11 Best Referral Program Ideas (To Attract New Referrals)

The best referral program ideas can drastically improve the performance of your referral programs, so much so that they can be the difference between success and failure.

To ensure your business stays on the winning side, we've put this article together to help you out.

Included in this post are 11 easy-to-follow ideas on how to run a successful referral program. For each idea, we will explain why it works, how to implement it, and how to measure success.

Let's get into it.

(Note: The below ideas can give inspiration for your referral program campaigns. If you don’t have your referral program set up yet, you can use referral program software such as ReferralCandy to do that.)

11+ best referral program ideas that will get you more referrals

Let's go straight into the referral program ideas!

1. Have the basics figured out

The first of the referral marketing ideas is to have the basics figured out.

Make sure that:

1. Your product is high-quality, it offers great value for the price, and is visually appealing.
2. You set up referral incentives that people would actually like. While a 10% discount may seem like a good idea, it amounts to next to nothing when your products cost less than $20.
3. You keep an eye on your referral rates. If you've created (what you think) is a great incentive, yet nobody is taking you up on your offer, then you'll want to rethink your referral program.
4. Find a way to tell everyone about your referral program in a way that actually works. Having a cute little pop-up may not be enough, and neither will your half-assed email about it.

These basics serve as a foundation for the next ideas!

Why it works: Without the basics in good shape, the other ideas may struggle to succeed.‍

How to do it: Make sure your product is high-quality, you have referral incentives customers actually like, you follow statistics, and you use the right outreach methods.

How to measure its success: ‍Follow the overall performance of your referral program. If the metrics are down, there may be a chance your basics are lacking.

Campaign duration: All year round

2. Set up a referral incentive for customers

So, which referral incentives work best?

Here at ReferralCandy, we generally recommend using two-sided incentives.

Rather than simply rewarding your newly referred customers as a one-sided incentive, we've found it's best also to reward your loyal referring customers, just as a two-sided incentive would. That way, not only will your new customers feel great about their decision to do business with your brand, but your loyal existing customers will surely feel appreciated as well.

Here is what we recommend in more detail:

• If your advocates are likely to make repeat purchases, give discounts to encourage them.
• If your product costs more than $100, a flat discount is usually more enticing ($500 off a $2,000 laptop)
• If your product costs less than $100, a percentage discount is usually better ($10 off a $50 t-shirt is better phrased as 20% off)
• If your advocates are unlikely to make repeat purchases, give cash.
• If you're doing preorders, consider giving cash discounts on the advocates' existing preorders.
• Remember to focus on your customers' interests and motivations.

Why it works: Effective referral incentives ensure that customers are motivated to recommend your referral program to their friends.‍

How to do it: Test out the different variations we outlined above. This will help you decide what incentive works best for your specific situation.

How to measure its success: ‍From your referral program software, follow the conversion rate. How many customers register for your referral program based on the number of emails you send? If the conversion rate is low, your referral incentive may be lacking.

Campaign duration: All year round

Learn more: How To Set Up Your Referral Program's Incentives (With 12+ Examples!)

3. Take advantage of email marketing

Email marketing is one of your business's most powerful marketing strategies. For every $1 spent on email marketing, businesses receive, on average, an ROI of between $36 and $40.

That sounds like a pretty handy little earner, am I right?

Simply by sending your customers a friendly reminder about your products and services, upcoming sales, or social media campaign, you're tapping into a stupid-easy way to keep them engaged with your brand.

And perhaps best of all, it encourages customers to engage in your refer-a-friend and referral programs.

So, how can you improve your emails? There are broadly 6 things that you need to be mindful of.

1. Focus on the subject line
2. Keep the email simple
3. Make your call-to-action impossible to ignore
4. Emphasize the motivation for purchase
5. Highlight the benefit to Friend AND Advocate
6. Include any additional conditions for the referral

Why it works‍: Email marketing has been proven to be a high ROI activity, no matter what your industry is. It's also relatively easy to implement when following the right steps.

How to do it: Follow the above 6 things we outlined. A/B test different versions to find what works best for your brand.

How to measure its success: ‍Email marketing metrics, such as open rate, reply rate, click-through rate, and actual conversions, act as a measure of success.

