Loyalty Program Referral Rewards: How To Choose The Right One And Jump Start Referrals

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A successful business is built on killer marketing. When I set out on my entrepreneurial journey, I knew this was the case. Only 33% of consumers still trust traditional marketing tactics, so doing things the way it’s always been done is NOT an option. However, as you shift to a more innovative approach like referrals, you’ll want to make sure you’re set up for success. This means having the best rewards, the best referral codes, and the best platform to monitor it all. Through years of research, trial and error, and luck, I’ve been able to perfect my referral reward strategy, and I want to pass that knowledge on to you. 

What is a Referral Reward? 

When you start a referral program, you’re basically recruiting brand ambassadors. You want your customers to be as passionate about growing your business as you are! But let’s face it; nothing comes for free. 83% of people are willing to refer a business to a friend, but only 29% will follow through. That means your customer base could be 3x the size if people actually bought into your referral program! One of the best ways to get those feet on the ground is to offer a spectacular reward. People will be thrilled to share your business once you answer the age-old question - What’s in it for them?

A referral reward is an incentive you give to customers when they successfully refer new business to you, or to the new customers who make their first purchase after being referred. These rewards transform passive word-of-mouth into an active, measurable growth channel.

Common Misconceptions about Referral Rewards

Everyone has ideas about the best way to reward referrals. This has led to quite a few myths popping up over the years.  I’ll walk you through a few of the most common ones and give you the lowdown on why they’re not as well-thought-out as you might think. 

Myth One: It’s All About the Ambassador 

While rewarding the person who’s out there telling people about your business is important, it’s not the only thing to consider. Having an incentive in place for both the ambassador and the potential new customer is drastically more effective. This is because, while having a friend tell you about a business is enticing, knowing that you can get something for checking them out is even better! 

For service businesses specifically: A two-sided reward structure works exceptionally well because your existing customer vouches for quality, while the new customer gets a risk-free way to try your service.

For example, a dental practice offering $75 to the referrer and 20% off to the new patient removes the friction of trying a new provider.

Myth Two: Cash is King 

While simply giving out money to anyone who brings in a referral might sound enticing, in the long run, it won’t be as effective. Not only does this become cost prohibitive, but it doesn’t make a lasting impression. Chances are, your customers are going to use cash for everyday expenses. That means eventually they’ll forget about the reward altogether. Offering a non-cash reward like a discount or prize creates a lasting impression. 

However, there's an important exception: For high-ticket service businesses (HVAC, plumbing, roofing, legal services), cash or gift cards often work better than discounts because:

• Purchases are infrequent (customers won't use a discount for months or years)
• The referrer may not be the direct customer (business owners, property managers, landlords)
• Cash demonstrates the tangible value of the referral

Myth Three: Scaling is Simple

You might think that with a plan in place and a unique referral code for everyone, you’ll be able to stay on top of referrals no matter how many come up. This isn’t always true. There are tons of stories out there about businesses, big and small, losing track of who is meant to get rewards and when. All it takes is one or two people slipping through the cracks for your brand trust and loyalty to plummet. That’s why having a system in place and a partner like ReferralHero is so important. ReferralHero can handle all the tracking for you so that you can focus on connecting with customers and making the biggest impression possible. 

For service businesses with offline touchpoints: Tracking becomes even more critical. When customers mention referrals during phone calls, at your physical location, or to field technicians, you need a system that can capture these offline referrals and attribute them correctly. ReferralHero's hybrid tracking handles both digital links and name-based attribution for in-person referrals.

Myth Four: Size Always Matters

While having a hugely generous incentive program will likely get people excited, it’s not always the most effective way. Having an air of exclusivity, or offering something memorable, will keep people invested longer than a huge discount. If you can get people talking about their exclusive merch or interactions with your brand, it’s an instant win-win. You don’t want to get caught paying more in rewards than you get in profits. 

The sustainable formula: Your referral reward should typically be 10-20% of your customer acquisition cost (CAC) or 2-5% of customer lifetime value (LTV). For a dental practice where patient LTV averages $3,000,a $75-150 referral reward is both attractive and sustainable.

Myth Five: You Need a Big Budget to Offer Attractive Referral Rewards

One of the biggest misconceptions holding service businessowners back is thinking they can't afford to run a referral program. Here's the truth: Referral programs are pay-for-performance marketing. You only pay rewards when you acquire a new customer—meaning zero upfront cost.

Compare this to traditional service business marketing:

• Direct mail: Pay upfront, 1-2% response rate typical
• Google Ads: Pay per click whether they convert or not
• Billboards/Radio: Pay upfront, difficult to track ROI
• Referral rewards: Pay only when you gain a customer

Low-cost, high-impact reward options for service businesses:

1.      Tiered structures: Start with a $25 reward for the first referral, increase to $50after 3 referrals, $100 after 5. This lets you start small while incentivizing repeat participation.

2.      Service-based rewards: If you're an HVAC company, offer a free air filter replacement ($30cost, $100+ perceived value). Dental practices can offer free whitening ($50cost, $300+ perceived value).

3.      Exclusive access: VIP scheduling, priority emergency service, or exclusive seasonal promotions cost you little but feel premium.

4.      Swag and branded items: A quality branded item (premium water bottle, toolkit, emergency kit) costs $15-25 in bulk but creates lasting brand visibility.

Example: Total Health Dental Care generated 170+ new patient referrals without breaking their budget by offering gift card rewards only when new patients completed their first appointment.

Myth Six: Referral Programs Don't Work for Offline or Local Services

Some service business owners think referral programs are only for online businesses or tech companies. This couldn't be further from the truth.

Service businesses actually have significant advantages when it comes to referral marketing:

Geographic concentration: Your customers live in the same neighborhoods, making word-of-mouth naturally powerful. When your HVAC customer tells their neighbor about your service, that neighbor likely needs the same service.

Visible results: Unlike digital products, service businesses deliver tangible outcomes people can see and experience—a perfectly manicured lawn, a comfortable home temperature, a beautiful smile. These visible results make recommendations more credible.

Local trust networks: According to Nielsen's Global Trust in Advertising research, 92% of consumers trust recommendations from friends and family above all other forms of advertising. For local services, this trust is even stronger because recommendations come from neighbors who faced the same local challenges.

Hybrid tracking works: Modern referral software like ReferralHero handles both digital referral links AND offline referrals where customers simply mention a name. This means whether someone shares via text message or tells their neighbor in person, the referral gets tracked.

Example: Slim Dental attracts 10+ new patients every month through referrals by making it easy for patients to share both online and offline.

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Choosing the Right Referral Reward

So if simply throwing money at people who send referrals your way isn’t going to be effective, what will be? You know your business, employees, and customers better than anyone else. Knowing what will get them excited relies on understanding why they’re invested in your company in the first place. What works for a bank isn’t the same as what will work for a hair care product. Whether you’re looking to reward customers for bringing in friends or employees for finding the perfect fit for a role, you need to know what’s interesting to them. Here are some things to consider. 

