Awesome Referral Program Ideas for Every Kind of Small Businesses.
Welcome to the ultimate list of referral program ideas for small businesses. Here at GrowThat, we love small businesses. And we happen to think that for most small, brick and mortar businesses, referral programs are the best, most cost-effective way to gain new customers and grow your business.
In fact, our whole goal is to help small businesses get more customers and increase sales by running an automated referral program. So it only makes sense that we publish this extensive list of referral program ideas for small business.
Here’s how this article works (in case you wanna skip around 😉 )…
- First, we’ll start by breaking down how to create a referral program,
- Then we’ll break down what makes a good referral program.
- Finally, we’ll go into a full list of referral program ideas – broken down by type of business, from coffee shops to hair salons, ice cream shops, and more!
To create a referral program you need these things:
- A way for customers to easily refer friends to you (hint: the business card / paper coupon thing is kinda out…)
- A way to track how many new customers come in to you
- A way to reward customers who send enough friends
- A way to make sure friends can’t redeem multiple free gifts at your location.
- A way to run and track multiple referral programs if you have multiple locations.
- And ideally, a way to integrate this with your POS (point of sale) so that you can make redeeming rewards as easy and fast as possible.
Sound like a lot of work? It is.
That’s exactly why we created GrowThat – a referral program app that lets small business owners (coffee shops, pizza joints, food trucks, cafes, hair salons, you name it…) create custom referral programs that run automatically, tracking your success & rewarding customers, so you can grow your business in your sleep.
So if you decide you want to create a referral program that runs itself and tracks your success, you can click here to start a free trial of GrowThat, and use it free for 7 days. Or click here to read features of what it can do for you, or here to see how GrowThat pays for itself after gaining you just a few new customers, then starts making you more money than it costs!
Jump to a section:
Don’t wanna the entire thing? Jump to a section:
- Try our referral program app for small business – FREE
- What makes a good referral program
- All referral program ideas – entire list
- Ideas for coffee & tea shops
- Ideas for ice cream shops
- Ideas for hair salons & barber shops
- Ideas for restaurants, cafes & food trucks
- Ideas for boutiques or consignment shops
- Ideas for bakeries
- Ideas for breweries
- Run an automated referral program (in your sleep)
OK… let’s get into it…
The golden rule of referral programs: don’t be stingy.
In fact, it’s best to stop here and just say of referral programs in general: be generous.
Don’t be stingy.
Stingy referral programs don’t work. Know why? Because they don’t make it worth it for new customers to come in and try you out. And they don’t make it worth it for your existing customers to go out of there way to send friends to you.
If you’re thinking of running a referral program at your small business, and going into it with the mentality of “I’m going to give away as little as possible“, that’s a bad way to start.
Take the long view. Understand what it’s worth to acquire a new customer who becomes a regular at your business. Even if you give $50 in free product (and most of you won’t have to give anywhere near that much away), if the customer likes your place and comes back just a few times a month for a year – you’ve already gained way more than you spent.
So take the long view. Be generous in your referral program. Got it? Good. Now, let’s start with the basics…
The basics of creating a referral program: what makes a good referral program?
So what makes a good referral program?
To make a good referral program:
- Choose something (ideally, a free gift) to give new customers, to get them to come in and try you out.
- Then choose what you want to give as a reward existing customers who refer friends to you.
- Finally, choose how many friends your customers need to successfully refer in order to earn that reward.
That’s how you make a good referral program, in a nutshell. A few things to say here: we recommend giving something free to new customers (which will make it much more likely they come in to try you out, and make it more likely for your existing customers to send their friends your free offer), and we recommend giving a free reward to customers who refer friends your way.
By giving #1 and #2 free, you’re just going to have a more successful program. The trick comes in step 3: making sure that you set the amount of people at the right amount to make it attainable enough, yet worth it for you so that it’s cost effective.
Here’s the takeaway: successful referral programs are generous, trackable, and allow you to acquire a new customer for the right price.
