How to Launch A New Customer Referral Program

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When it comes to finding new clients, many agencies rely on cold calls and emails. This sort of client acquisition can be successful in netting you projects, but it’s certainly not a long-term solution for building a thriving agency business. An even more successful approach is to encourage current and past clients to refer new business your way. A customer referral program can help you achieve this goal and provide you with a list of “warm” contacts whom are more likely to convert into real customers.

When you contact a prospective client via someone they know to be happy with your services, your chances of getting hired improve. Also, since most referral programs include some form of an incentive, your customers feel rewarded for recommending you. It’s a win-win!

Here are a few steps to get you started with your customer referral program.

Step #1: Choose Rewards and Incentives

The rewards or incentives in a customer referral program are its most important element. To run a successful customer referral program, you need to choose a reward for clients that recommend your services and successfully net you a new client. This incentive should be exciting enough to encourage your existing customers to go out of their way to find you new clients. If they don’t find the reward “rewarding” enough, they might not feel inspired to recommend you, despite the level of service you provide.

When Software Advice ran a survey to find the most effective tactics to generate referral business, they found that more than half the respondents were “somewhat more likely” to refer a friend or colleague if they were offered a direct incentive, social recognition, or access to an exclusive loyalty program.

Implementing a direct incentive program could be as simple as the following options:

  • Offer a flat discount on their next project
  • Offer X% commission on the first project of their referral
  • Offer complimentary credit they can use on their next project

If you can’t zero in on an incentive, email your clients and ask them what they’d prefer. Or, simply ask for incentive ideas. Ask them how you could get them to recommend your agency to their connections.

Power Tip #1: Laura Hogan, account manager at OverGo Studio (an inbound marketing agency), suggests developing a referral program targeting all your contacts and not just the existing customers. Further, she recommends offering different incentives to the different segments in these contacts. For example, giving a separate referral offers to existing client and past clients.
Power Tip #2 Nina Stepanov, manager of HubSpot’s Customer Referral Program, shares another power move: reaching out to the active customers first. She recommends reaching out to those customers who’ve given you positive reviews/feedback or mentioned your brand on social media. You should also check in internally with your team members to spot the most active, engaged users.

Step #2: Email Your Customers

Once you’ve decided upon the incentive you want to offer, your next step is to email your clients about your referral program.

You should state two things clearly in your referral email:

  1. Explain how your referral program works and what the different incentives are.
  2. Include a description about the ideal person who might be interested in your service (talking about your target audience is important because it helps your current customers in identifying the people in their connections who’d make qualified leads). For example, include a sentence like “If you know someone who runs a 6-figure business and could need help with advertising and PR, please introduce us to them,” in your email.

When you write this email copy, don’t try to oversell the referral program because the people who are happy with your services will be happy to recommend you with just a little nudge.

Power Tip #3: To make referring effortless, Rick Roberge recommends giving the existing customers a ready-to-send recommendation email as well. You can see his template here:


I don’t know if I’ve mentioned it before, but I’ve been working with [salesperson] for a few months. The other day, I was talking with him about some of the things that he and I have done, and I realized that I should put you two together. So…

[Referral], meet [Salesperson, with a LinkedIn profile URL].

[Salesperson], meet [Referral, with a LinkedIn profile URL].

Can I leave the rest to you guys?

Talk to you both later.”

Step #3: Choose a Tracking Mechanism

Hopefully, since you’ll be emailing many clients, you will receive an influx of potential leads. To make sure that you do the payouts correctly for all the leads that convert, you need a solid tracking system.

Most affiliate marketing tools use cookies to track the referred leads and sales, but your agency may not be set up for such a complex referral program. Tracking customer referrals is less straightforward than tracking affiliate sales. With that in mind, you might want to develop your own tracking mechanism. It could be as simple as creating a shared Google Spreadsheet that all your sales representatives can update based on their follow-ups with the different referral leads.

Once you notice that a client’s referral has converted, thank the client with a short email along with listing any steps that the client must take to redeem the incentive.

When done right, a referral program can bring in a lot of qualified leads for your agency. The above three steps are enough to setup a basic client referral program. When you’re done with launching it, you can promote it on your blog, social media accounts, and email newsletters – and let the leads roll in! Be sure to track how it performs over time – if the incentive you’ve chosen doesn’t entice your customers, it might be worth revisiting. In addition, if some clients don’t have a referral immediately, make a note to follow up with them in 6-12 months.

How do you ask your customers for referrals?

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