Where The Reward Goes

As I mentioned earlier, simply rewarding the person giving the referral isn’t always the best plan. Remember, whoever gets a reward is going to be more invested in making this new sale happen.

There are three ways you can split up rewards: 

The existing customer gets rewarded (One-Sided: Referrer Only)

Pros:

• Referral rewards increase customer referrals to your business.
• Referral incentives generate new leads from happy customers.
• Rewarding customers with incentives strengthens relationships, increases retention, and fosters loyalty.

Cons:

• Reduce the perceived authenticity of the referral as a self-interested promotion rather than a genuine recommendation.
• Decrease the trustworthiness of the referral in the eyes of the new customer.

Best for: Startups and companies aiming to increase brand awareness and sales. They are cost-effective and can acquire new customers. This strategy is most effective when combined with a strong recommendation and a reasonably priced product offer, which can convince the referred friend to make a purchase due to the recommendation from someone they trust and the attractive offer.

Service business application: This works well for newsletter or content-based services where there's no purchase barrier. However, for most service businesses requiring a significant commitment (HVAC installation, dental work, legal services), one-sided rewards often underperform two-sided programs.

The new customer gets rewarded (One-Sided: New Customer Only)

Pros

• Discounts or freebies are a powerful tool to convert prospects into customers.
• Referral incentives offered to the referred friend can increase the likelihood of them moving further down the sales funnel.

Cons

• Without a clear incentive, the current customers may not have any motivation to refer others, which could result in missed opportunities for growth and new customer acquisition
• Loyalty and love for the brand may not be enough for customers to actively share their experience with others.

Best for: Businesses that use subscription models, frequent purchases, or offer luxury products/services. By offering incentives, interested prospects are encouraged to make a purchase and hopefully become long-term customers. Although this approach may result in a lower number of referrals, it can lead to a larger customer base.

Service business application: Medical practices and wellness services (med spas, physical therapy, chiropractic) sometimes use this approach because healthcare referral regulations can restrict rewarding the referrer. The new patient discount helps overcome the hesitation of trying anew healthcare provider.

Both customers get rewarded (Two-Sided Rewards)

Pros

• Increase the likelihood of successful referrals by giving both parties a compelling reason to participate.
• Make the process more effective by allowing advocates to share without appearing self-serving.
• Drive higher conversion rates because the new customer has both social proof (friend recommendation) and financial incentive (discount or reward)

Cons

• Offering incentives to both parties can be costly for some companies that may not have the resources to provide them.
• Keeping track of rewards for both the referrer and the referred friend requires more effort and resources, which could become burdensome for some businesses

Best for: All types of businesses, particularly those with sufficient resources to offer rewards to both parties. Using a referral software tool can help companies track important metrics and optimize their referral program.

Service business application: Two-sided rewards are the gold standard for most service businesses because:

• The existing customer feels appreciated and compensated for their recommendation
• The new customer gets a risk-free trial of your service at a discount
• Both parties win, creating a positive association with your brand

Example structure for HVAC company:

• Existing customer: $100 gift card when referral completes installation
• New customer: $200 off their first system installation

Service Business Referral Rewards: A Complete Guide

Service businesses face unique challenges and opportunities when it comes to referral rewards. Unlike e-commerce or SaaS companies where purchases are frequent and low-friction, service businesses typically deal with:

• Higher ticket prices ($500-$10,000+ per job)
• Infrequent purchases (once every few years or when emergencies happen)
• Multiple decision makers (homeowners, property managers, business owners)
• Offline touch points (phone calls, in-person consultations, field visits)
• Longer sales cycles (from inquiry to completed job)

Best Referral Rewards for High-Ticket Service Businesses

When your average job value is $2,000-10,000+, your referral rewards need to reflect that value while remaining sustainable.

Cash and Gift Cards: The Top Choice for High-Ticket Services

For HVAC installations, major plumbing work, roofing, legal services, and other high-ticket offerings, cash or gift cards typically out perform discounts.

Here's why:

1.      Immediate gratification: Customer gets rewarded right away, not months or years later when they might need service again

2.      Universal appeal: Works even when the referrer isn't the direct customer (landlords, property managers, business owners)

3.      Memorable impact: A $100-250 gift card feels substantial and creates a lasting positive association

4.      Easy to communicate: "Refer a friend, get $150" is simple and compelling

Recommended reward values by service type:

• HVAC(installations, major repairs): $100-250 per referral
• Plumbing(major work, remodels): $75-150 per referral
• Roofing: $150-300 per referral
• Legal services: $200-500 per referral (depending on case value

Percentage-Based Rewards for Variable Services

If your service business offers a wide range of services at different price points, consider percentage-based rewards:

• 5-10% of job value for services under $2,000
• $100-300 flat fee for jobs over $2,000 (percentage can get expensive)
• 10% cash back for small repairs ($50-200 jobs = $5-20 reward)
• $100 gift card for water heater replacement ($1,500 job)
• $150 gift card for bathroom remodel ($5,000+ job)

Lifetime Commission Rewards for Recurring Service Businesses

If your service business has recurring revenue (monthly service contracts, subscription-based offerings, ongoing maintenance plans),lifetime commission structures can be incredibly powerful.

How Lifetime Commissions Work:

Instead of a one-time reward, the referrer earns a percentage of every payment the referred customer makes—for as long as they remain a customer.

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Example: Waste management/trash pickup service

• Customer pays $40/month for service
• Referrer earns 5% lifetime commission = $2/month
• If customer stays for 2 years, referrer earns $48 total from that one referral
• If referrer brings in 10 customers, that's $480/year in passive income

Why This Works for Service Businesses:

1. Aligns incentives: Referrers want their friends to stay happy customers (because their commission continues)
2. Quality over quantity: Referrers focus on well-matched referrals, not just volume
3. Affordable for you: You're paying a small percentage of revenue you wouldn't have had anyway
4. Compounding motivation: As referrers accumulate customers, their monthly passive income grows

Best for:

• Lawncare and landscaping (recurring maintenance)
• Pest control (monthly/quarterly service)
• HVAC maintenance contracts
• Pool cleaning and maintenance
• Security/alarm monitoring
• Waste management

Recommended commission rates:

• Low-cost recurring services ($20-50/month): 5-10% lifetime commission
• Mid-cost recurring services ($100-300/month): 3-7% lifetime commission
• High-cost recurring services ($300+/month): 2-5% lifetime commission

Offline/Online Hybrid Reward Strategies

Most service businesses operate in both offline and online worlds. Your customers might:

• Find you through a Google search
• Get a recommendation in person at the neighborhood BBQ
• Call you directly after seeing your truck in a neighbor's driveway
• Message you on Facebook

Digital Tracking: Unique Referral Links

Every customer gets a unique referral link they can share via; text, email, social media (Facebook, Nextdoor, other neighborhood groups), WhatsApp or other messaging apps.

