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How To Choose Referral Program Rewards

Picture of Maria Davidoski
Maria Davidoski

Copywriter. Content writer. Psychologist.

Referral program rewards

Good referral marketing programs are like chocolate: you set out to eat just one piece, but you always end up eating the whole bar.

Fabulous rewards make referral programs irresistible the same way the melting, creamy sweetness makes chocolate irresistible.

Have you ever stood in front of the shelf in your local supermarket trying to decide which chocolate to buy? Yes, the struggle is real.

Choosing the best rewards for your referral program is quite similar to choosing chocolate: always pick one that brings you the most happiness.

But with all those different rewards, how do you know which one will make your customers happy?

In this article, we’ll cover everything you need to know about referral program rewards: from different rewards to choosing ones that will make you and your customers blissfully happy, just like the bar of perfect chocolate.

And who can say no to chocolate?

Avoid offering boring referral program rewards with these 3 tips

It’s no wonder many business owners stress about an effective referral program because they know the benefits are endless: from an increase in sales to boosting brand awareness and getting high-quality leads.

It’s one of the best marketing tactics because nothing beats good old word-of-mouth marketing.

Creating a successful referral program may seem daunting since there are mistakes many businesses often make, like not providing exceptional service for their existing customers.

However, even though mistakes are a great way to find out what works and what doesn’t, there is one mistake you must avoid: offering boring rewards.

Here are 3 ways you can make sure you are offering exciting rewards.

1. Get to know your loyal customers

In today’s competitive market, customer loyalty is one of the top goals for every business owner.

Contrary to popular belief the most significant benefit of having loyal customers is not the money they spend on your business; it’s the knowledge they can give you.

Imagine driving from San Francisco to Albuquerque without using GPS or a map. You will probably get lost somewhere in the desert.

Well, your loyal customers are the GPS for creating the best referral program.

When asking your loyal customers to refer to friends and family members, don’t be afraid to ask them what motivates them to do so: is it a discount on your product/service, store credits, gift cards?

You want to attract more people who think like your loyal customers to expand your customer base and increase sales.

No one can help you more with that than your most loyal customers.

2. Think about what will work best for your business in the long term

Sometimes business owners offer the most accessible rewards for their customers: a pen with a business logo or some products that no one wants to buy, so they’ll give them away for free.

With these kinds of rewards, one thing is certain: no one will be motivated to even forward a simple text with a referral link to the landing page.

When it comes to offering perfect rewards, those rewards don’t have to be perfect for your customers only; they need to be perfect for your business too.

Think about what will work best for your business in the long term.

For example, suppose you are in the fitness or medspa industry offering different types of memberships. In that case, you could offer a free monthly membership to your existing clients who refer new people, or you can upgrade the membership levels of both your existing and potential new customers.

That way, you kill two birds with one stone: your existing customers can enjoy the benefits of the expensive membership option and may even decide to upgrade their membership next month. New customers may ditch the cheaper membership too because the more expensive one has better options.

Giving away branded pens might be a cheaper, easier option, but remember why your customers are there in the first place: Is it to have more of what you offer or to get another pen for their stationery collection?

3. Turn “no” into “yes”

Think about the most common objections you got from your customers about your service or product in the past. Is it too expensive, for example?

Why is this important: just because something is too expensive it doesn’t mean we will stop dreaming about it. Sports cars are expensive, yet everyone dreams about having one parked in the driveway.

How can you turn objection into motivation?

Imagine you are in the beauty industry, and your most expensive service is not selling easily because it’s costly. Use that as your advantage and offer your existing customers a special discount on that service if they refer your business to new people.

That way, you show appreciation for your customers while having prospects knocking on your doors.

Examples of different types of referral program rewards

There are many different types of rewards, but to make it easier for you to pick the perfect one, we will explain each one below.

Store credit

One way to reward existing customers for referring new people is to offer store credit which offer your customers many benefits including:

-They can be used immediately, which is helpful if customers make a purchase soon after referring a friend. -Store credits do not expire, so customers can use them when they want or need to, which helps encourage customers to keep coming back. -They can be used on anything in the store, giving customers the flexibility to choose what they want.

Don’t forget the biggest benefit for you: store credits do not cost anything to administer, so they are an affordable reward option for you.

Therefore, offering store credits as a referral program reward can benefit both business owners and customers.

By offering store credits as a reward, you can increase customer loyalty and customer referrals.

Airbnb used to have a referral program based on store credits, allowing users to give $25 to their referred friends on a new trip.


