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5 Customer Referral Ideas For Any Business

Jun 18, 2020 12:03:40 PM

One of the easiest and most effective ways to acquire new customers is through referrals.

Also known as referral marketing, it means promoting your products and services to new customers through recommendations.

This recommendations are done by your existing customers, loyal customers, and brand advocates. Basically, it is done through word-of-mouth, which is also known as the most effective form of marketing.

This study published by Jay Baer shows that 92% of consumers trust recommendations from people they know directly – as opposed to an advertisement.

definition of referral marketing by Eber

How will a referral program help me?

You can’t go wrong with customers raving about you to their friends.

When you cultivate a strong base of loyal customers, they are very likely to bring you up and suggest your brand to their friends and family.

The more people hear about your brand, the more familiar they become with it, and the more likely they are to buy from you.

On average, it takes about five to seven impressions for people to remember your brand.

Just think of how many times you have suggested a product, a store, or a brand to your friends because you’re a die hard fan of the brand.

But won’t customers do it willingly? Why do I need a referral program?

It is likely that customers will make referrals willingly. But it is a bit idealistic to think that all your customers will bring in referrals just because they have had a good experience with you.

They need something more. A little nudge, a little motivation, a little push in the right direction.

Giving your customers a bit of an incentive can increase the chances of sending valuable prospects your way.

All these will save you a lot in terms of your marketing and advertising budget.

If that isn’t convincing enough, 78% of B2B marketers say that referral programs generate good or excellent leads.

So here are some referral program ideas you can make use of:


Host a giveaway or a lucky draw contest for customers who refer their friends.

Set a rule where customers will qualify for a certain freebie or mystery gift if they provide you with at least five leads.

To maintain the quality of the leads, you can tweak it such that your customer stands a chance to enter only if their referral makes an appointment or makes a purchase – depending on the nature of your business.

The gift of a gift

Social gifting is a better, more effective way of getting referrals. It focuses on quality instead of quantity.

Instead of getting a certain number of emails, social gifting rewards both customers and their referrals.

For example, your customers get $10 off if a friend registers an account on your website or buys something from you. The friend gets $15 off as a first-time customer. And the cycle repeats.

This way, you are able to get repeat sales from both your customer and their referral.

However, you can also design your social gifting to reward only the referrals – if you like.

Source: Buyapowa

You know who does this really well? Tesla.

First of all, Tesla rewards its customers by giving them an exclusive invite to tour the Tesla factory, attend a party, and a chance to purchase a car that is not yet available to the public.

As for referrals, each Tesla owner can give their friends up $1000 in discounts!

Tesla also made this announcement in 2019:

“You and anyone using your referral code to buy a Tesla will receive 7,500 free Supercharger kms! On May 28, this will revert back to 1,500 kms.

Each referral now also gives you five chances to win a Founders Series Model Y or Roadster supercar! Tesla owners who already have free Supercharging get ten chances to win.”

Tiered rewards

This is another way to encourage customers to make quality referrals.

You can design a referral program where customers get upgraded in a tiered program each time they hit a certain referral mark.

To maintain the quality of referrals, customers only get upgraded once their referral code is used to purchase something.

Each tier of the program comes with its own perks and rewards for the existing customer. It can unlock new features too.

Evernote, for example, awards points to customers whenever they make a referral. These points can be accumulated and be redeemed for Evernote’s premium features.

Did you know?

Evernote has over 100 million users, 13 million of which were referred by other users.

Customised Referrer Rewards

Photo by  Andrea Piacquadio from  Pexels

You can really motivate your customers to drive referrals in many, creative ways.

You just have to make sure to provide enough incentive for your existing customers to pick up their phones and call their friends – and for their friends to accept that invitation.

Dine in with a friend and get free dessert.

Bring a friend and enjoy 20% off your total bill.

Buy 3 tickets for the price of 2.

The possibilities are endless.

For example, take Dropbox. Dropbox offered an extra 500 MB of free storage space to customers who makes the referral and the referral.

This helped Dropbox grow their membership by 60% back in 2010.

Or let’s take a neighbourhood bar, for a very simple example.

A table of four ladies get a free bottle of wine.

Not only does this increase referrals, it also makes the bar look full and happening – which will attract other customers to enter.

Are you ready to start a referral program? Need some advice on how to start? Reach out to us here.

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