Offline Tracking: Name-Based Attribution

For in-person referrals, ReferralHero's name-based attribution system lets customers simply say: "John Smith referred me."

The system automatically matches the name to your customer database and credits the referral.

Physical Touchpoints: QR Codes

Print QR codes on; business cards, service completion receipts, door hangers, vehicle magnets or yard signs at job sites.

Example Hybrid Strategy for HVAC Company:

1. Digital: Customer gets unique referral link via email after successful installation
2. Physical: Technician leaves door hanger with QR code at neighbor's houses
3. In-person: Customer mentions your company at neighborhood meeting, friend calls and says "Sarah Johnson recommended you"
4. Social: Customer shares their experience in neighborhood Facebook group with referral link

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Retention-Focused Rewards: Monthly Recurring vs. One-Time

Service businesses should think strategically about whether rewards should be one-time or recurring based on customer behavior patterns.

One-Time Rewards: Best For

• Emergency services (plumbing leaks, AC breakdowns)
• Project-based work (remodeling, installations)
• Annual or infrequent services (tax preparation, home inspections)

Why: Customer purchases are unpredictable and infrequent, so a one-time reward makes sense.

Recurring Rewards: Best For

• Monthly maintenance contracts
• Subscription-based services
• Scheduled recurring services (lawn care, pool cleaning, pest control)

Why: You want to incentivize referring customers who will stick around long-term.

Multi-Step Rewards for Complex Sales

If your service business has a longer sales cycle with multiple touchpoints before purchase, consider multi-step rewards:

Step 1: Qualified Lead

• Referral books a consultation/estimate
• Referrer receives: Small reward ($10-25 gift card, branded swag)
• Why: Keeps referrer engaged even if lead doesn't convert immediately

Step 2: Completed Purchase

• Referral completes service and pays
• Referrer receives: Main reward ($100-250 gift card)
• Why: Main incentive aligns with your actual revenue

Example: HVAC Company Multi-Step Structure

• Friend requests free estimate → Referrer gets $25 gift card
• Friend completes AC installation → Referrer gets additional $150 gift card
• Total potential reward: $175

Seasonal and Promotional Reward Strategies

Service businesses often have seasonal peaks and valleys. Strategic use of referral rewards can help smooth out demand.

Boost Slow Seasons:

Winter for Lawn Care Companies:

• Regular reward: $50 gift card
• Winter promotion (Dec-Feb): $100 gift card + free first mowing in spring
• Goal: Build customer pipeline for busy spring season

Summer for HVAC (Heating):

• Regular reward: $100 gift card
• Summer promotion (Jun-Aug): $150 gift card for furnace/heating referrals
• Goal: Generate off-season revenue and reduce fall rush

Back-to-School for Dental:

• Regular reward: $75 gift card
• August promotion: $100 gift card + free whitening for referrer
• Goal: Capitalize on parents getting kids ready for school

Holiday Promotions:

Create limited-time bonuses that generate urgency:

Example: Plumbing Company Holiday Campaign

• November15 - December 31
• Normal reward: $100 gift card
• Holiday bonus: Refer 3 customers, get $400 total ($100 + $150 + $150)
• Tiered structure encourages multiple referrals during slow season

Event-Based Promotions:

Tie rewards to local events or company milestones:

• Company anniversary: Double rewards month
• New service area opening: Bonus rewards for first 50 referrals in new area
• New service launch: Special reward for referring customers who try new service
• Community events: Bring business card to local fair/event for bonus entry

Preventing Fraud and Managing Reward Costs

Service businesses need to protect against referral fraud while keeping the program attractive.

Common Fraud Scenarios:

1. Self-referral: Customer tries to refer themselves using a different name/email
2. Fake referrals: Customer creates fake leads to earn rewards
3. Collusion: Customer and "referral" split the reward without genuine interest
4. Gaming the system: Taking advantage of promotional periods inappropriately

Fraud Prevention Strategies:

Automatic Detection:

• Referral Hero tracks IP addresses to catch self-referrals
• Flags unusually high referral activity from single source
• Monitors for patterns (same IP, similar names, rapid succession)

Verification Requirements:

• Reward only after payment is received (not just when booked)
• Require referral to complete service before issuing reward
• Wait until after refund/cancellation period

Manual Review for High-Value Rewards:

• Set threshold ($500+ in lifetime rewards from one customer)
• Review referral patterns before approving large payouts
• Call to verify referrals if something seems suspicious

Clear Terms and Conditions:

• Define what counts as valid referral
• State that fraudulent referrals forfeit all rewards
• Reserve right to investigate suspicious activity

Cost Management:

Set Monthly or Quarterly Caps:

• Limit total rewards per customer per month
• Example: Maximum $500 in referral rewards per quarter per customer
• Prevents runaway costs from super-advocates

‍Tiered Reward Structure:

• First 3 referrals: $100 each
• Referrals 4-10: $75 each
• Referrals 11+: $50 each
• Rewards consistent effort without infinite scaling

Budget-Based Pauses:

• Set annual referral reward budget
• Pause program when budget is reached
• Or switch to lower-value rewards (swag instead of cash)

Calculating the Right Reward Value for Your Service Business

One of the most common questions service business owners ask: "How much should I actually offer?"

The answer depends on three key numbers:

1. Customer Lifetime Value (LTV)
2. Customer Acquisition Cost (CAC)
3. Average job/project value

The Simple Formula

Recommended referral reward range: 10-20% of your typical CAC OR 2-5% of customer LTV

Step-by-Step Calculation

Step 1: Calculate Your Customer Lifetime Value

Formula: (Average purchase value) × (Number of purchases per year) × (Average customer lifespan in years)

Example - HVAC Company:

●       Average installation: $6,000

●       Average customer gets 1 major service every 5 years

●       Plus annual maintenance: $200/year

●       Customer life span: 15 years

LTV = $6,000 + ($200 × 15) = $9,000

Step 2: Identify Your Current Customer Acquisition Cost

Add up what you typically spend to acquire a customer; Google Ads, direct mail, print advertising, radio/billboard, sales team costs, etc.

Example - HVAC Company:

• GoogleAds: $150 per customer
• Direct mail: $50 per customer
• Radio ads: $100 per customer
• Average CAC: $300

Step 3: Calculate Recommended Reward Range

Method 1: Based on CAC

10-20% of $300 CAC = $30-60 reward

Method 2: Based on LTV

2-5% of $9,000 LTV = $180-450 reward

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Choose the sustainable option: For most service businesses, the CAC-based approach gives you a conservative starting point. As you see results, you can increase toward the LTV-based range.

