8 Customer Referral Program Ideas for Service Businesses
Loyal customers are the bee’s knees, but are you making the most of yours? Beyond consistent income and positive testimonials, they’re also the perfect way to generate new leads through word-of-mouth marketing.
Using a customer referral program, you can reward your best clients by encouraging them to introduce your business to their friends and family members—a win for everyone involved.
We’ve got 8 customer referral program ideas to help you grow your client base, increase revenue, and leverage the power of personal recommendations.
What is a customer referral program?
A customer referral program is a word-of-mouth marketing strategy centered around asking loyal customers to refer your business to their friends or family members. In exchange, they’re rewarded with incentives such as discounts, perks, or gifts.
For example, a service business might offer a 15% discount on a future service, a free upgrade to a premium package, or a gift card for every referral a customer makes that turns into an approved quote or finished job.
READ MORE: How to ask for referrals
How to build a customer referral program
To build a successful customer referral program, you need to:
- Know who your customers are. Do most of your customers book recurring work or one-off jobs? Understanding who books your services can help you pick the right type of referral program and choose the most effective incentives.
- Select the right rewards. Different rewards make sense for different industries and services. While a discount on a recurring service is a great idea for a cleaning company, it doesn’t always work for plumbing businesses. Pick a referral incentive that works for your clients and services to maximize your loyalty program’s potential.
- Do the math. Calculate how much additional profit you expect a current customer to bring in before you choose a discount or upgrade to offer to ensure you aren’t covering incentives out of pocket.
- Set limits. Come up with basic rules and guidelines for your referral process, like who qualifies, whether there are limits, when rewards will be given, and how you will track referrals. Remember, you aren’t rewarding a referrer just for spreading the word about your business. Their efforts need to result in a completed job before they benefit from your customer loyalty program.
- Market your program. Promote your referral program to existing customers through email marketing, your website, social media, and print marketing material to spread the word. The more our customers know about your program, the more likely they are to take advantage of it.
Using Jobber’s referral program software, you can build a referral program in minutes. You can create an automated email campaign that offers current customers a discount on a future service for every successful referral.
Once the referred customer approves a quote or you complete the job, a discount will automatically be applied to the referring customers account for a future service.
8 customer referral program ideas
How you structure your referral program depends on the services you offer and the industry you’re in. For example, the incentives you offer will differ based on whether your services are recurring, like house cleaning, or one-off, like building a fence.
Run through these customer referral program ideas to find the ones that work best for your business and clients so you can add them to your marketing strategy.
1. Recurring service discounts or upgrades
One of the simplest ways to begin offering a customer referral program is through discounts or upgrades.
Using this type of referral program, for every referral a loyal customer sends your way, you could offer:
- A reimbursement on a previous service, like a $25 refund on their last bill
- A discount on a future service, like 10% off their next house cleaning
- A free one-time upgrade on an upcoming job, like a free fertilizer treatment on a future mowing service
These referral programs work well for businesses that offer recurring services, such as house cleaning, lawn care, pool maintenance, or dog walking.
2. Gifts and cash rewards for one-off jobs
If your service business tends to do more one-off jobs, like handyman services, painting, junk removal, or electrical repairs or installations, offering gifts or cash rewards over service discounts is a better strategy.
For example, if a client needs a fence built, they could still refer you to a neighbor, but they’re unlikely to need ongoing service.
Those customers should still benefit from providing you with a referral, but in this case, it makes more sense to reward them with something they can use now instead of a discount on a service they may not need for a while.
In these cases, you can offer things like:
- A personalized gift that speaks to their interests, like a gift card for a local restaurant, a ticket to a sporting event, or a deluxe coffee sampler.
- Branded swag your customers could use every day, like a mug, water bottle, pen, or magnet.
- Prepaid debit cards or gift cards based on the value of the referral. For example, bringing in a recurring customer should earn someone more than a one-time customer—and so should customers who book higher-priced services.
In this referral program example, Holtkamp HVAC & Plumbing offers two tiers of Visa gift cards depending on the service a customer’s referred friend books:
3. Give double-sided incentives
Using a double-sided customer referral program means you reward both old customers and referred customers.
This type of referral program is often called social gifting, and it works well with service discounts.
For example, Two Sisters Maid to Clean offers a free maintenance cleaning to referring customers and a discounted cleaning for new recurring customers.
Another option would be to offer your existing customer a gift or cash reward while your new customer gets a service discount.
4. Referral contests
Referral contests work by rewarding customers who send referrals your way with a prize, such as:
- A free service, like a house cleaning
- Money towards a job, like $500 off a future landscaping project
- A cash prize, like a prepaid debit card
The key to a referral contest is to set a deadline to create a sense of urgency and encourage current customers to act fast.
