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Design a referral system for a grocery app.
+2 votes
in Product Design by (33 points) | 1.4k views

3 Answers

+3 votes

Clarification questions

1. How many cities is the app located in? 5

2. Do we want to design the referral for all cities? We want to start by experimenting in 1 city

3. How many users does the app have? 30,000

Okay, I am assuming the goal of the referral program is to increase the user base of the app. Is there any other goal that you have in mind? No, go ahead.

Okay, I will start off by breaking down the components of a referral program, then look at the persona of our referrer and their needs. I am then going to list out some solutions that might fulfill our goals and address user needs. At the end we can evaluate these solutions.

So, a referral program has 4 primary components –

1.    Referral channels

2.     Referral incentives

3.     Budget

4.    Users

Let’s talk about our target Users first:

1.    For a grocery app, I am assuming that the age range of our users is between 25-40 and that they are working professionals who don’t want to spend time grocery shopping physically.

2.     They are tech savvy and are active on multiple online platforms and share things with their peers on these platforms.

3.     For the referral program, we should aim to target users who are cost-sensitive as well.

Some of the needs of our users are –

1.   They want to easily discover people they want to refer to

2.    The cost-sensitive user might want to avoid delivery fee

3.   Get free samples of things they have never tried

4.  Are fond of convenience and want faster delivery

5.    Want items to be delivered in fixed time slots

Now let’s explore some solutions that address these needs –

Referral channel

1.    Sync app with Facebook that shows friends living nearby and who are not using the app

2.  Apart from above, provide multiple referral channels like Whatsapp, Instagram, messaging etc. for e.g. provide option to share promotional image as a story.

3.   Include 1-click signup link in the referral message.

4.    To ensure that new users are actually ordering, make the referral applicable after the new user’s first order.

Referral Incentive


5.    The most straightforward incentive is to provide a referral bonus. This might be a huge money sink though. Instead, we could promise 1-hour delivery for the next order for every referral. Or we can send a sample gift bag for each referral.

Referral Budget

6.     We can run the program for a fixed number of days during which we expect to meet our target # of users or reach our budget limit.

7.    We can extend the program for 20% more time if our targets are not met or evaluate what went wrong.


We can create an A/B test to analyse what referral incentive and channel works best for our users.

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Thank you for such a great answer!
0 votes

what does the grocery app do?users can order groceries and have it delivered to homewhat is a referral system and why do we need it?need a way to grow new users in a inexpensive waywho are our users?busy …See more

by (14 points)
0 votes

Clarifying questionsUser group: Are we referring consumers or other grocers?Limitations: Are monetary rewards allowed? Or will I need to decide that?External factors: Where is the product in its lifecycle? Wil…See more

by (26 points)
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