Recommended starting reward: $50-100 (split between referrer and new customer, or all to referrer)

Industry-Specific Examples

Dental Practice:

Average patient LTV: $3,000 (over 10 years)

Current CAC: $200 (marketing + front desk time)

Recommended reward: $40-100

Suggested structure: $75 gift card to referrer + 20% off first cleaning for new patient

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Plumbing Company:

Average customer LTV: $2,500 (emergency calls + annual maintenance)

Current CAC: $150 (ads + call handling)

Recommended reward: $30-75

Suggested structure: $50 gift card to referrer + $50 off first service for new customer

Lawn Care/Landscaping Service:

Average customer LTV: $4,000 (monthly service over 3 years)

Current CAC: $100 (online ads + sales calls)

Recommended reward: $20-50

Suggested structure: $30 to referrer + free first mowing for new customer

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HVAC Installation:

Average customer LTV: $9,000 (installation + maintenance)

Current CAC: $300 (ads + sales visits)

Recommended reward: $60-180**

Suggested structure: $150 gift card to referrer + $200 off installation for new customer

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Med Spa:

Average client LTV: $5,000 (repeat treatments over 2 years)

Current CAC: $250 (social media ads + consultation)

Recommended reward: $50-125

Suggested structure: $100 gift card to referrer + free add-on service for new client

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When to Increase Rewards

Start conservatively, then increase based on results:

Increase rewards if:

• Program generates consistent high-quality referrals
• Referred customers have higher LTV than average
• Referral CAC is significantly lower than other channels
• You want to boost referrals during slow season

‍Example progression:

Month1-3: $50 reward, measure results

Month4-6: $75 reward if conversion rate is strong

Month7+: $100 reward or tiered structure (first referral $50, second $75, third+$100)

The ROI Perspective

Here's why referral rewards are worth it:

Traditional HVAC Marketing:

Spend $300 CAC > Get 1 customer > Pay $300 upfront (whether they buy or not)

Referral Rewards:

Spend $0 upfront (aside from initial set up) > Get 1 customer (from trusted recommendation) > Pay $150 reward ONLY when customer completes installation > Savings $150 per customer

Bonus: Referred customers have higher retention rates

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Types of Rewards

There are so many different options for rewards - don't get stuck using the first thing that comes to mind.

Below, I'll walk through the most effective reward types for service businesses, with specific examples for HVAC, plumbing, dental, lawn care, and other home service companies.

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Cash / Cashback

While it doesn't stand out, cash is a great incentive if your company centers money like PayPal or a product that people likely won't want two of.

Best for service businesses: High-ticket, infrequent purchases where customers won't need your service again for months or years.

Service business applications:

• HVAC installations
• Roofing projects
• Major plumbing work
• One-time legal services
• Home remodeling

Why it works: When a homeowner refers their neighbor for a $7,000 HVAC installation, they probably won't need another system for 10-15 years. A discount code is useless, but a $150 Visa gift card or PayPal transfer feels like real compensation.

Example: An HVAC company offers $150 cash via directly into their bank account when a referred customer completes an installation. Fast, simple, memorable.

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Gift Cards

Offering a gift card sidesteps the chance that people will buy something they won't remember. It also offers the opportunity for people to choose what they're more likely to use.

Best for service businesses: All service types, especially when you want to give referrers flexibility.

Why gift cards work for service businesses:

• Can be used by anyone (property managers, landlords, business owners who aren't direct users)
• More memorable than cash (people splurge on something special)
• Easy to fulfill via ReferralHero's Tango integration (instant digital delivery)
• Wide selection (Amazon, Visa, restaurant cards, gas cards)

Service business examples:

Plumbing company: $75 Amazon gift card for each completed referral

Why: Universal appeal, easy to send digitally

Dental practice: Choice of $100 Visa gift card or $100 to local restaurants

Why: Patients appreciate local options

Landscaping service: $50 Home Depot gift card

Why: Perfect for homeowners, ties into home improvement

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Total Health Dental Care generated 170+ patient referrals using gift card rewards. Patients could choose their preferred gift card type, making the reward feel personalized.

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Discounts

This is a great option for anything that your customers are likely to buy more than once. However, if you're offering a large purchase like a car or furniture, they aren't going to want a discount code for referrals.

Best for service businesses: Recurring services and businesses where customers need regular appointments or multiple services.

Service business applications:

• Dental cleanings (every 6 months)
• Regular lawn maintenance
• Recurring pest control
• Ongoing pool cleaning
• Pet grooming
• etc.

Why it works: If customers are coming back regularly anyway, a discount on their next visit is valuable and immediate.

Important limitation Discounts DON'T work well for:

• One-time installations (HVAC, roofing)
• Emergency-only services (plumbing emergencies)
• Infrequent services (every 5-10 years)

Service business examples:

Dental practice: 20% off your next cleaning when a referred patient completes their first visit

Why: Patients come every 6 months, discount is usable

Landscaping: One free mowing for each referred customer who signs up for monthly service

Why: Regular customers can use this multiple times

Pet grooming: $20 off your next grooming appointment per referral

Why: Customers return monthly/quarterly

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Store Credit / Account Credit

Store credit is a great way to give customers something they can use more than once. It also encourages them to keep coming back to your store!

Best for service businesses: Multi-service companies where customers might use different services over time.

Service business applications:

• Multi-trade companies (HVAC + plumbing + electrical)
• Full-service dental practices (cleanings, whitening, cosmetic work)
• Med spas (multiple treatment types)
• Auto service centers (oil changes, repairs, detailing)

Why it works: Credit can be applied to ANY service you offer, giving customers flexibility.

Service business examples:

Full-service HVAC company: $100 account credit for referrals for annual maintenance, filter replacements, future repairs, etc.

Med spa: $75 service credit for each referred client for any treatment (Botox, facials, laser treatments)

Multi-service plumbing company: $50 account credit can be used toward drain cleaning, water heater service, toilet repairs, etc.

Key advantage: Unlike discounts (percentage-based), credit can accumulate. If a customer refers 5 people, they have $250-500 in credit to use whenever they need.

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Free Products or Services

This will not only get people excited to share your business, but it will act as another way to get your products in front of people.

Best for service businesses: Companies that offer add-on services or products with low cost but high perceived value.

Service business applications: Free air filter replacement (HVAC), Free teeth whitening (dental), Free mulch application (lawn care), Free product included with service (plumbing, home services), etc.

Why it works: The actual cost to you might be $30-50, but the perceived value can be $150-300. This creates an outsized reward feeling without high costs.

