How to build a customer referral program in 2025 (+ templates)

Before visiting a new city, you may ask your family members or friends who’ve been there for recommendations on things to do before researching options yourself. While trying your uncle’s favorite pizza spot or checking out your best friend’s go-to park might not be an example of a formalized customer referral program, they share a common truth: If someone you know tells you to try a particular product or service, chances are you’ll at least consider it.

Businesses know word-of-mouth marketing works, so many ask their best customers to share the truth behind their customer experience (CX) and throw incentives in. Customer referral programs can widen your customer base and generate ongoing revenue for your business. But before you build one using a template, set yourself up for success by learning the basics with our guide.

More in this guide:

• What is a referral program?
• Why referral programs are important
• How does a referral program work?
• How to build a customer referral program in 5 steps
• Types of customer referral programs
• 15 examples of customer referral programs
• Frequently asked questions
• Supercharge your growth with a customer referral program

What is a referral program?

Referral marketing is a strategy that uses word-of-mouth techniques to encourage brand advocacy. Businesses often use incentives—such as gift cards, e-commerce “cash-in” points, or branded swag—and loyalty programs to motivate customers to tell their friends, family, and colleagues about their brand, products, or services. Customers who participate in a referral program can spread the word by sharing referral links or discount codes with people in their network.

Why referral programs are important

Referrals are important because they help businesses to forge relationships with new customers. These referred customers can have higher levels of customer trust than other new customers who weren’t referred.

Referral programs leverage the power of word-of-mouth marketing—an incredibly cost-effective approach compared to traditional methods like paid social media campaigns. Referred customers also tend to have higher lifetime values since they come with pre-existing trust and a strong initial impression of your brand.

These programs can also foster a sense of community among existing members. By rewarding these customers for sharing their experiences, you show appreciation for their loyalty and encourage them to become active brand ambassadors.

Customers’ continued advocacy also gives valuable insights into customer behavior and preferences. You can analyze the characteristics of referrals and use that information to track which customers are most likely to refer others in the future.

Benefits of customer referral programs

A well-crafted customer referral program significantly impacts a business’s bottom line. Follow along to learn the three ways a customer referral program can benefit your business.

Build customer trust

With customer retention on the line and online reviews losing 30 percent of their influence on customers between 2020 and 2024 (presumably due to fake reviews), personal referrals and recommendations are more important than ever. Customers may not trust random reviewers but likely trust their friends, family, and colleagues to recommend products or services from favored brands. Plus, customer loyalty is typically stronger for shoppers who buy from a business after a personal recommendation or referral.

Attract new customers at a low cost

A referral marketing strategy allows companies to reach new users simply through word-of-mouth recommendations from happy customers. The only expenses come from any initial paid promotional efforts to kick off your program and the rewards for your customer advocates and prospects. So, referral programs have a lower customer acquisition cost (CAC) than most other digital marketing tactics.

Increase revenue

Customer referral programs are twofold—they focus on both current and future buyers. By encouraging existing and potential customers to buy from them, businesses can improve their bottom line while spending less on paid advertising.

How does a referral program work?

As a customer retention strategy, a customer referral program combines the right technology, products, messaging, and referral incentives to encourage brand loyalty and advocacy.

To create a successful referral program, most businesses will use marketing software and tools—like lead generation software—to track a customer’s shared referral code or link. When a prospect uses that code or link to complete a purchase, the existing customer earns a reward. The new customer can then repeat the referral process with someone from their network, creating a sustainable flow of business.

When your company provides value to customers and prioritizes systems and solutions to improve customer experience, it gains invaluable influence and credibility. People are generally willing to share something if it makes them look or feel good, including their experiences with a brand’s products or services. A referral from a trusted source can also mean a customer is more likely to interact with or purchase from a highly recommended brand.

How to build a customer referral program in 5 steps

When developing your customer experience strategy, prioritize creating and implementing a customer referral program. Preparation is essential to any successful referral campaign, so follow these steps to build and maintain one.

1. Leverage customer referral templates

You can simplify the process of building a customer referral program with the help of customer referral templates. These pre-written messages enable businesses to request and respond to referrals quickly, streamlining customer interactions.

