Referrals are key to your marketing strategy and customer growth. They serve as easy ways of bringing in new customers by having your customers share an offer out to their friends and social networks.

That said, a referral offer that doesn’t really “offer” something of value to your prospective customers will often go unused.

If you’re looking to boost your referrals and bring in more customers, make sure your referral offer boasts these traits.

Your referral offer needs to provide real value.

When creating a referral offer, you need to think about what would draw someone to come visit your business as well as what a new customer is worth to you.

For example, say you’re a spa that offers treatments averaging $80-100 each, or a shop with mostly high-end products. In this case, giving a $5 off coupon really isn’t going to save your prospects much money, and chances are they won’t use your offer unless they can combine it with another special that you’re running.

Taking at least 20% off a service or product is usually enough to get people interested in paying the rest of the price. Alternatively, you can offer a free add-on service, such as a neck massage or personal shopping consultation that incentivizes your prospects to still spend money with you while also giving them something that they may not normally pay for.

For fitness studios and gyms, a free day or class is usually the gold standard for referrals. Again, prospects are only going to come in for your referral offer if they feel like they’re going to receive real value from it. Giving them a couple of dollars off a day pass or a class doesn’t quite incentivize them to go out of their way to try your gym or studio over someone else’s.

On the other hand, allowing them to test the waters for a day or a class (before committing to a monthly membership) helps them see what they’d be getting themselves into. Chances are, if they have a great time during their referral offer session, they’ll seek you out again and again.

For gyms, it’s easy to offer a free day pass to prospective customers because it ultimately doesn’t cost you any money. You can give them a day to check out your facilities, try out one of your classes, take a few minutes in your sauna and really see what you’re about.

Your referral offer should give them an experience, not just a freebie.

You’re looking to create lifelong customers with these referral offers, not just quick addition to your monthly numbers. Because of this, you don’t want your referral offer to serve as a one-time, grab-and-go trade-in that doesn’t give them the opportunity to really embrace the experience of doing business with you.

Ultimately, you want your referral offer to give those prospects a glimpse into what it’s like to be a regular customer of yours – including the engagement and experience that come along with that.

For this reason, it’s best not to give away a free product of some kind to people who come in your door with a referral offer. Yes, you’ll be able to capture their contact information when they exchange their offer, but that’s really where the transaction ends.

By giving a discount on an experience – such as 20% off a shopping trip or – you’re putting your prospect into the shoes of a customer and showing them what it means to be a regular of yours. Treat them the same way you’d treat your regular customers: smile, ask them questions, get to know their needs and goals for visiting you.

This will help them align themselves more with your business as a whole and help keep them coming back even after they’ve used their referral offer.

Your referral offer should be something your customers want to give their friends

Lastly, your referral offer needs to appeal not only to your prospects, but to your customers as well. This means that you need to both follow the insights above to make your referral offer something that your prospects actually want to use, but you also need to reward your customers accordingly for helping you bring in new customers.

Referrals are often the most out-of-the-way way for your customers to earn points in your loyalty program – so you have to make it worth their while. Offer 150-200 points for those who invite their friends, and don’t be afraid to tack on a few bonus offers (such as the Time Bonus or Promotion Bonus) for your customers that refer 5 or more people to your business. With social and online referrals, this becomes easier and more attainable.

Either way you swing it, it costs much less to acquire new customers through referrals than it does to market on your own. Take advantage of your relationship with your customers – and your offerings – to get new people through the door.

Final thoughts

How are you succeeding with referrals in your business? Tell us in the comments below.