Service business examples:

HVAC company: Free smart thermostat installation ($200 value, $50 cost). Referred customer completes installation → Referrer gets free smart thermostat installed

Dental practice: Free teeth whitening treatment ($300 value, $50 cost). Referred patient completes first visit → Referrer gets free whitening at next cleaning

Landscaping: Free fertilizer treatment ($100 value, $25 cost). Referred customer signs up for season → Referrer gets free fertilizer application

Pool cleaning: Free chemical balancing service ($75 value, $15 cost). Referred customer signs up → Referrer gets free chemical service

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Key to success: Choose rewards with high perceived value but low actual cost to maximize impact.

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Lifetime Commissions

For recurring service businesses, lifetime commissions create long-term passive income for referrers.

How it works: Instead of a one-time reward, referrer earns a small percentage of every payment the referred customer makes—forever.

Best for service businesses: Monthly recurring services (lawn care, pest control, pool cleaning), Subscription-based maintenance contracts (HVAC, security systems) or Ongoing care services (pet sitting, cleaning services).

Why it works:

• Referrers become invested in customer satisfaction (their income depends on retention)
• Rewards quality referrals over quantity
• Creates compounding motivation as income grows

‍Service business example:

Lawn care company:

1. Customer pays $150/month for lawn maintenance
2. Referrer earns 5% = $7.50/month
3. If customer stays 2 years, referrer earns $180 total
4. If referrer gets 10 customers, that's $900/year in passive income

Customer pays $150/month for lawn maintenance

• Referrer earns 5% = $7.50/month
• If customer stays 2 years, referrer earns $180 total
• If referrer gets 10 customers, that's $900/year in passive income

Recommended commission rates:

• Recurring services under $100/month: 5-10%
• Recurring services $100-300/month: 3-7%
• Recurring services over $300/month: 2-5%

Branded Merch / Swag

If you can choose an item or a logo that people will use and will spark conversation, this reward can help create even more buzz.

Best for service businesses: Budget-conscious programs or as lower-tier rewards in tiered structures.

Why it works (when done right):

• Low cost when ordered in bulk ($10-25 per item)
• Creates ongoing brand visibility
• Works well for first referral in tiered program

Important: Swag only works if it's high-quality and useful. A cheap pen won't motivate anyone. A premium branded Yeti tumbler, toolkit, or emergency kit will.

Service business examples:

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HVAC company: Premium branded toolkit for 3rd referral

Contents: Flashlight, multi-tool, tape measure, all HVAC branded

Cost: $25, perceived value: $75

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Plumbing company: Emergency kit for homeowners

Contents: Flashlight, basic tools, emergency contact magnet

Cost: $20, perceived value: $60

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Landscaping : High-quality branded gear

Options: Yeti-style tumbler, gardening gloves set, outdoor blanket

Cost: $20-30, perceived value: $50-75

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Best practice: Use swag as part of a tiered program, not as the primary reward. Example: First referral = swag, second referral = $50 gift card, third referral = $100 gift card.

Subscriptions

A free subscription period is a great incentive for both the new and returning customer. It encourages long-time, repeat engagement.

Best for service businesses: Businesses offering monthly subscription or membership models.

Service business applications could be maintenance plans, subscriptions, memberships or contracts.

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Service business example:

HVAC company with maintenance plan:

• Regular price: $25/month for annual maintenance, priority service, discounts
• Referral reward: 3 free months of maintenance plan
• Cost to company: $75
• Value to customer: $75 + peace of mind

Landscaping subscription:

• Referrer gets: One free month of service
• New customer gets: First month free
• Result: Both customers locked into recurring revenue

Donations

If your company is focused on pushing values over profit, making donations in an ambassador's honor can have a lasting effect both on the world and on your brand loyalty.

Best for service businesses: Values-driven companies, industries where direct cash rewards may seem inappropriate, or when targeting socially-conscious customers.

Service business applications could be medical and healthcare services, legal services (especially in sensitive practice areas), financial services or pretty much any service business with strong community ties.

How it works:

1. Customer refers a friend
2. Company donates $50-100 to charity of customer's choice
3. Customer feels good about referral without it being about money

Service business example:

Dental practice: $75 donation to local schools or charities for each referral

• Appeals to families and community-minded patients
• Strengthens local reputation

Medical practice: Bernard Cannabis Center uses community-focused rewards to generate 10+ new patient referrals per month.

Legal firm: Donation to cause related to practice area

• Family law → domestic violence prevention
• Environmental law → conservation organizations

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Best practice: Let referrers choose from 3-5 pre-approved charities. This personalizes the reward while maintaining control.

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Exclusive Sales Access

Giving customers early access to sales or exclusive discounts can make them feel like they're part of an exclusive community and encourage them to keep coming back.

Best for service businesses: Businesses that run seasonal promotions or have limited availability.

Service business applications include seasonal service specials (spring HVAC tune-ups, fall gutter cleaning), new service launches, premium service tiers, limited appointment slots, etc.

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Service business examples:

HVAC company: Referrers get first access to fall furnace tune-up special

• Regular price: $199
• Early access price for referrers: $149
• Appointment priority before public announcement

Dental practice: Referrers get exclusive access to new cosmetic procedures at introductory pricing

Landscaping: Referrers get priority scheduling during peak season

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Why it works: Makes referrers feel valued and VIP while costing you little to nothing.

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Free Shipping

Shipping costs can be a major deterrent for customers, so offering free shipping as a reward can be a powerful incentive.

Not applicable for most service businesses (since you deliver service in person), BUT can work for:

• Companies that sell products alongside services
• Medical/dental practices that sell at-home care products
• Businesses with e-commerce components

Example: Med spa that sells skincare products online could offer free shipping on product orders for referrers.

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Partnership Perks

Partnering with other brands to offer joint promotions or exclusive discounts can expand your customer base and provide added value for your existing customers.

Best for service businesses: Local businesses looking to create community partnerships.

How it works: Partner with complementary (non-competing) businesses to offer cross-promotional rewards.

Service business examples:

HVAC company partners with plumbing company:

1. Customer refers friend for AC installation
2. Gets $100 toward plumbing services
3. Both businesses gain customers

Dental practice partners with med spa:

1. Patient refers friend for dental work
2. Gets $75 toward facial or Botox at med spa
3. Cross-promotion between complementary health/beauty services

Landscaping company partners with landscape supply store:

1. Customer refers friend for lawn service
2. Gets $100 gift card to local landscape supply
3. Homeowner gets something useful, lawn care builds local partnership

Oregon Shines achieved 120%+ referral growth using $25 e-gift cards that customers could spend with multiple partner businesses.

Best practice: Partner with businesses your customers already use and trust. This adds value without additional cost to you.

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Limited Products

Creating limited edition or exclusive products that are only available to loyal customers can create a sense of exclusivity and encourage repeat purchases.

Best for service businesses: Companies with strong brand loyalty and customers who identify with your brand.