Now, let’s break down each one of these steps:
Step 1 – choosing what to give new customers to get them to come in and try you out.
To be clear, while you can choose to give a simple percentage discount off something, we think that the best customer referral programs give something free to new customers.
Now, you may be thinking, “Free?? Won’t that end up costing me a lot in money or product?”
The answer is, “not really.”
Referral programs are actually often one of the least expensive forms of marketing that small brick and mortar businesses can do. We’ll break down why below (or just click here to use our referral program “return on investment” calculator).
Think about it – we’ve all received those business cards or paper coupons that offer 10% off a coffee, ice-cream, or hair cut.
And be honest… where do they end up? What is the fate of that poor little business card coupon? It ends up spending it’s life in your wallet or purse – wrinkled and worn down – until we finally realize “why am I carrying this thing around? I’ll never use it…” then throw it in the garbage can.
Why is that?
Because when you’re talking about coffee (for example), it’s simply not worth taking a risk and stopping at a new coffee joint on your way into work, just to save 20 cents.
But a free coffee? Most of us would stop by for a free coffee.
So when you create a referral program, we recommend choosing something free you can give new customers. Bottom line: it’s probably going to entice more people to stop in and check you out.
Here’s another thing: giving something free to new customers makes it easier for your existing customers to send their friends your way.
Here are two scenarios to illustrate this point:
Situation 1: your customer considers referring a friend to you. So he/she goes to send your offer to their friend. But you only offered 10% off. that’s not that great. Is it even worth sending?
Situation 2: you offer something free (like a small coffee, or kiddie ice cream cone). Your existing customer can now say to his/her friends, “here’s a small coffee, on me!”
Who wouldn’t want to send their friends a free coffee? What kind of monster would you have to be? Just kidding 😉
But the point is – giving something free to new customers is going to give you your best chance of success.
Now, one last note on this point –
If you’re an “expensive” brick and mortar store, in other words, if your products cost $25+, you might be able to get away with just offering a discount – but you should still try and offer something for free.
For example, if you’re a hair salon that charges $100/haircut, it might not be realistic for you to give away a free cut. If it is, great! Do it! But if it’s not, that’s where offering 50% off might come in handy. However, we still recommend trying to stick with the “free” theme.
So see if you can offer a side product or add-on for free. For example, maybe the cut is full price – but it’s “free hair coloring” or something like that. We’ll go more into depth on the referral program ideas below.
Step 2 – Choosing what to reward your existing customers, who are sending friends to you.
Part of creating awesome customer referral programs is choosing what you’re going to reward the ones actually doing the marketing work for you: your customers!
As with step 1, you want to be generous here.
Giving 10% off something is no way to say “thank you!!!” and reward that loyal customer, who went out of their way to tell all their friends about you.
Again, we recommend giving something free. In fact, it can’t be stated boldly enough: give something FREE to your loyal customers who send friends your way.
They’re saving you the time and money of having to pay for ads in the local paper, or signs on the road, or social media ads and pay-per-click. They’re giving you the best thing anyone could. They are risking trust with their friends, to tell them about your store, and how great it is. So reward them for this.
We’ll get into more referral program examples below, but if you’re a coffee shop – give a $10 gift card! Or a bag of coffee. Or a large, specialty latte. Point is- give something nice.
Step 3 – Choose how many friends your customers need to successfully refer, in order to earn their rewards.
The keyword here is “successfully”.
When you choose this number, it should be the number of friends a customer has to send – that actually come into your location and redeem their gift.
After all, if they don’t set foot in your shop – they haven’t been “referred” to you, right? (If you need a way to track if friends have actually successfully redeemed – and come into your store – we recommend using GrowThat).
The trick is to find something that’s generous enough to give away for free, but that is cheap enough for you – that you’re gaining new customers at a good price.
For example, if you’re a coffee shop, you don’t want to be giving away a $10 gift card to new customers, and rewarding referring customers with 2 bags of coffee.
