Last updated on April 29th, 2026

When you hear the term “referral program”, what comes to mind? If you thought of getting some kind of reward for telling friends and family about your favorite products, you’re spot on.

According to impartner:

Referral programs…leverage the power of word-of-mouth marketing, encouraging happy customers and partners to spread the word about your company’s products or services.

In other words, those subscription meal kits that give you a free box for every new friend that joins, or that industry newsletter offering free merch for getting your coworkers to subscribe are all referral programs designed to get you to market your favorite brands.

As straightforward as it sounds, there isn’t a one-size-fits all approach to designing referral programs. In fact, there are enough nuances that companies have built entire platforms dedicated solely to referral marketing as its own practice.

I’ll cover some of the more popular categories below to help you decide which one is right for you.

Incentivized referrals

This is the broadest type of referral I touched on at the start. You offer some kind of gift, discount, or money to your current customers for every new one they bring to your business.

It’s the easiest to create since you just need to come up with a good reward that you can then publish to your website or share via email.

Tiered rewards

A step up from basic incentivization, tiered programs offer better rewards the more existing customer(s) successfully refer your product or service.

Just be careful not to set up too many tiers; more than 5 could lead to participation dropoff.

Gamified referrals

This type of referral program operates like tiered rewards. Existing customers participate in a series of game-like stages and earn better incentives along the way.

The games are often pretty easy since the goal is to accrue free gifts or discounts. At the end, you can either ask customers to share a referral link to cash out on their winnings or offer a bigger bonus to get those new signups.

Examples of great referral marketing programs in action

If you’re anything like me, you love a good real life example. Here’s a roundup of some of the best referral programs I’ve seen across the internet.

United Credit Card

United’s longtime partnership with Chase offers a range of credit cards that reward customers for booking with the airline.

Rewards include the United MileagePlus® referral program. Members receive 10,000 bonus miles for every friend referred; up to 100,000 per year.

Referral programs that use an accrual system are great because they encourage customers to share with as many people as possible.

Point accruals work best in business sectors like retail, food service, or travel & hospitality. It’s a lot easier to offer points for future product purchases, fast casual meals, hotel stays, or transportation.

Include a quarterly or annual cap on rewards so you have a clear budget for your referral program.

Home Chef

Home Chef’s referral program is a win-win for everyone involved. The meal kit delivery service encourages customers to share their referral code with friends and family. For each new signup, both the customer and the new subscriber get discounts.

You can increase the chances that a new referral will try your product when you offer a double-sided incentive. Businesses in any industry can adapt the “give a gift, get a gift” approach since it’s usually money or discount based.

Double-sided referral programs work especially well for B2B brands in Software as a Service (SaaS).

An incentive offered only to existing clients can feel pretty uncomfortable since it could make them feel like they’re being salesy with their network. Give both parties special perks, and it helps remove a lot of that stigma.

It also helps to introduce the referral program during a time when your business partnership is at its peak. That way, your clients are more inclined to see it as a way to help their peers rather than pitch them.

Nuts.com

Nuts.com is another good example of the dual-sided incentive in action. The great part is that they made it work for B2B, too. Whether a customer refers to friends and family or business partners, both parties earn credits after a successful first purchase.

TikTok

TikTok periodically uses the TikTok Shop to gamify their referrals. Rewards vary from coupons to free products.

Using gamified referrals work well since they tap into our dopamine receptors. Classic video games are fun to play because you get some kind of reward or recognition for each level you complete. Working game mechanics into the referral incentive makes engagement more likely than publishing a passive “refer-a-friend” page.

It’s a good idea to create 2-3 games with increasingly better rewards. That way you’re more likely to get customers to share their referral links.

Why are referral programs effective?

Referrals are a solid way to boost sales by giving your existing customers something back for spreading the word about your business. And if you’re just starting out, referral marketing can help you scale faster.

By tapping into your existing clients’ networks, you’re more likely to end up with high-quality leads that convert to new customers themselves. You can also boost customer lifetime value by offering special incentives to your most loyal clients.

Ready to start your referral marketing journey? Learn more about how to create your own referral program.

If this doesn’t sound like the right fit for you, you may want to consider affiliate marketing.