One of the best ways to reward customers for referring others to your business is by offering discounts.

This helps encourage customers to continue referring others, because they know they will receive a discount on their next purchase.

Additionally, it helps to show your appreciation for their loyalty. By offering a discount, you are essentially saying that you value them and their referrals.

It is also a great way to build stronger relationships with your customers. When they feel appreciated and valued, they are more likely to continue doing business with you.

And as we mentioned above, discounts are a great way to turn an objection into motivation.

Tesla used this type of reward in their referral program which launched in 2016 by offering a $ 1,000 discount. Apparently, their customers loved it because 25% of sales in 2016 came from the referral program.

So if you are looking for a way to show appreciation and build loyalty among your customer base, consider offering discounts as a reward in your referral program.

Free products/service

You can encourage people to tell their friends and family about your business by offering a free product or service as a reward.

Not only is this a great way to generate new leads, but it’s also an excellent way to build goodwill and strengthen relationships with existing customers.

If your customers are happy with their experience, they’re more likely to tell their friends and family about it. And when satisfied customers see that they can get something for free by referring someone else, they’re even more likely to do so, just as Uber customers do.

Free subscription

Imagine you’re a happy customer of a service or product you use and love. Now imagine telling your friends about it and getting rewarded with a free subscription for doing so. Sounds pretty great, right?

By offering a free subscription as a reward, you’re encouraging customers to spread the word about your business and giving them an incentive to keep using your products or service, just as in the example we mentioned above.

Did you know that Evernote used this tactic to gain millions of users, of which 25% of users upgraded to Evernote premium after three years?

Cash/cash back

A typical referral program gives customers a discount or other incentive for referring friends or family members to the business.

However, some companies take a different approach by offering cash or cash back as a reward.

While this may seem more expensive, there are several benefits to offering cash rewards.

First, it provides a strong incentive for customers to participate in the referral program. Second, it helps to build goodwill and loyalty among customers. Finally, it can be used as a marketing tool to attract new customers.

By offering cash rewards, businesses can create a powerful referral program that generates new leads and builds customer loyalty. Just look at Payoneer for inspiration.

Branded swag

Do you remember the popular Hustle goods like hoodies and socks from their referral program, which everyone loved?

Yes, many companies offer branded swag as a referral reward, and there are good reasons for it.

First of all, branded swag is an excellent way to promote your company. When people see your logo on a t-shirt or a water bottle, they’ll be more likely to remember your brand. And if they like the swag, they’ll be even more likely to talk about your company to their friends.

Secondly, branded swag can be a very effective way to thank customers for their referrals. People love free stuff, and receiving a nice piece of swag will show them that you appreciate their help in spreading the word about your business.

Finally, offering branded swag as a referral reward builds customer loyalty. If people know they can get some cool free stuff just by referring their friends, they’re much more likely to stick with your brand in the future.

Gift cards

Gift cards are a great way to reward loyalty and incentivize customers or even employees to promote your business to others.

Many people love receiving gift cards because they can use them conveniently to buy what they want or need. And with referral programs, you can give away branded gift cards that act as a walking advertisement for your company every time they’re used.

People also value the flexibility that gift cards provide. They can use them when they want and on what they want, which makes them feel in control and appreciated.

This tactic worked for DocuSign in 2009 when they offered subscribers who referred a friend to DocuSign to earn a $20 Visa gift card for each referral.

Who could say no to a free gift card?


Offering donations as a reward is not something many businesses do. Still, the ones who do can serve as an inspiration for others.

Donations not only incentivize people to participate but also helps generate goodwill and social media buzz.

When people see your company donating to a worthy cause, they’re more likely to want to do business with you. And when they share your referral program with their friends, they’ll be happy to mention the donation in their post.

As a result, offering a donation as a reward can significantly increase participation in your referral program while also generating positive PR for your business.

And when it comes to your customers…who doesn’t want to experience the satisfaction of making the world a better place?

No matter which of these rewards you choose for your referral program, remember that happy customers are the ones who refer to others.

So don’t hesitate to provide the best possible service for your customers and use the referral program as additional fuel to skyrocket your business!

Maria Davidoski

Copywriter. Content writer. Psychologist.

Marija uses her knowledge of human psychology to create irresistible copy, the one that both Google and your clients will adore.

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Maria Davidoski

Copywriter. Content writer. Psychologist.

Marija uses her knowledge of human psychology to create irresistible copy, the one that both Google and your clients will adore.

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