Getting your new leads from existing customers could be the smartest business decision you can make. Aside from streamlining and reducing the cost of the customer acquisition process, you also get the chance to show your loyal customers what they like about your business, making them come back for more.
Here, I break down 8 referral program ideas that are guaranteed to create buzz around your business and generate viable leads, all while making the referral process easier for you to manage.
Table of Contents
1. Good Old Cash Rewards
Cash is a universally enticing incentive; it’s rare to find a referral program based on cash that doesn’t do what it’s meant to, especially if the number is good enough.
Discounts are a good way to offer cash for referrals because most existing customers would rather save money getting the product or service they like. You can also offer prepaid Visa or Amazon gift cards or even straight-up cash transfers, but these are usually better suited to large business models.
To create a successful referral program, scour similar businesses, whether local or online, to see how much they offer for referrals and compete with them.
That said, you’ll want to make sure the amount you’re offering doesn’t interfere with your business’ health and profitability. After all, generating leads is no use if you can’t keep the lights on.
Example
PayPal offers referring customers $10 for each new friend who joins using a referral link and the new customer $10 for the first $5 sent or received within 30 days.
2. Give Your Customers an Upgrade
Sometimes, a customer wants to keep their expenses low, so they forgo certain “luxuries” in the form of opting for the lowest tier of a service. This doesn’t necessarily mean they aren’t interested in the better features; they’re just unwilling to pay for them.
You can offer upgrades, such as premium subscriptions to your services, access to specific gated features, or early sneak peeks at future releases, as a few referral program ideas for rewards.
This marketing strategy allows you to reward your loyal customers with a more refined experience while also giving them a taste of what they’re missing.
However, you should be super careful not to default their subscriptions to the premium service without their overt consent after the referral incentives are done. If you do, you run the risk of upsetting your customers enough for them to cancel their business with you.
Example
YouTube has an ongoing promotion where you can receive credit equal to the fees for a one-month Premium subscription if you refer a friend to the premium program using your referral link.
3. Create a Point System for Multiple Referrals
There’s always a possibility that one of your existing customers will bring in multiple referred customers. This is especially common in B2B services, where multiple businesses could be interested in working with you after being referred by a fellow professional.
In these cases, you can create a referral program that relies on stackable points for bigger rewards. If several people use the same referral link, the person sending them to you will have their points multiplied, unlocking new gifts or upgrades.
When you and your marketing and sales teams put together a system like that, try to make the higher reward tiers more lucrative so the pitch sounds worth it.
4. Use Social Gifting
Putting together a solid referral marketing program can also mean giving your referred customers a “welcome aboard” gift alongside the existing customer’s reward.
This concept of mutual benefit is known as “social gifting,” where your referral program creates an extra incentive for the referred customer to sign up because they will gain something from it.
This kind of program also generates a lot of good publicity, putting your business on the map when it comes to customer referral program examples that understand the customer’s psychology.
The rewards don’t have to be identical, but you probably should prioritize the existing customer’s gift. That’s because even the most satisfied customers need a little nudge to bring in customer referrals.
Example
LinkedIn ran a limited-time promotion in which customers could “gift” two months of the Premium subscription to anyone who used their referral link.
5. Run a Contest/Sweepstakes for Big Rewards
Having a referral program with discounts and upgrades as rewards is perfectly adequate. However, if you want to spice things up, maybe a contest with a big reward is what your business needs.
The reward for a “most referrals made” contest could be anything of value, from a household appliance to a romantic dinner for two!
You can also choose to create a sweepstakes for your largest referrers to even out the playing field a bit. Just make sure the winner selection process is fair and unbiased to maintain the trust of your happy customers.
Example
In 2020, Morning Brew, a newsletter company, ran a contest in which a reader who shared a referral link and someone who used it would win a MacBook Pro.
6. Entice Your Customers With Mystery Gifts
You can create a lot of intrigue around your business if your referral program has an air of mystery. This, of course, doesn’t mean you need to be cryptic and keep everything under wraps, but it pays to make the potential rewards sound exciting.