2. Set KPIs and goals

Before you launch a customer referral program, you need to identify the customer experience KPIs you want to track and identify short- and long-term program goals.

A few examples of business goals include:

• Reaching a set number of leads (impressions)

• Gaining a specific number of new social media followers or newsletter sign-ups

• Growing revenue or increasing conversion rate by a certain percentage

Solidify your goals and metrics before publicizing your referral program so you can assess whether or not you’re hitting your targets.

3. Choose incentives and rewards

Do your research and get to know your customers so you can tap into their interests when selecting referral program rewards. Stay within your budget—you don’t want your referral program to cause you to lose money—but provide a variety of incentives to entice different types of customers.

Some popular referral program rewards include:

• Discounts or coupons

• Store credits or points

• Product or service upgrades

• Free products (giveaways) or subscriptions

• Branded swag items

If you’re working with a limited budget and still want to launch a referral program, see if there are any surplus items in your inventory that you can use as rewards.

4. Determine the right channels to promote your program

To attract customers and successful referrals, you should meet your customers where they are. Use customer journey maps to design different avenues or promotion strategies to reach your audiences on their favorite channels.

Every customer is unique, but here are the most common channels consumers use or visit:

• Social media: Share links that lead to your referral program page or a specific sign-up page.
• Live chat: Encourage your agents to share your referral programs with customers during support interactions.
• Email: Create clickable links and shareable messages about your referral program and its rewards.
• Website: Direct current customers to your referral page to set them up with a unique code or link. Write a blog post about your program and share it across your network.
• Phone and customer service: Update your contact center’s IVR software, call center scripts, and training and onboarding materials to include details about your customer referral program. Incorporate program information into support tickets, invoices, and receipts.

Giving your customers multiple channels to share and sign up for your program can boost promotion and reach.

5. Review and improve

Some of the best customer experience management advice is this: Leverage customer data to keep up with emerging communication channels, tools, and software. Regularly measure customer experience and other key metrics to identify areas of improvement. By investing in solutions with reporting and analytics, you can continually refine processes and exceed (current and future) customer expectations.

Types of customer referral programs

Customer referral programs can be a lead generation goldmine, but the success of your referral program depends on its structure. Review these customer referral program ideas to find the best program structure for your brand, products, and audience.

Referral reward programs

Customer referral reward models focus on how recipients receive incentives, not who receives them. These are the main types of referral reward programs:

• Standard reward program: Standard rewards programs provide the same incentive for every referral, no matter who makes the referral. Your customers receive their referral reward once the referred person completes a purchase with your company.
• Tiered reward program A tiered program structure offers different incentive levels, which businesses will typically base on the number of referrals a customer shares. This type of program can also give customers unique referral links or codes that businesses can track to identify how often they use them successfully.
• Multi-step reward program: A multi-step reward program can encourage higher customer engagement because it takes more steps to complete. This program rewards customers once their referral successfully makes a purchase, accomplishes a step, or reaches another brand milestone.
• Gamified reward program: A gamified program structure turns referral marketing into a fun (and competitive) game by offering a high-value reward to the customer who refers the most people within a set time frame. You can structure this type of reward program as a contest, which can be especially exciting for customers during special seasons and times of the year, like the holidays).

Each of these reward structures can pair with either one- or two-sided campaigns.

One-sided rewards

One-sided customer referral reward programs provide incentives to either your existing customer or the person they referred, but not both. Because of this, you’ll want to carefully decide which group to reward.

For example, rewarding your current customer could increase referrals, but the person they refer might be less likely to buy from you if there’s no incentive for them. On the other hand, rewarding only the referral recipient may make your existing customer feel unmotivated to share. So, if you choose the latter option, your referral program participants must be very loyal to your brand.

Two-sided rewards

Two-sided customer referral reward programs incentivize both the current customer and the person they referred—this is a “win-win” situation. According to SaaSquatch, more than 90 percent of referral programs are double-sided. Because each person receives a reward, this type of program typically has the highest engagement.

You can offer existing and potential customers the same reward or different rewards, but make sure your incentives fit within your budget so your program improves your bottom line rather than hurting it.

Referral reward models

Customer referral reward models focus on how recipients receive incentives, not who receives them. These reward structures can pair with either one- or two-sided campaigns.

