Referral Programs for Small Businesses: What You Need To Know [+ Examples]

Learn how to implement the best referral programs for small businesses. Check out these comprehensive examples and learn how to create referral success.
Updated on June 28, 2021
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Table of Contents

Table of Contents

Small businesses, just like larger businesses, can greatly benefit from referral programs. By allowing your customer base to market on your behalf, you can greatly increase your reach and ROI … without seeing the numbers spike in your marketing fees.

When we say “referral program,” we’re not talking about an informal one where customers hand out cards to their friends, and you do all the tracking manually. Rather, we’re talking about referrals that come from customers who use an official referral program – a digital one –  that tracks their marketing for you.

A digital referral program (powered by referral software) might sound expensive, but just because it’s what the big companies use, doesn’t mean it’s a huge expense. In fact, newly acquired customers pay the fees, and then some.

Consider the benefits that can be found with implementing a successful referral program for your small business in order to see your profits grow, and see your customer base grow more loyal.

Take a look at how referral programs for small businesses can expand your small company, including some successful examples.

Why does your small business need a referral program?

There are many benefits that can come from having a referral program for your small business or startup. Take a look at these growing benefits that you can cash in by accelerating referrals from loyal customers and brand advocates.

Promotes customer acquisition at a lower cost

Do you know how much it costs your company to bring in another paying customer? Chances are, whatever the fee, it’ll lower when it’s a customer doing the work for you. With a small business referral program, you pay out a reward but gain a paying customer. Because the new customer’s business pays for that referral reward, you are only profiting in the process. It’s also up to you to determine how much that reward will be.

This method can greatly reduce the customer acquisition fee for small businesses. Instead of turning to pricey marketing campaigns, your brand can focus on pleasing their current customers and allowing them to draw in business on your behalf. All with the click of a button that increases customer experience.

Creates loyal customers through the power of trust

Another benefit of a small business referral program is the ability to create trust among its customers. And happy customers mean more profits. As repeat consumers gain a reward for their referrals, they become more invested in the brand. They want to see it succeed, they want to refer customers, and their referrals are genuine. This prompts them to keep referring more customers, and therefore, continuing to bring in new, loyal customers.

Consider growing your marketing strategy with customer-influencers, e-commerce shoppers, and new business leads – all to help grow part of your business.

Builds strong customer relationships

Similar to what we described above, a referral reward program builds a strong bond with your customer. They feel comfortable coming to you and bringing their family and friends as new leads. They trust you and they want their friends to join in on the fun, increasing your number of referrals. Plus, they feel more invested in the success of your business.

Accelerates word-of-mouth marketing with a viral loop

Referral programs have the ability to greatly advance your marketing efforts, especially through online channels. This is where small business owners can really thrive – social media referrals mean getting customers to share referral links to many friends at once.

With social media posts and customer reviews, you can give your brand the exposure it needs in order to move forward, and quickly. The friends who see your customers’ social posts might be compelled to share with their own friends, creating a continuous loop of referrals. Follow templates that work to accelerate the growth of your brand.

Building the best small business referral program

There are a few steps you can put into place in order to build the best small business referral program possible. Follow these best practices:

Make sharing easy

The easier it is to share your referral, the more often it will be shared. It’s as simple as that. Make it simple for your customers to share their code, whether it’s via social, via email, or by copying and pasting a link into a text. This simple step can get you far.

Keep your program copy concise

Don’t make customers read to find the info they need – make it short and sweet. Get to the point and let them know what they can earn, and what they have to do to get it. You can also include something quick about why the new customer should go with your brand. These quick, yet effective sentences are informative and to the point.

Offer enticing but cost-effective rewards

Next, you should entice your customer by providing a reward – that’s why they’re referring in the first place, after all. What type of reward will excite your customer into sharing your referral code? What will get them wanting to earn? Store credit? Cash? A free product? Look at your customer base and their interests to find your best bet.

Don’t break the bank in doing so, however. Your small business should be able to afford the reward each time around. Keep it within your budget so you aren’t overpaying for warm leads.

Tie the rewards back to your business

Another best practice is to tie your reward back into your business. By offering credit to your business or cash off, you can entice the customer to purchase even more. Likewise, you can offer a free upgrade of your service to show customers what all you can do and give them a shot at top-tier services.

Use an eye-catching call-to-action

Next, grab their attention with a call-to-action –  a CTA – that will entice them to take the next step. A clickable button or link with a CTA attached clearly shows customers what they should do next and how they can move forward toward their reward.

Showcase what makes you unique as a small business

Now it’s time to show customers what you’re about. Why should existing customers sign on with your brand and make the referral? Why should new customers order from you? What sets you apart from bigger businesses?

Keep it short, but tell the world what’s unique about your company so they have a better idea of who they’re doing business with. You can also do this with images, voice, and tone, or customer reviews.

Focus on friendship and community in your messaging

Another way to reach customers is by showing them what a good friend they will be for their referral. They’re rewarding a friend, giving them a gift, or becoming closer in their friendship – all thanks to their referral. This can be done with language, saying something like “Give your friend $20,” or with images, such as pictures of friends enjoying time together.

And since you’re a small business, you have a connection to your community that most larger businesses can’t match. So, if you include a community element in your referral program (such as referencing how you serve your local area, or including donations to a local charity in your program), this will be to your advantage.

Thanking customers for building up your small business through referrals is another effective “community” element, because it shows customers how they contribute to your success.