This element doesn’t have to be the center of your referral program, but it can be a fun supplement to the existing rewards.
The gifts can range from extra discounts to upgrades and maybe even physical gifts like swag kits that carry your brand’s logo. Aside from being a nice gesture, your customers can also show their brand loyalty thanks to your marketing expertise!
Example
This isn’t a current program, but Robinhood, a stock-trading app, used to offer surprise stock as a referral gift to both the referrer and the referred customer. They currently allow options to choose from.
7. Create Themed and Seasonal Campaigns
Seasonal and themed campaigns are an amazing strategy that you should make use of within your marketing efforts. They’re not only fun, exciting, and easy to integrate, but they also come with the pretty helpful feature of being time-limited by design.
If your business has a seasonal element to it, go ahead and hype it up whenever you can. For instance, if you’re an educational service, make the referral program part of your “Back-to-School” promos.
The same goes for more traditional holidays, like Christmas and New Year’s Day. You can push a boost in the referral program rewards around the beginning of December to end with New Year’s Eve.
This is also a great tie-in with the social gifting element of referral programs, as people will feel like they’re doing something nice for their friends and family by spreading your referral links around.
Example
A crypto-trading platform called MetalPay ran a seasonal referral program with mutual rewards back in 2018.
8. Make the Gift a Charitable Donation
Lastly, to round up our breakdown of referral program ideas, you can offer your customers the option of making a charitable donation on their behalf every time they refer someone to your business.
This choice is getting more popular now as people want to believe they have a positive impact on the world around them, even if it’s just by sharing a link.
That said, it’s better to leave this as an option, not mandatory, so even people who aren’t charitably inclined or don’t agree with your choice of charity can still partake in your referral program.
Example
A Canadian software company called CoLab ran a referral program in 2021 that offered a referral gift + $25 to charity.
Making the Biggest Impact With Your Referral Marketing Campaign
Now that you have an idea of how to create buzz, here are some solid strategies I like to implement when designing an impactful referral program.
Know What Your Customers Want
Each business has a wildly different customer base, and each comes with its needs and desires. Your marketing and sales departments should pin down the kind of incentive that would work with your customers to act as a base for a successful referral program.
Your loyal customers might not be interested in referral discounts. Instead, they might respond better to a swag kit or a free session. Similarly, your referred newcomers could be interested in an extra free month of your services once they commit to a subscription or, again, a good old cash reward.
If you’re working on a smaller scale, you can still figure out what your customers want through social media posts and polls. That way, you’re getting a feel for the kinds of rewards to offer that’ll get them involved and ready for action!
Use Every Method Available to Reach Your Audience
Your referral marketing efforts can only be crowned with success if you meet your customers where they are. That means the ancient referral program buried in the back of your website won’t cut it!
Let people know about the program, what you’re offering, and how to get involved in every way possible. To increase referral traffic, create social media campaigns, email outreach, and even physical handouts like flyers or a referral card (those usually work for brick-and-mortar businesses).
Spend money and effort in letting people know what perks await them if they partake in the program because most people likely would if they knew about it.
You don’t have to be a marketing genius to come up with successful referral program ideas and a plan from scratch, either. Just use one of the many customer referral templates available online and start building your program.
Gather Feedback About Your Referral Program
After you’re done with the first wave of your program, ask your clientele what they think about it. Is it tailored to their needs? Are the rewards worth the effort? Do they have any referral program ideas for how to improve it?
You can also ask for Yelp or Google Reviews to let people know about your business. Just keep in mind that this should be done separately from the referral program and its rewards, as most websites ban paid reviews.
Need Help Creating Your Perfect Referral Program?
Successful referral marketing doesn’t happen in a vacuum. You need to have a clear idea of the customers you’re trying to reach and then do as much as you can to give them what they want out of this collaboration.
If you’re ready to talk about the kind of referral program that fits your business needs, book a call with me! You can also contact Vivian Agency for more information.
