Referral programmes for small businesses: more recommendations without breaking the rules
Recommendations are the cheapest and most trusted source of new customers, yet in most small businesses they happen by chance. A referral programme turns them into a process: you ask at the right moment, make it easy to pass on, reward fairly and see which customers bring others.
Ask at the moment of satisfaction
The best time to ask is right after a visible success: a finished project, a good stay, a solved problem. A hotel can ask at check-out when the guest praises the stay; a tradesperson when handing over the finished bathroom. Ask personally, then send a short message with a link the customer can forward.
Rewards that fit
The reward should match the value of a new customer and feel fair to both sides. Common options:
- A discount or credit for both the referrer and the new customer.
- A small gift or an upgrade, such as a free dessert or a late check-out.
- A donation to a cause the customer chooses.
- In B2B: a commission agreed in writing.
Track every referral
Give each referrer a personal code or link, and record the source of every new customer in your CRM. Then you know who recommends you, can thank them and pay rewards reliably. Without tracking, programmes fall asleep after a few weeks.
Recommendation emails and reviews: the rules
In Germany, a “recommend us” function that sends emails from your website to a friend counts as advertising by your company and needs the recipient's consent; the Federal Court of Justice ruled so in 2013. Let customers forward a link themselves instead. Do not tie rewards to positive reviews: incentivised reviews mislead consumers and break platform rules.
Tax and costs
For private customers in Germany, referral rewards can count as other income; they stay tax-free as long as such income remains below €256 a year (§ 22 No. 3 EStG). Business partners book commissions as income. We set up referral codes, tracking and automatic thank-you messages in your CRM; tell us your process, and you will receive a fixed price.
Frequently asked questions
- How big should a referral reward be?
- Big enough to be noticed, small enough to stay profitable. Calculate what a new customer earns you in the first year and spend a fraction of that.
- Can I reward customers for Google reviews?
- No. Google prohibits incentivised reviews, and in Germany they can be misleading advertising. Ask for honest reviews without a reward.
- Does a referral programme work in B2B?
- Yes, often with partners rather than customers: accountants, agencies or suppliers who recommend you for a commission set out in a contract.
Sources
Tell us how customers find you today and what a new customer is worth. We will suggest a referral process and automate the tracking.
Plan a referral programme