The goal is to keep your cost per acquisition (a fancy way for saying, “how much it costs for you to gain a new lifetime customer”) low.
“Give us some examples!” they screamed.
OK – you’ll shall have it. Here is the ultimate list of customer referral ideas, to run your customer referral program:
Creating referral programs that work: the ultimate list of referral programs ideas.
This list of “refer a friend” program ideas will be broken down by type of business, to make it more relevant for you.
Obviously, a coffee shop is going to give different referral rewards than a hair salon or barber shop would. And a boutique is going to need different referral marketing examples than a restaurant or food truck.
If you don’t see your business type listed below, just let us know and we’ll see if we can get around to adding it.
Referral program ideas for coffee shops or tea shops.
OK – so we’ve used coffee shops quite a bit in our examples above. The reason is, coffee shops are perfect candidates for referral programs. It’s easy to give something free (usually a small coffee or tea), and reward customers with something nice (like a $5 gift card or a large latte). It’s cost-effective to acquire new customers, and the ones you gain that become regulars will come back probably weekly (if not daily).
That said, here are some referral program ideas for coffee or tea shops:
- Give new customers a free small coffee to try you out, and reward referring customers with a free large latte, for every 3 friends they successfully refer.
- Give new customers a free small coffee to try you out, and reward referring customers with a free small coffee, for every 1 friend they successfully refer.
- Give new customers a free small coffee to try you out, and reward referring customers with a free bag of coffee, for every 5 friends they successfully refer.
- Give new customers a free tea to try you out, and reward referring customers with a free tea, for every 1 friend they successfully refer.
Referral marketing ideas for ice cream shops.
I scream! You scream! We all scream for… you get the idea.
Like coffee shops, ice cream shops can really benefit from a good referral campaign. Just find the right balance of what you want to give to get people in the door (remember: be generous!) and what you’ll reward referring customers, and see how it goes!
- Give new customers a free small ice-cream to try you out, and reward referring customers with a free large sundae, for every 3 friends they successfully refer.
- Give new customers a free small ice-cream to try you out, and reward referring customers with a free small ice-cream, for every 1 friend they successfully refer.
- Give new customers a free milkshake to try you out, and reward referring customers with a free milkshake, for every 1 friend they successfully refer.
Referral program examples for hair salons & barber shops.
Barber shops and hair salons are awesome, because when you find a shop that cuts your hair “just right”, you often stay. So although it’s usually more expensive for hair businesses to run referral programs, it can be really beneficial for them.
Think about it like this: a woman gets her hair cut at your place, and sends her friend your “free hair cut” offer (because you decided to be so generous!). Her friend comes in, and you kill it (nice work!). Now, she’s going to come back to you each month to get her hair done. Oh, and because she was so happy, and she wants to earn free haircuts herself, she’s going to join your referral program and send her own friends to you.
That’s the beautify of referral programs: they allow for natural, healthy, “viral marketing”. That said, here are a few ideas for your referral program…
- Give new customers a free haircut to try you out, and reward referring customers with a free haircut, for every 5 friends they successfully refer.
- Give new customers a free hair coloring to try you out, and reward referring customers with a free haircut, for every 3 friends they successfully refer.
- Give new customers a free beard-trim to try you out, and reward referring customers with a free beard-trim, for every 1 friend they successfully refer.
Referral ideas for restaurants, cafes, and food trucks.
If you run a restaurant, cafe, or food truck, you’ve got a lot of options for setting up a referral program. You can choose to give a main meal feature (like an entree, or sandwich), a free side (like fries, or something else), or a free dessert. We’d recommend giving something that you think will most entice people, which is usually free.
So if you’re a food truck – what are you known for? If you’re a taco truck – give a free taco! If you’re a cafe, give a free coffee or sandwich. This is where we can’t help as much, because every restaurant or cafe is so different. But here are a few ideas:
- Give new customers a free dessert to try you out, and reward referring customers with a free sandwich, for every 3 friends they successfully refer.