Standard reward program

Standard rewards programs provide the same incentive for every referral, no matter who makes the referral. Your customers receive their referral reward once the referred person completes a purchase with your company. For two-sided rewards programs, the incentives can be the same or different for the sender and the receiver.

If you use this type of program, you won’t need to track the number of referrals you receive. However, because of its standardization, the program may lose some effectiveness over time.

Tiered reward program

A tiered program structure offers different incentive levels, which businesses will typically base on the number of referrals a customer shares. This type of program can also give customers unique referral links or codes that businesses can track to identify how often they use them successfully.

For example, your customer may use a link or code to refer friends to your business. For their first five successful referrals, they earn a $10 reward. Afterward, they may receive $25 for each subsequent referral. If you want to adopt a two-sided rewards campaign, you should decide how to structure the tiers for each side.

Multi-step reward program

A multi-step reward program rewards customers once their referral successfully makes a purchase, accomplishes a step, or reaches another brand milestone.

A multi-step program may look something like this:

• The referrer earns $10 when one of their referrals schedules a demo.

• The referrer earns another $10 when a referral books a product training session.

• The referrer earns $25 when the referral submits payment for the product.

A multi-step program structure is similar to a tiered program structure in that it offers different rewards at specific points along the referral timeline. However, multi-step programs focus heavily on the sales funnel stage a customer’s referral reaches.

Gamified reward program

A gamified program structure turns referral marketing into a fun (and competitive) game by offering a high-value reward to the customer who refers the most people within a set time frame. You can structure this type of reward program as a contest, which can be especially exciting for customers during special seasons and times of the year, like the holidays).

A gamified referral program is engaging, but it’s one of the more complex structures. Before developing one, ensure you have the resources to offer a valuable prize and the tools to track referrals from each customer.

15 examples of customer referral programs

Referral programs have great customer benefits, and there are equally great benefits for businesses with referral programs. Discover how some of today’s top brands use referral programs to attract new customers while delighting their existing ones.

1. Harry’s

Harry’s is a hip hair and body care brand that sells grooming and shaving supplies for men. The powerful, two-sided customer referral program is rooted in some of the brand’s core values: transparency, quality, and social responsibility.

• Program type:Two-sided and standard
• Current customer (referrer) reward: Referrers receive $5 off their next order for every new customer they refer.
• New customer (referral) reward: Referrals receive $5 off their first order.
• How to earn a reward: Subscription customers receive a unique referral link on their profile. They then share this link with potential customers. When a referral recipient uses that unique link to purchase the starter set and sign up for a subscription, both parties receive their reward.

2. Stitch Fix

Stitch Fix is a curated personal styling subscription that uses stylists to hand-select clothes and accessories based on a customer’s distinct style preferences. This direct-to-customer service offers a two-sided customer referral program.

• Program type: Two-sided and standard
• Current customer (referrer) reward: The referrer receives a Stitch Fix credit for every referral sign-up—the amount is specified on each customer’s referral page.
• New customer (referral) reward: They get a Stitch Fix referral credit that automatically applies to future styling fees and purchases.
• How to earn a reward: Current customers must activate their referral code on their profile. They can then share this code with friends, family, and others. Stitch Fix automatically applies the credit to future transactions.

3. Dropbox

Dropbox is a cloud-based storage system designed to help users stay organized and work efficiently. It gives you a secure location to store, access, and share files.

• Program type: Two-sided and tiered
• Current customer (referrer) reward: For Dropbox Basic accounts, referrers receive 500 MB of storage per referral (up to 16 GB). For Dropbox Plus accounts, customers receive 1 GB of storage per referral (up to 32 GB).
• New customer (referral) reward: Referred customers receive the same rewards as referrers.
• How to earn a reward: Log in to your Dropbox account and access the “Refer a friend” tab. Send a referral email or use your customer referral link to encourage new sign-ups. Both parties will receive a reward once a new account is created and validated.

4. Quip®

Quip® is a subscription company selling electric toothbrushes, toothpaste, refillable floss, and other dental care products. Dentists and designers created it to improve dental care and regularly reward users for establishing good habits.

