In search of new customer referral program ideas for your service business? Here are five examples that work.
A customer referral program is a cheap and effective way to grow your service business. That’s because instead of paying for new leads and slowly converting them into paying customers, you’re using existing, happy clients to identify and convince new prospects for you.
“Don’t underestimate the power of brand exposure your referral program has—even if it doesn’t mean immediate conversions to won jobs,” says Rebecca Kapler, who manages Jobber’s referral program. “Your customers might refer you to someone who doesn’t need your services right now, but when they need that job done two weeks or two months from now, you’ll be top of mind as someone who’s been stamped with approval by their friend.”
The problem with relying on referrals is that most service businesses don’t have a formal program in place. They may simply ask clients to ‘spread the word’. If you do this, how can you tell if the program is even working?
If you want your customer referral program to consistently bring you new clients, you need an idea to drive it and a system to track it.
Read on to learn about five customer referral programs ideas from real home services businesses, and how to communicate these programs so they’re successful.
5 Customer Referral Program Ideas that Work
1. Offer a Mouthwatering Incentive
The most important aspect of a successful customer referral program is the reward.
Remember: you’re asking your customers to do you a favor. If you want them to actually refer their friends and family, you need to offer a reward that’s worth their time and effort.
The solution is to give customers an offer they simply cannot refuse, such as a substantial discount. For example, Emily Ann Mercer of Maid of Honour Cleaning offers a mammoth discount of 50%.
“We used to offer 10% off but found that wasn’t incentive enough for our clients to do anything,” explains Emily. “At 50% off, we get tons and tons of referrals that lead to recurring clients.”
Eric Rodgers, from Dreamscapes Property Services, takes a similar approach by offering two weeks of free service for every referral in the form of a gift certificate.
“The way we make it extra valuable is we make it transferable. They could apply it to their bill which they’ve already budgeted for, OR they can give it to a friend/family member who they know also has a need for our services. That has already generated one or two great leads and I am excited to see how it works in the long run!
The exact discount you offer will depend on the type of service and what you can afford.
The bottom line? Think big, and get people excited about your program
2. Give Customers the VIP Treatment
This referral program idea packs a double punch: you’ll get more new customers and earn more from your existing ones. Here’s how.
Instead of offering a discount for each referred client, offer your customers a premium service or VIP treatment if they bring in a referral.
The added benefit of this approach is that it may encourage customers to upgrade to the premium service once they realize how nice it is!
3. Turn Your Referral Program into a Game
Another approach is to gamify your referral program by offering loyalty points.
For example, for each successful referral, you can give a client 10 loyalty points. Customers can then redeem these points for a free service or bundle of services. For example, if you’re a lawn care business:
- 50 points may get a customer a free mow
- 100 points, a mow plus hedge trimming and mulching
- 150 points, all of the above plus weed control treatment
This works because it incentivizes customers to refer more than one friend. The more they refer, the more points they get—and the more business you get.
Did you know? Jobbber has a Referral Program!
Find out how you can participate and refer friends.Check it Out
4. Donate a Percentage of a Successful Referral to Charity
With this referral program idea, you partner with a local charity and donate money for every successful referral. For example, if a referral brings in $150 worth of business, you can agree to donate anywhere from 5-20% of that first fee.
There are four distinct benefits to this referral idea:
- You feel good because you’re giving back to the community
- It builds loyalty among existing customers and your wider community
- You get more business from new customers who want to see their dollars go towards a good cause
- The news of your initiative spreads, and you get free publicity
Before implementing this referral program, do a bit of research to find a charity or program that is important to your community. It could be a junior sports league or a food bank. Dave Moerman of Revive Washing re-invests 3% of his business’ profits into clean water initiatives around the world.
Not only is it good for the community, he says it’s great for drumming up interest and new clients for his window cleaning business.
5. Write a Referral Letter on your Customers’ Behalf
As great as referral programs are, not every client has the time or desire to tell everyone they know about you. That’s okay. With this strategy, you do the legwork for them.
Steve Roller, a former lawn care business owner, explains how he made this referral program work for him:
“Once you have customers, ask if they’re willing to help. You write a letter as if it’s from them. You mail it out to 30 of their closest (by proximity) neighbors—everyone on their street or around the block. It’s essentially them saying, ‘Hey, I love my lawn guy! You should give him a try.’ You give them a free mowing for everyone who signs up.”
This plan works because you’re using your customers’ voice to amplify your message and boost your credibility—all without asking them to lift a finger.
How to Promote your Referral Program
The success of your customer referral program depends on letting customers know about it. If you only rely on memory, you’ll likely forget. And each time you forget, you’re leaving business on the table.
Instead, build mentions of your referral program into your marketing and everyday business processes.
That’s precisely what Edward Ramsden of Enviro Masters Lawn Care did. “We put a reference to our referral program on everything the customer sees (invoices, door hangers, etc.),” explains Edward. “Not many customers cashed in on the $25 off offer. However, we got a decent amount of referrals. I think just keeping top-of-mind helps people refer.”
Here are all the places you can (and should) mention your referral program:
Bonus: Include a Tracking Mechanism
Finally, you need to track your referrals to see how your referral program is doing.
That way, you can make adjustments and either rev it up (if you are getting lots of new customers), or step back and try a different approach.
Here are two ways to track your referral program’s success:
- Create a custom field in your CRM (client relationship manager) called “Referred by”. Each time a new customer is referred, you can enter the referer source (ex: “Mrs. Jones” or “Neighborhood letter campaign.” Export your client list to a CSV on a regular cadence to see exactly how many new clients came from your referral program.
- Create a unique code or URL to share with your clients. You can put these unique codes (ex: “REFER2020” or www.businessname.com/referalprogram) on your postcards, business cards, or email marketing. When a new client books work and uses the code or link, you’ll know they came from your referral program.
Implementing your Customer Referral Campaign Idea
There’s no shortage of referral campaign ideas —from offering a mouthwatering incentive, and giving customers the royal treatment to donating to a charity and using current customers as social proof.
But an idea is precisely that: an idea.
Once you’ve chosen your idea and decided how to communicate it, it’s time for implementation.