Why Your Service Business Needs a Referral Program

Running a business of any type, including service-based businesses, is hard work, and increasing cash flow is no different. As a business owner, your hands are tied in both the day to day handling of things, as well as managing everything on the back end. If this is you, a simple and relatively hands-off approach to increasing your cash flow would sound enticing, wouldn’t it? Well, we’ve got one: referral programs.


Here is why your service-based business should have one!


  1. They are great for stimulating work-of-mouth marketing as customers will have a bigger incentive to share their good experiences with friends. This helps you establish greater brand awareness and build your good reputation.
  2. It will increase your customer base.
  3. You will acquire better leads; your existing customers will send friends and family to you and because these new customers have been referred by people they trust, they automatically have more trust in you.
  4. It is a great, fairly inexpensive way to promote your business compared to other means of marketing and advertising.


Here are a few ways to get started with a referral program.


  1. Use an incentive for existing customers to share their good experience with you and your service, like a discount on the next service they book, for example.
  2. We recommend offering both the new and existing customers a bonus or discount.
  3. Other incentive ideas are in-store credit (if you have a small retail section within your business), gift cards to use towards your services, an extra treatment added on when they purchase a different treatment, or entry into a draw where they can win a great prize.
  4. Put up signage throughout your studio, office, shop, or salon that clearly state what your referral program is and how it works in a fun, punchy way.
  5. Post about your referral program on all social media channels, and tell every customer before they leave.
  6. Always show your appreciation via email or a phone call once an existing customer refers a friend or family member to you! This recognition and appreciation goes a long way.



Now that you’ve got the knowledge, it’s time to market your business! Head to gumtree.co.za or your Gumtree app (click for Apple & Android).

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