- Give new customers a free fries/sandwich to try you out, and reward referring customers with a free sandwich/fries, for every 5 friends they successfully refer.
- Give new customers a free small drink to try you out, and reward referring customers with a free large meal, for every 3 friends they successfully refer.
These referral program ideas are just ideas, make them your own depending on what food you serve, and what makes sense for your business!
Referral marketing examples for boutiques.
A boutique is probably one of the only small business types that makes sense to give a % discount to friends of customers. The reason for this is, unless you’re selling fairly inexpensive stuff, it’s going to cost a ton to give away something for free. You can’t very well go giving away a $50 blouse or dress shirt to every new customer who walks in, now can you?
So with something like this, you’ve got a couple choices when it comes to referral marketing ideas:
- Give new customers 25% off to try you out, and reward referring customers with a $25 gift card, for every 5-10 friends they successfully refer.
- Give new customers a free accessory (something small and less expensive) to try you out, and reward referring customers with a $20 gift card, for every 5 friends they successfully refer.
Referral campaign ideas for bakeries.
Bakeries fall into the same category as coffee shops or ice cream shops. when it comes to choosing referral rewards for customers. Bakeries are perfect candidates for referral programs because they allow you to give away something for free to both new visitors, and customers in your referral program, for a very low cost.
Here are a few examples:
- Give new customers a free pastry to try you out, and reward referring customers with a free pastry, for every 1 friend they successfully refer.
- Give new customers a free baguette/loaf of bread to try you out, and reward referring customers with a $5, for every 3 friends they successfully refer.
Referral program ideas for breweries.
Ahhh… craft beer. Who doesn’t love a good IPA? Running a referral program can be very successful for breweries. Why guy or gal wouldn’t love to send their friends a free beer?
Here’s another great benefit of running a referral program at a brewery: most people who come in to redeem a beer will buy at least one more. That means that if your pricing is right, you should break even fairly quick on your referral program. And if the new customers like your beer, they’ll come back regularly and you’ll start making a good profit off your program.
Here are a few brewery referral program ideas:
- Give new customers a free beer to try you out, and reward referring customers with a free beer, for every 3 friends they successfully refer.
- Give new customers a free beer to try you out, and reward referring customers with a free 6-pack, for every 5 friends they successfully refer.
How to run a referral program in your sleep.
Successful customer referral programs make it easy for your customers to join and share gifts with their friends. And they make it easy for the friend to redeem gifts at your location.
Learning how to create a referral rewards program is easy… executing it is harder. If you’re wondering how to build a referral program that will actually work, and be easy to manage…
Or if you’re struggling with how to start a referral program, you’re not alone. Starting one, promoting one, tracking one, and rewarding customers is tricky.
If you do it yourself, you kinda have to come up with a way to track it the old fashioned way (pen and paper), or using a spreadsheet, or some other method. And that takes time away from you and your staff.
That’s why we made GrowThat.
GrowThat is a referral app specifically made for small, brick and mortar businesses. It helps you create, promote, track, and reward:
- Create a referral program in minutes.
- Promote your referral program with one simple link, shareable on social media, email, your website, or anywhere else you want.
- Customers can join your referral program with a click, and sign up in minutes.
- Each customer gets their own unique link to send your free gift to their friends, right from their phones. No forgetting business cards or paper coupons.
- GrowThat makes sure that even if 5 of your customers send a free gift to the same friend, that friend can only redeem 1 at your location – so you don’t get ripped off.
- GrowThat will track how many friends each customer has referred, and reward them automatically when they’ve sent enough.
- New friends visiting you, and customers in your referral program can redeem their gifts in seconds right at your Point of Sale.
Best of all – you can try it totally free. Click here to try GrowThat 7 days free, and launch your referral program today.
We love small businesses and want to see you thrive. We’re focused on your success, and we want GrowThat to make you much more money than it costs.
If you have questions or want to talk to us about the product – reach out anytime.
To your success and growth,