While many service businesses choose prizes that align with their existing offerings, some choose to go a more unconventional route, like Bob’s Carpet Care. Their referral contest offers a “romantic dinner for two” at a restaurant as the prize.
You can select winners in a few different ways:
- Setting up first, second, and third place prizes
- By rewarding the customer who brings in the most referrals
- Entering all referring customers into a random draw
5. Holiday and seasonal referral programs
If you need help growing your customer base, try a seasonal or holiday referral marketing idea. These are naturally time-sensitive, which spurs customers to find referrals faster.
If offering a year-round referral program doesn’t make sense for you, either because you have a seasonal business or because you don’t have the resources to manage an ongoing initiative, seasonal and holiday discounts are a good option.
For example, if you’re a lawn care company that offers snow removal during the winter months, you could try out a referral program that offers a 40% discount on every successful referral that you get before the season starts.
Or, if you just want to test drive customer referral programs, try a themed reward, like a Valentine’s dinner for two, or an Amazon gift card to help with holiday shopping.
6. Charitable donations
If there’s a cause that’s near and dear to your business, consider building a referral marketing program around it. That way, both you and your customer feel like you’re doing a good deed, and you’ll be using your referral program reward to pay it forward.
Let’s say you’re a dog walker. If a referral brings in $150 worth of business, you could donate 15% of the first invoice to a local animal shelter.
Then, use that information in your marketing material to set you apart from competitors and help build your brand.
For example, you could add how much you’ve donated to date to your website and social media pages or even include a line on your invoices to incentivize customers to support the cause.
7. Tiered rewards
Tiered rewards programs incentivize customers to get more referrals by rewarding them with different levels of prizes based on how many new customers they bring in.
Tiered programs work well with point systems. For every successful referral, a customer receives a certain number of points. The more points they have, the bigger the reward.
For example, a lawn care company may give a customer 20 points for each referral and offer rewards like:
- 100 points: all of the above plus weed control treatment
- 40 points: one free mow
- 60 points: one free mow plus hedge trimming and mulching
8. Partnerships
Partnering with another business is an effective referral program strategy you can use to reach a new audience.
For example, as a landscaping company, you could partner with a local garden center.
You would offer a service discount to any customers referred to you by the garden center. In turn, they would offer discounted supplies or materials to anyone you refer to their business.
This type of referral program takes the work out of the customers’ hands while still providing them with a benefit. Plus, it gives you an opportunity to reach new customers and be recommended to them by an established brand that they know and trust.
How to promote a customer referral program
Once you settle on a customer referral program that works for your business, it’s time to get the word out. Some of the best ways to promote your new customer referral program are to:
- Leave referral cards at job sites. After every job, leave a card behind that promotes your referral program. A physical reminder about your referral reward can keep it top of mind—especially if it sits in the customer’s back pocket.
- Make it easy to collect referrals. Using field service and referral software like Jobber, you can request referrals from happy customers through an automated referral campaign. Each email contains a unique referral link, allowing customers to share your program with friends and family members in seconds.
Plus, referral tracking has never been easier. When they share their unique referral link with a friend or family member, it’s automatically tracked, and successful referral discounts are applied to their account for future services.
- Promote referrals in customer communications. Highlight your customer referral program in contracts, invoices, receipts, service follow-up emails, thank you notes, and email signatures to get the word out to satisfied customers.
- Create employee referral programs. Consider offering referral incentives to motivate your team to bring in new clients. The more they promote your referral program, the better their chances are of getting a referral bonus or reward.
- Reach out to happy customers. Positive reviews act as indirect referrals, helping to sway customers who are on the fence to book with you. If a customer leaves you a glowing review on Google or another platform, reach out to them to personally tell them about your referral program. They’ll appreciate the potential to be rewarded for their efforts, and you’ll up your chances of getting indirect and direct referrals from them.
- Have an attention-grabbing headline. The more straightforward your customer referral program, the easier it will be for you to promote. Stick to a simple but appealing headline to tell customers exactly what’s in it for them from the get-go. For example, “Get $50 off your next cleaning when you refer a friend”.
A successful referral program idea is based on three elements: a simple strategy, enticing referral rewards, and punchy promotion. When done right, it can bring in new contracts, create referral partners with existing customers, increase customer retention, and grow your service business.
Use software like Jobber to streamline your efforts and boost your referral rate by automating your customer referral program so you can focus on the job at hand.
Originally published in October 2019. Last updated on October 15, 2024.