5 small business referral program examples

Let’s look at a few examples of small business referral programs. This will give you a feel for what works in these campaigns, and show you how you can better reflect key elements in your own referral campaign.

Tomlinson Bomberger

referral programs for small businesses: Tomlinson Bomberger

With their catchy headline, Tomlinson Bomberger doesn’t make customers search for their reward – it’s right there in the text. Customers know what they can earn ($50), and they quickly find out how to earn it. By adding the friend’s info, customers can earn with this rewards program. The company also focuses on friendship with their image, reminding us just how satisfying it is to help a friend (including through a referral). Finally, they close out with a clear, easy-to-spot CTA button. No messing that one up! It’s just click and refer.

Camp Young Judea Texas

cyj small business referral program

camp young judea texas small business referral program

Next up, it’s Camp Young Judea Texas. This brand takes the friendship aspect to the next level, outfitting their referral page with plenty of kids having fun at camp. (Great ploy, right?)

They’re also hyper-focused on how their community contributes to their success through referrals, and very thankful for this: “When a prospective parent calls us to learn more about Camp, there’s a very good chance it’s because a camp parent recommended us to them. It’s clear to us that YOU, our camp families, are our best recruiters and biggest cheerleaders!”

 A jumping arrow even shows users where to go to start their referral process. There’s no messing this one up – just scroll and get the info on how to refer a friend to this small business.

Morgan & Morgan Attorneys at Law

morgan and morgan small business referral program

You might be wondering how a law firm can have a referral program, but the company actually offers charitable donations on referring customers’ behalf. We love this as it pulls at customers’ heartstrings, enticing them to refer for a good cause. Morgan & Morgan donates books to children of low-income families, on their customers’ behalf, with each referral. Users can easily scroll down, type in the case description, and find the clickable link to submit. Because there are only a few form fields, this process is simple and can be done quickly, further enticing customers to make a referral.

Weed Man Lancaster

 referral programs for small businesses: Weed Man

It doesn’t get any simpler than this … in a good way! Users referring Weed Man Lancaster can fill out only a small amount of info and then click “take me to the next step.” We love the simplicity! With steps like these, more customers are likely to refer their friends and family members going forward. The page’s text also explains what customers should do (“invite a friend and earn rewards”), and how many steps it takes. And with “refer a friend” buttons available in the top and bottom menus, on every page of the website, it’s also super simple for loyal customers to get to the page and share.

Spa Bar Orlando

referral programs for small businesses: Spa Bar Orlando

Spa Bar Orlando does a good job of laying it all out there for the customer – their terms and conditions are even listed on the referral page. That way, customers can learn the ins and outs of the program, before they ever get started. A smart image and short text also explain what’s ahead as the customer refers. And we love that both the referrer and their friend earn Spa Bar bucks when the friend first uses the Spa Bar services!

Small business referral program software

A great way to keep up with your small business’s referral program is with the use of software. This simple addition to your referral program can help you keep track of incoming referrals, rewards, best customers, and more.

Don’t lose peace of mind. Know what your program costs – and how much revenue it brings in – all with smart software that’s designed to keep your referral program in check.

 Plus, keep your customers happy by instantly giving out rewards when they’re earned. No more hassles of remembering a card!

Take a look at these examples of referral software and learn how they could help your small business thrive with your word-of-mouth marketing efforts. For more info, check out our epic list of referral program software. The 5 choices below are all identified on that list as “best for small businesses.”

Referral Rock

A great way to manage your referrals with smart software is through Referral Rock. This program allows small businesses to completely customize their referral program and create an amazing setup that works for your brand. It’s a great option for those who don’t have technical expertise. However, it can also be used by pros through their HTML and CSS import options. Help your brand thrive with a successful customer referral program.

Referral Rock integrates with several types of business software, so you can keep all your programs working together. Create a smooth way to turn customers into your brand’s advocates, and generate more business, by accelerating sharing via email, social media, and more.

Consider signing up for a free trial for a no-risk way to test out this product.

Genius Referrals

Another software option for your small business referral program is Genius Referrals. This program is widely used by companies and allows customers to integrate their referral programs into other processes. Keep in mind that this program limits the number of rewards and users you can gain, such as gift cards earned, so there may be upcharges as your company grows.

Hello Referrals

Hello Referrals is another tracking software program that allows users to send and track referrals for their company. Because of its setup, Hello Referrals is best used for business networking, such as chamber of commerce groups, Rotary clubs, and small business associations and their referred customers.

Incentivefox

As its name states, Incentivefox is all about creating a customer incentive for sharing. This reward platform helps businesses create and track their referrals for continued growth. However, it’s most suited for larger businesses.

InviteBox

Finally, InviteBox is a software program that allows companies to create their own referral program from scratch to entice existing customers. When going this route, be sure to count how many users you’ll reach, as there are tight limits within each tier that the company offers.

Summing it up

You don’t have to be a big brand in order to benefit from a referral program. Small businesses, too, can find growth in using word-of-mouth marketing. And it can be a far more cost-effective way to reach new consumers, and get them to invest in your brand. Consider implementing this outlet to allow your company to grow. And with the addition of referral tracking software, you can gain peace of mind with a program that’s moderated and kept track of with proven software

To learn more about setting up your own referral program for your small business, check out this comprehensive guide to starting a referral program.

And once you’ve launched, check out these referral program promotion ideas to make sure your customers know about your program.