Campaign duration: All year round

Learn more: How To Write Great Emails Asking For Referrals

4. Give store credit, cash, or discount

A business gifting its existing and newly referred customers with credit, cash, or discounted products is a referral program strategy that isn't likely to go away any time soon.

Simply because it works and has been proven to do so again and again.

Take Honeylove here, for example:

Honeylove refer a friend program is based around a two-side incentive: a simple give 20% and get $20. All the referred customer has to do is fill out the form, and both parties will be rewarded with a very tidy discount on future purchases.

Why it works: As with all the marketing ideas recommended throughout this post, rewarding both the existing customer and the newly acquired customer is a must. The best way to do this is to match the incentives for both customers. An incentive, as small as a $5-10 discount, for both customers is often enough to encourage them to sign onto your referral program.‍

How to do it: It's super simple: a referring customer refers a friend of theirs to your business. In return, they are rewarded with an attractive incentive like store credit, a cash card, or a percentage discount on their next purchase. And on the other hand, the newly acquired customer also enjoys a similar incentive, something that rewards them for doing business with your brand.‍

How to measure its success: As with any marketing strategy, the success of this referral program is dependent on ROI. To ensure your investment in this strategy is worth your while, balancing the investment and return is essential. With that in mind, offer incentives that motivate your customers to participate in the program. Incentives that aren't too large, hurt your bottom line and cause the program to be a money pit.‍

Campaign duration: 30 days, all year round, seasonal

5. Offer a free surprise gift

Most customers prefer to know exactly what reward they will receive when making a referral.

However, some customer bases quite enjoy surprise rewards.

For example, perhaps your product line is trend-based, meaning items come in and out of demand at a high frequency. This may cause excess stock lying about that's not as easy to shift as it once was at the spike of a trend.

This is where surprise gifting can work well.

Use these largely under-purchased and excess products to reward your referring customers. Sure, the trend may be over but it's doubtful anybody is going to argue with freebies.

Or, perhaps your business is a services-based brand. A service-based mystery box may just work to entice your customers to create a referral opportunity for you.

For example, see how Nuki does this:

They promise the referrer 'exciting rewards' as a thank you, making it seem more mysterious.

Sounds intriguing, right?

Why it works: Surprise gifting works on your customer's anticipation levels. It keeps them excited and hyped about your products and services. And as long as the reward is worthy of their anticipation, they are sure to refer again and again.‍

How to do it: Hype, hype, hype. To ensure the success of this type of referral program campaign you must get people excited about the idea of receiving some sort of out-of-this-world reward.‍

How to measure its success: Basically watch your ROI. How much money are you spending on the mysteries you are rewarding your referral program participants? If the return is outweighed by the cost of the reward and marketing efforts, perhaps it's time for a new strategy.‍

Campaign duration: All year round

6. Upgrade product or service

Rewarding your loyal customers with product or service upgrades is a great way to further bolster their loyalty to your business.

Let's say, for example, your business offers SaaS services (software as a service). Through your refer-a-friend program, you reward a successful referral with an upgrade to a premium package or free limited access to premium features. The availability of such features can then be announced by using in-app messaging tools.

Rewards such as these won't cost your business anything but are extremely effective in acquiring new customers while keeping your existing and referring customers very happy.

Take Evernote's refer a friend campaign, for example.

Their referral program rewards every successful referral from an existing customer with points. These points can then be spent to upgrade their service to Evernote Premium, an upgraded version of the software that has many benefits over the free version.

To make customer referrals super easy, the Evernote team has included three different ways that referrals can occur. The first is via email, the second is a link posted on social media, and the third is a simple copy-and-paste link that can be shared on just about any platform, including Slack, Twitter, or LinkedIn.

Why it works: It incentivises existing customers to refer friends through three different methods. A software-based upgrade does not cost the business any extra money to run the referral campaign.‍

How to do it: This type of referral program works best for tiered or software-based products or services. Decide on a reward for your referring customers, ideally, something that isn't a huge expense, and, if possible, make it super easy to refer by adding different methods for your customers to invite their friends.‍

How to measure its success: Pay close attention to 1) how many referral links are used and 2) how many of the referring customers actually sign up for the upgrade. Though it may not cost you much to offer a temporary upgrade, your referral program may be falling flat if it's not actually enticing enough.‍

Campaign Duration: All year round

7. Run a contest or sweepstakes

When running a contest or sweepstake, use rewards that are in high demand, something that will make it worth their while competing for.