Service business applications could include exclusive branded merchandise, limited seasonal offerings or VIP-only service packages.

Service business examples:

High-end HVAC company: Limited-edition branded premium toolkit only available to customers who refer 5+ people. This creates collectable status.

Dental practice: Exclusive membership tier where top referrers get "VIP" status. This might include priority scheduling, exclusive perks or special events.

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VIP Experiences

Offering VIP experiences like backstage tours, exclusive events, or meet-and-greets can make customers feel like they're part of a special group and deepen their loyalty to your brand.

Best for service businesses: High-end service providers or businesses targeting affluent customers.

Service business applications could include exclusive customer appreciation events, behind-the-scenes tours or special access to owner/leadership.

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Service business examples:

Premium HVAC company: Annual "Top Referrer Dinner" where you take your top referrers to a nice restaurant. This creates community and deeper loyalty.

Med spa: VIP treatment day for top referrer where they would get the opportunity to receive multiple premium treatments. Plus there could be a social media photo opportunity and could generate additional word-of-mouth.

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First Access to Products

Giving loyal customers early access to new products before they're available to the general public can generate excitement and create a sense of exclusivity.

Best for service businesses: Businesses launching new services or expanding offerings.

Service business examples:

HVAC company launching smart home integration:

• Top referrers get first access to new smart thermostat installation service
• Can book before public launch
• Receive special introductory pricing

Dental practice adding cosmetic services:

• Referrers get first access to new teeth whitening technology
• Free trial or heavily discounted

Med spa launching new treatment:

• Top referrers try new treatment before official launch
• Provide feedback
• Get exclusive pricing

Reward Triggers: When and How Often to Pay Rewards

It’s SUPER important that you’re smart about when and how often you offer rewards. You want to make sure that the company is getting value out of the referral and that there is enough incentive for people to continue inviting friends to come along. Is simply clicking a link enough to get a reward, or does the new customer have to make a purchase? Does the size of the purchase have any effect on the rewards? Are the rewards the same every time? 

All these questions will help you shape your reward structure. Some options to consider are: 

When to Trigger Rewards

For most service businesses, reward ONLY when: new customer completes their first paid service!

Why this matters: Service businesses can't afford to pay rewards for no-shows, cancellations, or people who book but never show up.

Example triggers:

HVAC: Reward after installation is complete and paid

Dental: Reward after first appointment is completed and paid

Plumbing: Reward after service is completed and paid

Landscaping: Reward after first month of service (recurring customers)

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Multi-step triggers for complex sales:

For high-ticket services with longer sales cycles, consider rewarding at multiple stages:

Stage 1: Qualified Lead

• Referral books consultation/estimate
• Referrer receives: Small reward ($10-25)

Why: Keeps referrers engaged even if lead doesn't convert immediately

Stage 2: Completed Service

• Referral completes service and pays
• Referrer receives: Main reward($100-250)

Why: Main incentive aligns with your actual revenue

• HVAC installations (estimate →installation)
• Major plumbing projects(consultation → completed work)
• Dental cosmetic work (consultation→ treatment)
• Legal services (consultation →retained client)

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How Often to Reward

One-Time Rewards

Most service businesses should start with one-time rewards:

• Referrer earns reward once per referral
• Simple to understand and manage
• Works for both one-time and recurring services

When to use: Starting out, high-ticket services, project-based work

Recurring Rewards (Lifetime Commissions)

For subscription-based or recurring service businesses:

• Referrer earns percentage of each payment
• Continues as long as referred customer remains active
• Creates long-term incentive alignment

When to use: Monthly service contracts, maintenance agreements, recurring revenue models

Example:

Lawn care customer refers neighbor

• Neighbor signs up for $150/month service
• Referrer earns 5% = $7.50/month ongoing
• If neighbor stays for 2 years,referrer earns $180 total

Tiered Reward Structure

This is a great way to keep customers invested in getting more and more referrals for you. It can get complicated, so make sure you have a foolproof way to keep track of how many referrals are coming in.

How tiered rewards work:

Rewards increase based on the number of successful referrals.

Example: HVAC Company Tiered Structure

• 1st referral: $75 gift card
• 2nd referral: $75 gift card
• 3rd referral: $100 gift card
• 4th-5th referrals: $125 gift card each
• 6+ referrals: $150 gift card each

Why this works:

• Gets customers started with reasonable reward
• Increases motivation as they see progress
• Rewards your best advocates more generously
• Creates gamification element

Alternative tiered approach: Milestone rewards

Instead of increasing every reward, offer bonus rewards at mile stones:

Example: Dental Practice Milestone Structure

• Each referral: $50 gift card
• 3rd referral milestone: Bonus $50(total $100 for 3rd)
• 5th referral milestone: Bonus $100(total $150 for 5th)
• 10th referral milestone: Bonus$250 (total $300 for 10th)

Multi-Step Rewards Structure

If you're worried about handing out too big of a reward for bringing in customers that don't make big purchases, this is perfect. You can give out a smaller reward when the referral comes in and a larger one when they spend a certain amount of money.

How multi-step works:

Step 1: Initial action (booking, consultation, estimate)

• Referral takes first step
• Referrer gets: $10-25 reward

Step 2: Qualified action (first service completed)

• Referral completes first service
• Referrer gets: $50-100 additional reward

Step 3 (Optional): High-value action (major project, recurring customer)

• Referral becomes recurring customer or completes major project
• Referrer gets: Bonus $50-150reward

Why this works:

• Rewards referrers immediately(keeps them engaged)
• Main reward tied to actual revenue
• Bonus for long-term customers encourages quality referrals

Contests or Drawings

To drum up lots of excitement and momentum around your referral program, consider entering customers into a draw or competition that rewards bringing in more people than anyone else.

How it works:

Option 1: Competition

• Top referrer each month/quarter wins prize
• Prize: $500 gift card, free year of service, premium experience

Option 2: Drawing

• Each referral = entry into monthly drawing
• More referrals = more chances to win
• Prize: $300-500 value

Option 3: Combined approach

• Regular rewards continue (everyone gets something)
• PLUS quarterly contest for top referrers
• Creates both consistent motivation and competitive excitement

Service business examples:

HVAC company quarterly contest:

• Everyone gets regular $100 per referral
• Top referrer each quarter gets $500 bonus + free annual maintenance for life
• Creates friendly competition

Dental practice monthly drawing:

• Each referral = entry to win $250 gift card
• Regular rewards still apply
• Monthly winner announced on social media

Best practices:

• Keep regular rewards in place(contests are bonus, not replacement)
• Promote contest heavily to create excitement
• Share winners publicly (with permission) to build credibility

Customer of the Month

Continuing with a bit of competition, naming a customer of the month helps people feel noticed and appreciated. It also turns referrals into more of a game.

