model X Tesla runs around $134,000.

So by percentages, those referral gifts are .2%, .16%, 8.5%, and 190% respectively of the value of the average Tesla.

As you can see, since only one of thousands of Tesla drivers will receive the $134,000 car as a gift, Tesla comes out way ahead in the profit category from their referral gifts.

They also use the opportunity to build their brand with the gifts. They’re not just giving away gift cards, they’re giving away merchandise with their logo on it for their customers to strut around proudly.

The key is to build loyalty on both sides of the referral. Your current customer gets a gift they will actually enjoy, and your new customer sees how much your current customers mean to you, and wants to be a part of that club.

What can your business afford to give away?

A carpet cleaner could offer a customer a $25 Target gift card for a referral.

If you clean a large house’s carpets in an upscale neighborhood for $300, the $25 gift would be following along the lines of Tesla’s 8.5% referral gifts.

If you run a gym, it wouldn’t be difficult to give away a free branded duffle bag to your current members who refer their friends to your gym. Instead of giving them a month free, this gives value to your customers but doesn’t hurt your revenue. It also gives you the chance to get free advertising when they carry your duffle bag around town.

You could also offer a free gift to the new member, something like a free branded t-shirt wouldn’t hurt your bottom line too bad. Then they also have the incentive to refer a friend to get the duffle.

21 inch turbine wheels given as gift in tesla referral marketing program

Tesla Turbine Wheels

Businesses focused on a premium market strategy can offer more premium items like Tesla’s owner’s jacket.

Country clubs can offer upscale leather jackets, golf courses can offer premium golf bags, spas can give away robes.

Referral programs don’t have to be positioned as a “discount program.” The right way to position them is as customer appreciation, in which you are adding value for your customer.

A country club may not want to look like they’re matching the marketing strategy of Wal-Mart’s coupon matching, but what member would protest getting a brand new leather jacket for referring their friend?

Golf clubs can also provide referral bonuses that are extremely useful. Imagine getting a free pack of Pro-V One balls for every three guests you bring to play a round at your club.

Tesla’s program is brilliant because of the way that it cements the feeling of being in an exclusive “club.” If you’re willing to go out on a limb and advocate your favorite brand to your friends, chances are you’re passionate about, and possibly even identify with that brand.

By giving their customers branded high-quality merchandise for their referrals, Tesla is making customers feel even more appreciated for their loyalty, and they’re also making customers feel even more a part of the brand by giving them merchandise that is exclusively for referrers.

When planning your own referral marketing strategy like Tesla’s, don’t be afraid to get creative and experiment. It will be crucial to listen to feedback on your gifts, and judge the success of your program overall by tracking the ROI based on new customers generated.

Once you’ve got everything set up, you might just find yourself with a lead generation machine that continues to bring in new customers for years to come.

customer referral marketing bonus from tesla duffle bag

Tesla Duffle Bag