A good idea here is to also offer prizes for those that don't come in the first place. This will help drive even more referrals as contestants feel they have even more chances to win a prize. Secondary prizes don't have to be big; a simple discount will often do the trick.

For example, check out Bagg's sweepstakes referral program.

Contestants simply fill out Bagg's 'Refer a Friend' form and refer at least one friend to be automatically entered. This puts them in the running to win a special offer of $25 dollars off a $100 purchase or $50 dollars off a $150 purchase.

Contest-based referral programs are best run for a short period, a period of around a month works best. A time period such as this keeps contestants enthused enough to enter but not too disappointed if they lose.

If they didn't win this time around, they can always try their luck next month.

Why It Works: This referral marketing strategy leverages the competitive nature of all of us and directs it towards driving new customers to your business.‍

How To Do It: When a successful referral is obtained, enter the referrer into the running to win. High-demand rewards work best, the latest and greatest tech gadget or a trip away should do the trick. Remember to reward contestants that come in second, third, and fourth place with rewards as well. This will only increase their chances of winning and your chances of acquiring new referrals.‍

How To Measure Its Success: This strategy is all about consistently acquiring new referrals from your existing customers each month. To measure if this is the case, record the details of all entered contestants and compare the number of entrants over time.‍

Campaign Duration: 30 days

8. Launch a seasonal campaign

Seasonal referral programs work similarly to contests or sweepstake campaigns as they leverage hype and even viral growth to drive success.

Whether it be more traditional holidays like Christmas or New Year, events earlier in the year like Valentine's Day or St. Patrick's Day, or even more left-of-field events like World Environment Day or World Peace Day, there are a ton to choose from.

And whichever promotional period or event you land upon, simply ensure the grand prize at the end of the campaign is alluring enough to entrants. Your contestants can easily be turned off by a prize they don't deem worthy of filling out an application for.

To ensure the success of a referral campaign of this type, offering a worthy reward, one that truly represents the spirit behind a holiday or event, is a must.

For example, take a look at Rift's Christmas refer a friend campaign.

Over the holiday season, Rift offered their customers a chance to win £1,000 when they successfully referred any of their colleagues, family, or friends.

That's a pretty handy little Christmas gift for whoever was lucky enough to snag the prize, that's for damn sure!

Why it works: Seasonal referral campaigns harness the hype and excitement of a holiday or promotional period and use it to drive referrals to your business.‍

How to do it: Start promoting the campaign prior to the seasonal event to ensure people know when it's time to enter the contest. Be sure to use gifts that align with the spirit of the season; this will help motivate them to refer as many customers as they can to your brand.‍

How to measure its success: One of the best things about seasonal campaigns is they happen once a year every year, which makes it fairly easy to measure its success. Simply look back at the referrals you received in years previous and compare them to the time period in which you just held your first seasonal campaign.‍

Campaign duration: Seasonal

9. Donate to a worthy charity

Not all customer referral program ideas have to be based on discounts or product upgrades. In fact, aligning your brand with a social cause, one that is important to your customer base, can be the perfect solution to boosting your referral marketing outreach.

Naturally, people love getting behind a good cause, particularly one that aligns with their moral compasses. With that in mind, leveraging word of mouth is the best way to get the word out about your socially aligned customer referral program.

Take the software company Vena, here for example:

Vena donates an incredibly generous $2,000 to a charity of their customer's choice. They are aligned with charities such as American Red Cross, WWF, UNICEF, Doctors Without Borders, and even the Wounded Warrior Project.

Why it works: What does your business stand for? This is a question that is becoming more and more important to many consumers. If you can align yourself with a worthy cause, one that is shared by your customer base, you are well on your way to making this referral marketing strategy an absolute winner for your business.‍

How to do it: Take a good look at your brand and what it means to your customers. Does your business stand behind anything of worth? Does it support the environment, local people, or other socially aligned causes? If so, leverage this to your advantage. Make every referral count towards something that really inspires your customer base to support your business and this worthy cause of yours.‍

How to measure its success: Social media is a great way to spread the word about a worthy cause. Take advantage of this and get the word out that your customer referral program is all set to help something or someone in need. Sure ROI is important, but also pay attention to how well your social media posts are performing. People who aren't signing onto your customer referral program are still being exposed to your brand, and perhaps best of all, are seeing it in a positive light thanks to your brand new social cause.‍

Campaign duration: 30 days, all year round, seasonal

10. Focus on increasing your referral rates

This idea almost acts as a summary of the previous steps.