• Program type: Two-sided and standard
• Current customer (referrer) reward: The referrer gets a $10 credit for every referral sign-up and purchase over $30.
• New customer reward: Referrals receive a one-time $10 credit.
• How to earn a reward: Customers must sign up for an account and make a purchase of more than $30 to get their custom referral code and link. They can share the code and link directly with their referrals, but they cannot post either publicly. If the referral recipient uses the sender’s code or link, both get a $5 credit toward their next purchase.

5. Google Workspace

Google Workspace includes Gmail, Google Meet, Google Docs, Google Slides, Google Sheets, and other Google-based programs and software. Referrers can be members of Google Workspace’s referral or affiliate program, depending on the number of referrals they bring in each year.

• Program type: Two-sided and tiered
• Current customer (referrer) reward: Referrers receive a cash reward.

• New customer reward: Referrals receive a 10 percent discount on their first year using a Google Business plan.
• How to earn a reward: Google Workspace has a sign-up form for paying customers who want to participate in the referral program. After joining, Google Workspace customers can share their personal referral links and promo codes with their network.

6. T-Mobile

T-Mobile is a well-known wireless carrier with the (self-proclaimed) first and largest nationwide 5G network. T-Mobile’s customer referral program is called the Refer-a-Friend program.

• Program type: Two-sided and tiered
• Current customer (referrer) reward: Referrers receive one $50 Virtual Express Prepaid Mastercard card per referral, with a limit of $500 per calendar year.
• New customer reward Referred customers receive the same rewards as referrers.
• How to earn a reward: After a customer joins T-Mobile’s Refer-a-Friend program, they receive a unique link to share with their network. Referred customers use this link to activate a new account within 15 days of accepting the referral. Rewards are issued once the referred customer has been active for 30 days.

7.Sam’s Club

Sam’s Club is a membership-only warehouse club offering bulk purchases of groceries, electronics, and more. Their referral program incentivizes new non-members with a membership free trial.

• Program type: One-sided and standard
• Current customer (referrer) reward: Referrers receive one $50 Virtual Express Prepaid Mastercard card per referral, with a limit of $500 per calendar year.
• New customer reward: Referred customers receive a free 30-day Sam’s Club membership trial.
• How to earn a reward: Log into your Sam’s Club account, then select “Refer a Friend” in the dropdown menu. Copy the link and share it with your referral. Your referral has until the offer expires to sign up for the free trial.

8. Chase

Chase is a major financial institution that offers personal and business services such as accounts, credit cards, loans, investments, and more. However, the company’s referral program focuses only on personal accounts, incentivizing existing customers to introduce friends and family to Chase with a cash bonus.

• Program type: Two-sided and tiered
• Current customer reward: The referrer gets $50 for each referral who opens a qualified checking account, with a limit of $500 per calendar year.
• New customer reward: Referrals can receive up to $300 for opening a qualifying checking account and completing the required activities, like depositing a minimum amount or setting up an automatic deposit for a certain amount.
• How to earn a reward: Log into your Chase account and select “Refer-a-Friend.” Enter the necessary information to receive a unique code to give out to referrals. Rewards are dispersed after qualifying new account activities are completed.

9. Fiverr

Fiverr is an online marketplace connecting businesses with freelancers, offering a wide range of digital services like graphic design, writing, and video editing. The Fiverr referral program encourages existing users to invite both new freelancers and new clients to the platform. Fiverr also offers a more substantial affiliate program.

• Program type: Two-sided and tiered
• Current customer reward: Referrers earn 10 percent of new customers’ first purchases, up to $100 per transaction, and a $500 lifetime referrer total.
• New customer reward: Referrals earn 10 percent off their first purchase.
• How to earn a reward: Log into your Fiverr account and select “Refer a Friend” from the account menu or “Invite a Friend” from the footer. Send referrals by email or copy a link to share with them. Once referrals make a purchase, rewards are dispensed to your account in the form of Fiverr credits.

10. Intuit TurboTax

TurboTax is a popular tax preparation software that helps individuals and businesses file taxes. Their referral program is open to new and existing customers to refer services to new users for a cash reward.