How it works:

• Highlight top referrer each month
• Feature on website, social media, in newsletter
• Offer special recognition + bonus reward

Service business examples:

HVAC company:

• "Referral Champion of the Month"
• Featured on website and Facebook
• Gets branded premium swag + $100bonus

Lawn care service:

• "Neighborhood Champion"
• Featured in newsletter
• Free premium service (aeration, fertilization) + $75 bonus

Why this works:

• Public recognition motivates some customers more than money
• Creates social proof for program
• Generates content for marketing
• Builds community around your brand

Reward Structures: How to Set Up Your Program

Beyond choosing reward types and triggers, you need to decide on the overall structure of your referral program. Here are proven structures that work for service businesses. 

Double-Sided Rewards ("Give and Get")

How it works: Both the referrer and the new customer receive a reward.

Best for: All service businesses that want maximum participation and conversion.

Example structures:

HVAC Installation:

• Referrer gets: $150 gift card when referral completes installation
• New customer gets: $200 off their first installation
• Total cost: $350 per acquisition
• Value: Customer LTV of $8,000-12,000 makes this extremely profitable

Dental Practice:

• Referrer gets: $75 gift card when referral completes first visit
• New patient gets: 20% off first cleaning
• Total cost: $115 per acquisition
• Value: Patient LTV of $2,500-4,000 makes this sustainable

Lawn Care:

• Referrer gets: $40 gift card when referral signs up for monthly service
• New customer gets: First month free ($150 value)
• Total cost: $190 per acquisition
• Value: Customer LTV of $2,000-3,000 over 2 years makes this work

Why double-sided works:

• Referrer feels compensated for their effort
• New customer gets risk-free trial
• Both parties create positive association with your brand
• Higher conversion rates than one-sided programs

When to use: When you have the budget to reward both parties and want to maximize conversions. This is the gold standard for most service businesses.

One-Sided Rewards (Referrer Only) 

How it works: Only the person making the referral gets rewarded.

Best for:

• Service businesses with limited budgets
• Companies with very strong products/reputation (new customers don't need incentive)
• B2B services where new customer discount seems inappropriate

Example structures:

Legal Services:

• Referrer gets: $200 gift card when referral retains firm
• New client gets: Nothing(professional services, discount may seem inappropriate)
• Why: Legal clients choose based on expertise, not discounts

Property Management:

• Referrer gets: $100 when referral signs contract
• New client gets: Nothing (commercial relationship)
• Why: Business decisions, not price-driven

When to use: Professional services, B2B, or when your service quality sells itself.

One-Sided Rewards (New Customer Only)

How it works: Only the new customer receives a discount or incentive.

Best for:

• Industries with regulations against rewarding referrers (some healthcare, financial services)
• Luxury brands that don't want to appear to "pay" for referrals
• Situations where organic word-of-mouth is strong

Example:

• Medical practice offers new patients 20% off first visit
• Referrer gets nothing tangible (relies on altruism)

Limitation: Lower referral volume since existing customers lack direct motivation.

When to use: Regulatory restrictions or when targeting customers who refer altruistically.

Tiered Rewards

How it works: Rewards increase as referrers bring in more customers.

Best for: Service businesses wanting to create super-advocates and reward consistent referrers more generously.

Example structure for plumbing company:

1. Tier 1 (1-2 referrals): $50 gift card per referral
2. Tier 2 (3-5 referrals): $75 gift card per referral
3. Tier 3 (6-10 referrals): $100 gift card per referral
4. Tier 4 (11+ referrals): $125 gift card per referral

Plus: VIP status, priority scheduling, exclusive perks

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Alternative: Milestone-based tiers

Instead of permanent tiers, offer one-time milestone bonuses:

HVAC Company Milestone Structure:

• Each referral: $100 gift card
• 3rd referral bonus: $50 extra
• 5th referral bonus: $100 extra
• 10th referral bonus: $300 extra +VIP customer status

Why tiered works:

• Gamification increases engagement
• Rewards best advocates more generously
• Creates progression and goals
• Can be more cost-effective than flat high rewards

When to use: When you want to encourage multiple referrals and create tiers of engagement.

Multi-Step Rewards

How it works: Referrers earn rewards at multiple stages of the customer journey. 

Best for: Service businesses with longer sales cycles or multiple decision points.

Example structure for HVAC installation:

Step 1: Referral books free estimate

• Trigger: Referral schedules in-home estimate
• Reward: $25 gift card to referrer
• Why: Keeps referrer engaged, shows appreciation even if sale doesn't close

Step 2: Referral completes installation

• Trigger: Installation finished and paid
• Reward: Additional $125 gift card to referrer
• Why: Main reward aligns with actual revenue

Total potential: $150 per converted customer

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Example structure for dental practice:

Step 1: Referral books first appointment: $20 gift card

Step 2: Referral completes first visit: Additional $55 gift card

Step 3: Referral becomes regular patient (3+ visits in a year): Additional $25 gift card

Total potential: $100 for long-term patients

Why multi-step works:

• Immediate gratification for referrer (Step 1 reward)
• Main reward tied to actual revenue(Step 2)
• Bonus for quality referrals (Step3)
• Keeps referrers engaged through longer sales cycle

When to use: High-ticket services with consultations, estimates, or longer decision cycles.

Bump Rewards

How it works: Higher reward for first referral, than standard reward for subsequent referrals. 

Best for: Jumpstarting participation and getting customers to make their first referral.

Example structure for lawn care company:

1st referral: $75 gift card

2nd+ referrals: $50 gift card each

Why: The bigger first reward gets people over the hump of making their first referral. Once they've done it once, they're more likely to continue.

Alternative bump structure:

1st referral: $100 gift card

2nd-5th referrals: $60 gift card

6th+ referrals: $75 gift card (small bump to maintain momentum)

When to use: When you want to drive initial participation and overcome hesitation to start referring.

Multiplier Rewards

How it works: Reward value changes based on the value of what the referred customer purchases.

Best for: Service businesses with a wide range of service types and price points.

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Example structure for full-service plumbing company:

• Small jobs ($100-500): $30 gift card
• Medium jobs ($500-1,500): $60 gift card
• Large jobs ($1,500-3,000): $100 gift card
• Major projects ($3,000+): $150 gift card

Why multiplier works: 

• Incentivizes referrers to think about which friends need major work
• Keeps rewards proportional to value generated
• Rewards stay sustainable as percentage of revenue

Alternative: Percentage-based

Flat 5% of job value up to maximum of $200

• $500 job = $25 reward
• $2,000 job = $100 reward
• $5,000+ job = $200 reward (capped)

When to use: Service businesses with variable pricing or multiple service offerings at different price points.

Contest or Drawing

How it works: In addition to (or instead of) standard rewards, referrers enter contests or drawings to win larger prizes.

