Ask almost any small business owner where their best customers come from and the answer is usually the same: recommendations. A referred customer arrives already trusting you, is often easier to win and tends to stay longer.
In close-knit communities — such as the expat communities on the Costa Blanca and Costa Cálida, or small towns in the UK and Ireland — word of mouth is especially powerful. Yet most businesses leave it to chance. A simple referral programme can turn occasional recommendations into a reliable source of new business.
Why referrals work so well
- Trust is transferred. People trust recommendations from friends, family and neighbours far more than advertising.
- Better-fit customers. Your happy customers tend to recommend people like themselves.
- Lower cost. Rewarding a referral usually costs less than acquiring a customer through advertising.
- Loyalty. Customers who refer others often become more loyal themselves.
Step 1: Deliver something worth recommending
No referral programme can fix a poor experience. Before you ask for referrals, make sure your service is consistently excellent — reliable, communicative and memorable. The small touches matter: turning up on time, following up after the job, remembering names.
Step 2: Ask
The simplest referral strategy is asking. Many happy customers would gladly recommend you; it simply has not occurred to them. Good moments to ask include:
- When a customer thanks you or compliments your work.
- When you complete a project.
- When a customer leaves a positive review (see getting more Google reviews).
A simple line works: “We grow mainly through recommendations. If you know anyone who might need us, we’d be really grateful if you passed on our details.”
Step 3: Make it easy
- Give customers a couple of business cards to pass on.
- Send a short message with your details that they can forward on WhatsApp.
- Create a simple referral page on your website.
- Provide a unique link or code if you run an online business.
Step 4: Offer a thank-you
Incentives are not essential, but they can encourage action. Options include:
- A discount or credit on the referrer’s next purchase.
- A discount for the new customer too (a “give and get” approach often works well).
- A small gift: a bottle of wine, a voucher for a local restaurant, a free add-on service.
- A donation to a local charity.
Keep it simple and make sure the reward is proportionate to the value of a new customer. Be transparent, and check any rules in your industry about referral fees.
Step 5: Say thank you — every time
Whether or not you offer a reward, always thank people personally when they send someone your way. A handwritten note or a quick call goes a long way and makes people more likely to refer again.
Build referral partnerships
Referrals do not only come from customers. Think about complementary businesses that serve the same customers:
- A property management company and a pool maintenance company.
- An estate agent, a lawyer and a removals company.
- A wedding venue, a photographer and a florist.
- A web designer and an accountant.
Agree to recommend each other where it genuinely helps the customer. Local networking groups and chambers of commerce are good places to find partners.
Track your referrals
Ask every new customer how they heard about you and record the answer. Over time you will see who your best referrers are — and you can thank them accordingly. A CRM makes this easy (see do you need a CRM?).
Amplify word of mouth online
Online word of mouth matters too: reviews, social media mentions, recommendations in local Facebook groups and user-generated content. See our guides to Facebook groups for expat businesses and user-generated content.
Make it a habit
Referrals are not a one-off campaign. Build asking, thanking and rewarding into your normal routine, and recommendations will become one of your most dependable sources of growth.
Would you like help building a marketing system that encourages referrals and reviews? Get in touch — and if you know someone who could use our help, we would love the introduction.
