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American Express’s referral program, known as “Member-Get-Member†(MGM) is nothing new, of course. The Referral Program started in 2011 as an easy way for members to refer their friends to AmEx and get rewarded for doing so.
But recently it has seen surprising success with younger age groups. Some 79% of referrals through the program represent the Millennial or Gen Z age groups – and a statistic like this can hardly be a coincidence.
MGM also became AmEx’s second largest consumer acquisition channel, just behind partner channels. We spoke with Jean Castanon, Vice President of Product Recommendation Marketing at AmEx, to find out what is behind the program’s success.
The program in a nutshell. “At the center of the program,†he said, “is a short referral link that members can share with their friends, and when one person is approved for a card, both are rewarded. Here is the program in a few words.
In recent years, AmEx has focused on building this program as an evolving program. “We started to approach this as a product,†Castanon said. “I lead a team of product owners and designers who optimize and enable the growth of the program. It has been extremely successful.
Personalization and relevance. AmEx has a range of acquisition channels, both digital and traditional, such as paid search, display, affiliate channels, and in some markets direct mail. “What made the program so successful is that it is digitally native,†Castanon said. “Our mobile application now generates the majority of referrals. We do several things from a personalization point of view. We want to be in the right place with the right message for the right person, so there is an aspect of personalization.
Personalization is AI-powered, based on data collected in strict compliance with data protection and privacy principles. “There is also an aspect around the relevance of the offer. We provide more relevant incentives for certain cardholders to refer a friend. These incentives can be product-based – for example, a Gold Card member may be offered a higher number of reward points – but also contextual. “During the pandemic, we ran a successful campaign where we offered cardholders and prospects discounts on home furnishings.†The rewards component is fully automated.
Sharing the link. Cardholders use social media, email, and SMS to share the short referral link, preferably with family and friends. “Historically there has been a lot of word of mouth with people recommending certain products, but here we provide additional value to our customers for doing so. There has to be an exchange of value on both sides for this to be successful, and it has to be easy to share. As soon as you start to make it complex to share, it becomes difficult to make it evolve. “
The link, however, cannot be passed from person to person. Once a referral is approved for membership, they get their own referral link to share. “There are certain limits on the number of points that can be earned in a calendar year, for obvious reasons. We are very clear that this should be shared with friends and family, not used to spam people.
Significant value. A typical reward can range from 10,000 to 30,000 points. “It can even go higher for certain products and customers. This is one of the easiest ways for customers to actually increase their points balance. But what has boosted the program is being able to offer richer and more relevant incentives to certain clients. “
Why we care This is a set of simple and clear lessons on how to successfully market a referral program – and it would surely work for loyalty programs and other programs, too. First, there must be an exchange of value, in this case a meaningful exchange of value. Second, the exchange of value should be personalized and, if possible, made directly relevant to the target customers. Third, keep it simple – don’t fill out a form or go to other channels. Finally, do it on mobile, because that’s where the people are.
About the Author
Kim Davis is the Editorial Director of MarTech. Born in London but New York for more than two decades, Kim started covering enterprise software ten years ago. His experience spans SaaS for the enterprise, city planning based on digital advertising data and SaaS applications, digital technology and data in the marketing space. He first wrote about marketing technology as the editor of The Hub at Haymarket, a dedicated marketing technology website, which later became a channel for the established direct marketing brand DMN. Kim joined DMN proper in 2016, as Editor-in-Chief, becoming Editor-in-Chief, then Editor-in-Chief, a position he held until January 2020. Prior to working in tech journalism, Kim was an editor in deputy chief of a hyper-local New York Times newspaper. site, The Local: East Village, and previously worked as an editor for a college publication and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog and has been an occasional guest contributor to Eater.
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