Best for: Creating excitement and buzz, especially during launch or seasonal promotions.

Example structure for dental practice:

Regular program (ongoing):

• Every referral: $50 gift card

Quarterly contest (added layer):

• Most referrals in quarter: $500 grand prize
• 2nd place: $300
• 3rd place: $150
• Creates competitive element

Alternative: Drawing instead of competition

Regular program (ongoing):

• Every referral: $50 gift card

Monthly drawing:

• Each referral = 1 entry
• Winner receives: $300 spa day package
• Everyone has chance to win regardless of total referrals

When to use:

• Program launches (create initial excitement)
• Seasonal slow periods (boost referrals during slow months)
• Special occasions (anniversary, milestones)
• In addition to regular rewards, not replacement

Best practice: Always maintain your standard rewards. Contests are bonus motivation, not the core program.

Whatever you end up doing, make sure it fits with your customer base and how likely they are to engage with your program.

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10 Examples of Referral Rewards

1. Cash Commission
Sybill's referral program initially rewarded users with a $10 cash reward for each successful sign-up from their referral link, valid until April 30th, 2022. However, they later switched to a commission-based model and now offer a commission of 20% of the ACV (Annual Contract Value) of accounts referred to the app. This incentivizes existing users to refer as many people as possible, with no limit on the number of referrals they can make. 

Application for service businesses: High-value B2Bservice companies (IT services, consulting, commercial services) can use percentage-based commissions effectively because contract values are high enough to make percentages meaningful.

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2. Tiered Rewards
The referral program of Outlier comprises multiple tiers of referral rewards and incentives, which are determined by the number of successful referrals. Despite its complexity, this approach presents a chance for customers to become committed members of Outlier's referral marketing program. 

For the first referral, customers can access a sportsbook bonus code. If they reach three successful referrals, they receive a free month of Outlier Premium. When they get eight referrals, they will receive $25 in cash, while 15 referrals will earn them an Outlier shirt. For 20 referrals, customers can claim another $25 in cash, and at 25 referrals, they will receive a drink tumbler and stickers. Upon reaching 30 referrals, they will earn an Outlier baseball cap, while 40 referrals will grant them a premium Champion crewneck sweatshirt. If they reach 50 referrals, they will receive $100 in cash, while 75 referrals will earn them a Fanatic jersey. Finally, customers who reach 500 referrals will be rewarded with a trip to Las Vegas or March Madness.

Application for service businesses: Tiered structures work brilliantly for service businesses looking to create super-advocates. An HVAC company could offer increasing rewards from $50 (1st referral) to $150 (5+referrals) with milestone bonuses.

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3. First Access to Products
Parcl understood their customers' needs and desires. They were able to create a prize that’s unique and has a high perceived value to their users. The top 50 contest winners will gain early access to the Parcl v2 to test before anyone else has access. Access will be granted with a Homeowners Association NFT.

Application for service businesses: Offer top referrers first access to new services. Example: An HVAC company launching smart home integration could give top referrers early access to the new service at a special price.

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4. Free Product 
Cheese Therapy contest campaign incentivizes the top referrer with a 1-Year supply of their best-selling Therapy Box, valued at $1,139.00, delivered every month for 12 months! This encourages participants to go out of their way to try and earn the top prize and in turn be a  spokesperson for the brand.

Besides the grand prize, Cheese Therapy also rewards a randomly selected winner with a prize worth $50.00 every day!

Application for service businesses: Offer your service as the reward. A lawn care company could offer free monthly service fora year to their top referrer. A dental practice could offer free cleanings for life.

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5. Discount
Rothy's is a sustainable shoe company that offers a referral program where customers can earn $20 off their next purchase for each referred friend who makes a purchase. The referred friend also gets $20 off their first purchase.

Application for service businesses: Discounts work best for service businesses with frequent repeat purchases. A dental practice offering cleanings every 6 months could offer 20% off next cleaning. A lawn care service with monthly customers could offer one free mowing.

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6. Store Credit
This coffee subscription service offers a referral program that rewards both parties with a $15 credit.

Application for service businesses: Store credit works great for multi-service businesses. An HVAC company offering installation, repair, and maintenance could give $100 account credit that referrers can use for any service.

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7. Gift Cards
Oregon Shines offers double-sided rewards to incentivize both the referrers and the referrals with a $25 e-gift card when the referred friend(s) sign up for the Community Solar program. Oregon Shines sends a reward email with the e-gift card link to both the referrer and the referral after each successful referral conversion.

Result: Oregon Shines achieved 120%+ referral growth using this simple, effective gift card structure.

Application for service businesses: Gift cards are the most versatile reward type for service businesses. They work for all service types and can be fulfilled instantly via ReferralHero's integration with Tango.

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8. Subscriptions
Proton Mail has introduced a referral program to encourage users to invite their friends and family to join and experience a safer internet. The security and privacy features of Proton Mail work best when communicating with people who are also using the service. When a user refers a friend, the friend receives a free month of Proton Mail Plus. If the friend subscribes after their free trial, the user who referred them receives up to$90 of credits towards their subscription. Currently, the referral program is available for Mail Plus, Proton Unlimited, or Visionary plans.

Application for service businesses: Perfect for service businesses with subscription or membership models. HVAC maintenance plans, lawn care subscriptions, pool cleaning memberships can all offer free months as rewards.

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9. Charitable Donations
Ricci Insurance Group attributes its success in building its agency to referrals from existing clients, industry partners, friends, and family. To show gratitude and give back to the community, they launched the Charity Referral Program in April 2020. For each new client they earn through referrals, they donate a set amount of money to a different charity every quarter. They also commit to supporting the charity throughout the quarter through non-financial means, such as volunteering and social media promotion.

Application for service businesses: Perfect for professional services (legal, medical, financial) where direct cash rewards might seem inappropriate. Also great for community-focused businesses wanting to strengthen local ties.

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10. Partnership Perks
Shutterfly's referral program stands out not just for its customizable rewards, but also for the partnership perks it offers. As a company that specializes in personalized photo products and services, Shutterfly partners with its sister brand, Tinypics, which caters to cards, invitations, and announcements. By participating in the referral program, users not only get to enjoy rewards such as a free photo book, a 40% off coupon for Tinypics, or 10 free cards, but also benefit from the strong partnership between the two brands.

Application for service businesses: Partner with complementary local businesses. An HVAC company could partner with a plumbing company to offer cross-promotional rewards. A dental practice could partner with a med spa for beauty/health rewards.

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The Bottom Line

Everyone gets excited about a prize! Your customers are no different. 

As you start fleshing out your referral program, don’t underestimate the value of the perfect rewards system. 

With the right reward, trigger, and tracking system in place, you’ll have referrals rolling in in no time - and maybe even give your customers something they’ll talk about for a long time.

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