For those who aren't sure, referral rates are simply the volume of referred purchases as a percentage of total purchases.

Here's a super simple example.

Let's say your brand achieves a total of 100 purchases over a period of a few days, the purchases being made with the help of a 3 percent referral rate. That means that for every 100 purchases made with your brand, 3 of these were from referred customers.

Three percent may not sound like much, but I wouldn't be too disappointed if I were you. The fact is the average global referral rate is about 2.3 percent.

With that in mind, basically, the higher you can increase your referral rate, the more sales you'll make, and the greater your brand's revenue.

It's that simple.

Here are things you can do:

• Invite past customers to join your referral program
• Allow non-customers to benefit from referring friends
• Use two-sided rather than one-sided incentives
• Be generous with the friend offer
• Feature your referral program prominently on all your touchpoints
• Communicate the friend offer clearly to participants and referred friends
• Keep your referral program top-of-mind with timely emails
• Communicate the conditions of your referral reward clearly

Why it works: ‍The higher your referral rate, the better ROI your referral program gets.

How to do it: Act on the action items we listed above. Encourage customers to join, use two-sided incentives, communicate referral reward conditions clearly, and so on.‍

How to measure its success: Follow your referral conversion rate. Do you know what percentage of the customers you present your referral program to, actually join? Follow this metric, it’s available on referral program software, such as ReferralCandy.

Campaign duration: 30 days, all year round, seasonal

Learn more: 8 Best Things You Can Do to Boost Your Referral Rates and Get More Sales

11. Bonus: Try affiliate programs

Another incredibly powerful way to boost your referrals is to establish an affiliate program. And although affiliate programs aren't technically referral programs, they do work on very similar premises.

Here's how they work.

Instead of taking advantage of your current customer base, affiliate programs often use marketers, bloggers, influencers, and other similar partners to drive customers to do business with your brand. These partners use their influence, hence the name influencer, to promote your products and services to audiences they already have through social media posts, publishing content, or PR.

The advantage to this?

It saves you from having to put in work to build audiences or, maybe worse and consequently more time-consuming, figuring out a way to find exposure equal to this level. Instead of this, an affiliate marketing strategy leverages other people's followers, and followers that trust their every word and direct that trust towards your brand.

It's basically targeted marketing on steroids.

Take a look at Recovery For Athletes here for example.

Recovery For Athletes specializes in selling and distributing quality athletic, therapeutic, and recovery equipment. They, like many other online shops, offer an affiliate program that not only makes them a hefty increase in their brand exposure but also drives future sales toward their own online store.

Genius!

Why it works: An audience that is interested in your brand's products or services isn't always easy to find, but that's where affiliate marketing really shines. It exposes consumers that are already well known to be interested in your brand's product or service niche, to your business.‍

How to do it: Find affiliates that are well-trusted by their followers, and followers that are likely to be interested in your products and services. Use this form of targeted marketing to extend your business' reach and boost your bottom line.

How to measure its success: Customers that are referred to your business usually come through an affiliate's website or other platforms like YouTube or Instagram. Normally, affiliates use a unique link that is assigned to them through an affiliate program. This link is assigned to customers, usually in the form of cookies, and allows easy monitoring of how many referrals are coming in and where they are coming from.

Campaign duration: All year round

Final Thoughts

There's no doubt, that coming up with referral program ideas can be tough at times.

And finding a program that aligns with your business model and promotes or represents your products and services in the right light can be even tougher.

I’m certain, though, that the referral marketing ideas I’ve mentioned within this post should work as inspiration to get your very own referral program off the ground. And the examples mentioned should certainly give you the confidence needed to make your referral program an absolute success.

Here are a couple of interesting articles that we think might help: 

• 10+ Top Ecommerce Referral Programs to Learn From
• Referral Program Benchmarks: What's A Good Referral Rate?
• The Ultimate Referral Widget Guide to Improve Referrals
• Why We Use Referral Links at ReferralCandy (and the Secret Features You Can Use With It!)
• What We Learned From Analyzing 3,000+ Referral Programs For Ecommerce Brands