By creating a customer referral program, you elevate word-of-mouth marketing from being an afterthought to becoming your primary means of acquiring new customers.
To ensure consistent referrals, continuously encourage customers and provide them with enticing rewards that will motivate them to promote your business.
In order to assist you in starting, we have compiled a list of excellent ideas for referral programs to experiment with, as well as the most effective methods to promote your rewards.
Tips For A Successful Referral Program
Before we delve into our customers’ impressive referral programs, it is essential to ensure that you possess all the necessary tools for setting up your own referral program.
To begin, you must establish your incentive structure.
- Double-Sided Offer: both Advocate and Friend get a reward
- One-Sided Offer: only one person, either Advocate or Friend, gets a reward
When considering your referral program, you should also determine the referral reward for Advocates and Friends. The most frequently used referral rewards are:
- Loyalty points
- Cash back
- Coupons
- Store credit
- Free month (subscriptions)
- Gift cards
- Discount (10% off for you and 10% off for friend)
Referral Program Ideas
1. Offer service discounts or upgrades
One way to motivate your customers to seek referrals is by offering discounts on your services. These discounts can be applied to the service they have already utilized, their upcoming service, or an extra service that they typically wouldn’t pay for.
Below are a few examples of service discounts that you may consider offering:
- 15% off a house cleaning
- $20 towards lawn maintenance
- Free roof inspection and 10% off any necessary repairs
- $50 off the next electrical repair
- 10% off equipment for a garage door upgrade
When considering the discount pricing, make sure to calculate the anticipated profit from the new customer and ensure that the discount does not completely negate that profit.
2. Give gifts or cash rewards
If you have customers who will not be needing your services again in the near future, offering gift incentives can be an effective method to obtain referrals. Here are a few suggestions for gift incentives:
- Give a personalized gift that shows your most valued customers your appreciation. Choose a gift that speaks to their interests, like a gift card for a local restaurant, a sporting event ticket, or a deluxe tea and coffee set.
- Send a branded swag set with items that customers can use on a daily basis, like water bottles, notebooks, stationery, and fridge magnets.
- Offer prepaid debit cards of different sizes based on the value of the referral. For example, bringing a recurring customer should earn someone more than a one-time customer—and so should customers who book higher-priced services.
3. Give double-sided incentives
Social gifting, also known as a double-sided incentive, refers to a reward system that benefits both the customer who provided the referral and the new customer who was referred.
In addition to enticing new leads to choose your services, social gifting also encourages your existing customers to find you referrals.
Service discounts are most effective when used as mutually beneficial incentives. Your returning customer receives a favorable offer for their following service, while your new customer enjoys a reduced price for experiencing your exceptional service.
4. Run a referral contest
Referral contests generate enthusiasm through the incentive of a substantial reward for a limited number of customers who recommend your business.
First, select a valuable prize such as a complimentary house cleaning, $300 towards a landscaping project, or a $500 prepaid debit card, ensuring it falls within your small business budget and is a worthy expenditure. Next, establish a deadline to create a sense of urgency and encourage prompt action from individuals.
If you decide to hold your own contest, you have the option of including customers who refer others in a lucky draw for a chance to win your prize. In case you have a substantial customer pool, you can acknowledge the top two or three individuals who bring in the highest number of referrals.
5. Offer holiday-themed and seasonal incentives
To generate enthusiasm for your referral reward, connect it to a specific season or holiday. This naturally time-restricted promotion incentivizes customers to seek referrals more promptly.
Seasonal businesses have the opportunity to offer additional services at discounted rates by capitalizing on the changing weather. To illustrate, if your lawn care company faces difficulties in obtaining snow removal clients during the winter season, you could provide a 40% discount on your plowing service for every referral that results in success.
Examples of Referral Programs
We will demonstrate the actions taken by others in your field, the effective referral incentive systems specific to your industry, and various options for providing referral rewards.
Metromile — $25 Gift Card for Every Referred Friend Who Signs Up
Metromile, an auto insurance company, provides Advocates with a $25 gift card when a referred Friend signs up. Advocates can only join the program after logging into their accounts.
QuickBooks — Give 50%, Get $30
When a referred Friend gives QuickBooks a try for 60 days, Advocates receive $30 in Amazon cash from QuickBooks, an accounting software business.
Bonobos — Refer a Friend, Get 25% Off
Bonobos, a well-liked brand for men’s clothing, urges its customers to refer their friends, family members, or other individuals in their network and rewards them with a 25% discount on their entire product range.
Joie — Give $25, Get $25
Joie, a luxury women’s fashion brand, utilizes its “Give $25, Get $25” referral marketing program as a means of stimulating customer referrals and promoting the Joie brand through word-of-mouth marketing.
Flaviar — Get 50 Store Credits for Every Friend You Bring to the Club
Flaviar, a club specializing in fine spirits and whiskey, offers a referral program as part of their post-purchase flow for customers. Each successful referral entitles the customer Advocate to receive 50 store credits. Additionally, the individuals referred also receive 50 store credits, which they can immediately utilize upon joining the club.
Conclusion
If you want your referral program to be successful, you have to make it sound exciting.
You have many options for referral program ideas, as you can provide your customers with attractive incentives in various ways. The only way to determine the most effective idea is by implementing your preferred ones.
