How to Create a Customer Referral Rewards Program

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Many businesses operate customer referral rewards programs to increase sales and customer participation as well as to stimulate interest in products or services. Creating a referral program gives business owners free sales people in exchange for commissions and other rewards that may be paid to those customers who refer others. This type of program is a relatively simple one to set up and works automatically once you have everything in place.

Decide which type of rewards you are offering to referring customers. These can be simple monetary rewards that get paid directly to the referring customer, redeemable store credit or reward points that can be redeemed for different prizes. Creating a points reward system is a bit more complex because it involves deciding which prizes or merchandise will be offered for different point levels and how many points will be awarded for each referral.

Create a tracking system for each customer who refers others. Smaller stores and businesses that may not have as many customers can create a simple name-referring system that uses the referring customer's last name. Larger stores with more customers may need to assign a number to each customer who refers others so that rewards can be stored and/or tracked in the account.

Create a database that stores each customer's last name or identification number. Include a section for reward points or store credit to keep track of how much money or value you owe to each referring customer.

Write the program rules as well as terms and conditions of the customer referral rewards program. Explain how long the program will continue, the different point-value systems, and/or how much cash value is being given to referring customers. Make these program rules available to your store customers who sign up for the program.

Announce the referral rewards programs to your customers. Display posters around your store detailing the program. You can also print a message on each cash register receipt you issue, and display the program prominently on your website and your social media sites. Create an account and/or identification number for each person who wants to participate.

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