11 Simple Ways to Incentivize Customers to Refer Friends and Family

Refer Friends and Family

Whether it has to do with haircuts, dining options or legal help, we trust people closest to us to give us the best advice. That’s why we asked 11 entrepreneurs from Young Entrepreneur Council (YEC) the following question:

“What is one successful way you incentivize customers to refer friends and family to use your service or product?”

Here’s what YEC community members had to say:

1. Provide Supplementary Services Offered “At Cost”

“I’ve seen a lot of companies end up paying customers so much to refer people that they destroy their profit margin. Instead, we offer our loyal clients supplemental services “at cost.” We have found this just as effective in terms of recruitment as offering untenably high discounts or free services.” ~ Joel ButterlyInGenius Prep

2. Give Referral Bonuses

“We award referrals with $100 off for every phone line. We’ve always done this and the effort has paid off. Referrals are one of the best ways to generate leads and get in front of people who may want/need your product.” ~ Yaniv Masjedi, Nextiva

3. Give Them an Exclusive Experience

“Nowadays customers have unimaginable options to choose from, where price incentives alone may not be enough of an impact for a referral to happen. You have to create an emotional tie with your customer where they feel excited, privileged, or cool by sharing your business. Some of the things we do are provide genuine personal customer service and exclusive, member-only limited products.” ~ Billy OnoKami Speed

4. Provide Discounts for Social Shares

“Adding a small service discount for people who have liked your social pages can be a great way to get the word out there without inconveniencing your customers or even needing them to talk to someone. Their friends and family, which could be hundreds of users, will see it as an endorsement.” ~ Matt DoyleExcel Builders

5. Ask for Referrals Before the Contract Ends

“When are your customers the happiest with your work? When things are at the pinnacle. Therefore, when your clients are still very excited to be working with you is the very best time to ask who they know — and if they could please pass on that name to you. Remember to personally follow up and say thank you when you are referred to someone. Gratitude goes a long way in business.” ~ Nicole Munoz, Start Ranking Now

6. Take Advantage of SMS

“When your product really solves a problem for the industry and ends up saving users money and time, they become your biggest advocates. But you still have to give them tools to refer the app or product. And an ability to refer specific people is key. SMS is the biggest source of referred installs for us, while social networks work less effectively.” ~ Ivan Tsybaev, Trucker Path, Inc

7. Let Your Reputation Speak For Itself

“Give really good service and your reputation will speak for itself. I find that discounts and incentives sometimes can come off gimmicky in certain industries and that you can get better results when you provide the best products and service possible.” ~Leila Lewis, Be Inspired PR

8. Don’t Be Afraid to Give

“Measly referral bonuses can mean very little to a consumer who doesn’t want to become a full-blown affiliate or brand ambassador. Offer free product or services to consumers to “share” with friends and family and build loyalty and brand awareness organically. Encourage buyers to give out these free samples by offering customizable gift wrapping or personalization.” ~ Blair ThomasFirst American Merchant

9. Make Your Brand Addictive

“I’m not talking about becoming the next Philip Morris, but if you want to incentivize your customers, you need to create a product they get hooked on. How does one begin smoking? By hanging out with other smokers. If you have an amazing product, of course people will tell their friends. But please, do this responsibly and create positive addictions like yoga, healthy food, or good content.” ~ Matt WilsonUnder30Experiences

10. Offer Top-Notch Customer Service

“Discounts are a great way to lure friends and family to use your service, but you won’t even get them knocking on your door unless you build a great reputation in the first place. First and foremost, do the best job possible, offer top customer service at all costs — even if it means you’ll be spending your weekend and nights on the computer. And then offer an attractive discount to top it all off.” ~ Ayelet Noff, Blonde 2.0

11. Just Ask

“We’ve tried all sorts of gimmicks, campaigns, contests and everything else you can image. Not a single one of those has ever worked. It takes a lot to motivate someone to do your marketing for you. However, if your product is something they already love, simply asking them to tell their friends is all that’s needed to land consistent referrals.” ~ James SimpsonGoldFire Studios

Referrals Photo via Shutterstock

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The Young Entrepreneur Council The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

2 Reactions
  1. All of these ideas are amazing. Great advice on incentivize customers to refer friends and family to use your service or product. This is the an amazing way to engage with your customers.

  2. What are the legal implications of #1 – #4? Sounds like things the FTC and the BBB care about.