How Referral Programmes Help Christchurch Businesses Grow

01

Turn a good experience into an introduction

A customer recommends a café because the coffee is good, a salon because they trust the stylist, or a shop because someone helped them choose well. The experience earns the recommendation. Your programme makes it easier to act on it.

For a Christchurch business, start with the customers already returning to your counter or appointment book. Give them a simple way to introduce someone who would enjoy the same experience. Explain what each person receives and when. A clear invitation gives staff something useful to offer after a successful visit, while a personal link saves the customer from explaining the whole promotion themselves.

02

30–50% more sales: Hormozi’s case for asking

Alex Hormozi describes a salesperson making 30–50% more sales than colleagues and credits a simple habit: asking customers for referrals after a sale. This is his reported experience, without a published controlled comparison. The practical lesson for your team is to ask consistently after delivering a good experience.

Choose a moment that feels earned: a customer compliments their haircut, returns for another lunch, or tells your team they enjoyed their visit. A staff member could say, ‘If you know someone who would enjoy coming here, your referral link gives you both a reward after their first purchase.’ Keep it brief and optional. Train the whole team so the invitation does not depend on one confident person being on shift.

03

Referrals can become a serious source of sales

Hormozi also reports that a referral tactic contributed 30% of sales during his promotions. That is a substantial part of a sales mix. His figure measures the share of promotion sales; it does not mean sales increased by 30%.

Independent research also points to the value of referrals. Schmitt, Skiera and Van den Bulte followed approximately 10,000 customers at one German bank over 33 months. Their 2011 study estimated 16% higher six-year customer value for referred customers after adjusting for demographics and acquisition timing. That six-year value was modelled and varied between customer groups. The finding is specific to the bank studied, so use it as research context rather than a forecast for your Christchurch business.

The practical question is whether your referrals bring customers who purchase, return and leave enough margin to cover the rewards. Measure that in your own business.

04

Choose rewards your margins can support

Hormozi also recommends comparing referral incentives with normal customer-acquisition cost and considering what a reward actually costs to deliver. A service or product’s advertised value can differ from its fulfilment cost. The right comparison is the economics of acquiring a worthwhile customer.

Work out what you can afford for both people together. Include product costs, staff time, discounts, programme fees and any paid promotion. A free drink still uses ingredients and labour; a voucher discount reduces the money collected when it is redeemed. Also consider whether the reward replaces a purchase someone would have made anyway. Budget for outstanding vouchers instead of assuming most will go unused.

Use conservative estimates first. Our reward-cost calculator helps you explore the costs and additional purchases needed to cover a programme; its result depends on the assumptions you enter.

05

Illustrative café example

A Christchurch café could offer a coffee voucher to a regular and their friend after the friend’s first paid visit. The regular shares a personal link, the friend joins, and staff confirm the qualifying purchase. Both then receive vouchers for a future visit.

That timing gives the café a clear milestone before issuing rewards. The friend has tried the café, and each person has a reason to return. Choose a reward your team can recognise quickly at a busy till. Explain any eligible item or size clearly, set the expiry before sharing and make sure the likely cost fits the café’s margin.

06

Illustrative salon example

A salon could offer both people a voucher towards a future appointment after the friend completes their first paid visit. A client who is pleased with their result has something specific to send when a friend asks who did their hair.

Allow for the appointment cycle when choosing the reward and expiry. Train reception and stylists to explain the same terms, and make voucher redemption easy to recognise when the client returns. Check the effect on your margin and available appointment capacity before increasing the reward. A busy Saturday and a quieter weekday can have very different operational costs.

07

Make sharing easy on a phone

Give customers one clear route into the programme. With FiveStar, you can display your programme link or QR code at the counter, on your website or in a social post. Customers sign in or join to receive their personal referral link, then use Send to a friend or Copy link.

The friend follows that personal link, which connects the introduction to the correct customer and offer. The friend offer is for new customers; an email address or mobile number already registered with that business is not eligible. Keep the explanation short enough to understand on a phone. Customers can request their referral link without signing up for general promotional emails; bulk promotional invitations go to customers who have opted in.

08

Connect the first purchase to the next visit

In FiveStar, both referral vouchers are issued after the friend’s first staff-confirmed purchase. Signing up alone does not issue them. Each person receives their own voucher email and can view their available vouchers, then choose to save a pass to Apple Wallet or Google Wallet.

An existing saved loyalty pass updates automatically. Customers can keep their rewards close at hand without downloading a separate loyalty app, and staff use the checkout tools to redeem the chosen voucher. If you take down a referral promotion, future use of its links stops while already issued vouchers keep their original expiry. Make sure your team continues to honour them.

09

Keep referrals and Google reviews separate

A referral reward recognises a qualifying customer introduction. A Google review is the customer’s choice. Do not make a voucher conditional on leaving a review or giving a particular rating. Customers earn their loyalty rewards whether or not they review the business.

After a genuine purchase, FiveStar can show a review button on the customer’s phone. They can leave honest feedback or skip it. Keep that request separate from the referral invitation so your team can explain both clearly and customers understand what their reward depends on.

10

Measure customers and costs rather than link activity alone

FiveStar’s referral analytics show Friends Joined and Referral Vouchers Issued for the selected branch. Friends Joined counts new customers who joined through a friend’s link. Referral Vouchers Issued counts the rewards created after qualifying purchases; it is not a count of unique new customers.

Combine those figures with your own purchase and cost records to decide whether the programme is worthwhile. Look for repeat customers before increasing the incentive or widening the promotion:

• Use purchase records to check how many referred signups became paying customers.
• Track the combined cost of redeemed rewards, fees and promotion against those customers’ purchases.
• Review later visits over a period that suits your business, and compare branches separately.

11

Start with one clear offer

Choose the reward for each person, agree how staff confirm the first purchase and make the programme link easy to find. Explain the offer to your team before inviting customers. Review the first results and adjust the next offer using what you learn.

FiveStar’s refer-a-friend add-on is optional with Loyalty or Campaign at NZ$29 + GST per month. One payment covers all approved branches, with separate offers and results by location. Choose an affordable reward and a sharing process that fits your service. Consistent execution gives your customers’ recommendations a practical route into your business.