• Program type: Two-sided and standard
• Current customer reward: Referrers earn a $25 Amazon gift card for each new referrer filing, up to a lifetime total of $500. Referrers do not have to be existing TurboTax customers to participate.
• New customer reward: Referrals earn 20 percent off the cost of their first purchase of TurboTax online federal filing products.
• How to earn a reward: Enter your information on the TurboTax referral page to receive a code. Share that code with referrals and receive rewards once they complete a filing.

11. Venmo

Venmo, the popular peer-to-peer payment app, has a referral program for existing users to invite new users. With Venmo’s referral program, the referrer and the referral receive the same reward.

• Program type: Two-sided and standard
• Current customer reward: After a qualifying payment, referrers receive $5 per referral, with a limit of 10 total referral rewards or $50.
• New customer reward: Referrals receive $5 after their first payment of more than $5.
• How to earn a reward: Log into the Venmo app, go to the “Me” tab, and select “Invite friends, earn $5.” Share the referral code via direct message, email, social media, or another method. Recipients must use referrals within 14 days of a referral link creation, and Venmo will send rewards after a qualifying payment is made.

12. Robinhood

Robinhood is a mobile-first investing platform that offers commission-free stock, options, and cryptocurrency trading. Their referral program uses gift stocks to incentivize both the referrer and the referral to participate in their program.

• Program type: Two-sided and standard
• Current customer reward: Referrers receive shares of a gift stock from their choice of one of Robinhood’s top-traded companies, valued anywhere between $5 and $200.
• New customer reward: Referred customers receive the same rewards as referrers but can choose their own stock.
• How to earn a reward: Log into your Robinhood account and select the “Earn stock” option in the app or the “Rewards” option on the website. Share the link with your referrals via your preferred method, then select a gift stock once your referral signs up and links a bank account or debit card.

13. Uber

Uber is a leading ride-hailing and food delivery company that connects passengers and food orders with drivers via a mobile app. The company uses a referral program to incentivize new users to use their services instead of a competing ride-hailing service. Both riders and drivers can refer new users to Uber, and the rewards differ.

• Program type: Two-sided and tiered
• Current customer reward: Rewards for riders and drivers vary based on existing offers and other factors like location.
• New customer reward: New riders can earn a percentage or dollar-value discount toward their first ride. New drivers can earn a predetermined bonus after completing any requirements, such as completing a minimum number of trips in a certain timeframe.
• How to earn a reward: Riders can send referrals if they receive a related promotional email from Uber. Drivers can send referrals anytime with a link from the Driver app in the “Earnings” menu.

14. PayPal

PayPal is a leading online payment platform enabling individuals and businesses to send and receive money online, in stores, and internationally. Users can refer up to 10 people to create new accounts, and both referrers and referrals can receive a reward.

• Program type: Two-sided and standard
• Current customer reward: Referrers receive 1,000 points for each new referral purchase or payment of $5 or more, for up to a lifetime total of 10,000 points (redeemable for $100 cash back).
• New customer reward: Referred customers receive the same rewards as referrers.
• How to earn a reward: Log into your PayPal account and select “Invite Your Friends” in your account menu. Send the referral link and receive a reward once they’ve created an account, linked their banking information, and completed a qualifying transaction.

15. Purple

Purple is a mattress and bedding company best known for its grid-patterned comfort technology. It offers a referral program that gives new customers a percentage discount while existing customers receive Amazon gift cards in return for the referral.

• Program type: Two-sided and tiered
• Current customer reward: After referrals make their first purchase, referrers receive up to $75 in Amazon gift cards.
• New customer reward: In their first purchase, referrals receive 10 percent off mattresses and 5 percent off accessories from Purple.
• How to earn a reward: Log into your Purple account and select “Refer and Earn” under your profile. Send the link to referrals and collect rewards after they make their first qualifying purchase, subject to varying minimum dollar values.

Frequently asked questions

Supercharge your growth with a customer referral program

While positive customer reviews can motivate people to buy a product or service without incentives, customer referral programs provide powerful growth channels for today’s brands, benefiting both referrers and referrals.

By offering rewards and incentives, these programs help turn one-time buyers into loyal customers, increasing customer retention. Leverage our customizable customer referral templates to start growing your referrals today.