# Building Referral Programs That Scale Locally
Word-of-mouth has always been the lifeblood of Australian small businesses. However, waiting for customers to spontaneously mention your name over a coffee at South Bank isn't a strategy—it’s luck. To truly grow, you need a system that incentivises and automates these recommendations.
A structured referral program powered by email marketing allows you to scale your local reputation without adding hours to your work week. By the end of this guide, you’ll have a blueprint for a referral engine that works for your business 24/7.
Prerequisites
Before you start, ensure you have the following:- An active email marketing platform (e.g., Mailchimp, Klaviyo, or ActiveCampaign).
- A list of at least 50–100 past customers who have had a positive experience.
- A clear understanding of your profit margins (to ensure your reward is sustainable).
- An ABN and a registered business name to ensure your offers are legally compliant under Australian Consumer Law.
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Step 1: Define Your "Double-Sided" Incentive
The most successful referral programs in Australia use a "double-sided" approach: both the referrer (your current customer) and the referee (the friend) get a reward. This removes the "social awkwardness" of a customer feeling like they are profiting off a friend. Example: "Give $20, Get $20" or "Refer a friend for a free coffee, and they get their first one free too."Pro Tip: For service-based businesses like plumbers or accountants, consider a high-value physical gift (like a $50 Bunnings or Coles voucher) rather than just a discount on future services. It feels more like a tangible reward.
Step 2: Choose Your Tracking Method
You need a way to know who referred whom. For small local businesses, you have three main options:- Unique Referral Links: Most email platforms can generate these automatically.
- Coupon Codes: Give each customer a unique code (e.g., SMITH10).
- The Manual Mention: Ask the new customer "Who referred you?" during the onboarding process (harder to scale, but okay for very low-volume, high-value businesses).
Step 3: Segment Your "Advocate" List
Don't blast your entire list immediately. Start with your happiest customers. Create a segment in your email tool for customers who have:- Purchased more than twice.
- Left a 5-star Google Review.
- Been a client for over 6 months.
Step 4: Draft the "Invitation" Email
This is the most important email in the sequence. It needs to be personal and appreciative. Use a subject line that highlights the benefit to their friend first.- Subject Line: A gift for you and a friend from [Business Name]
- Body: Start by thanking them for their loyalty. Explain that as a local Brisbane business, you rely on great people like them to grow. Introduce the offer clearly.
Step 5: Create a Dedicated Landing Page
When a friend clicks the referral link, they shouldn't just land on your homepage. They should land on a page that says: "Your friend [Name] thought you'd love us! Here is your [Discount/Gift]."Include a clear Call to Action (CTA) like "Claim My Discount" or "Book a Consultation."
Step 6: Set Up Post-Purchase Automation
The best time to ask for a referral is right after a positive experience. Set up an automated email to trigger 2–7 days after a customer completes a purchase or service. Screenshot Description: In your automation builder, you will see a workflow starting with a 'Trigger' (e.g., Shopify Order Fulfilled). This is followed by a 'Time Delay' (e.g., 5 Days) and then the 'Send Email' action.Step 7: Automate the Reward Delivery
Nothing kills a referral program faster than a customer having to chase you for their reward. Use your email platform’s automation to send the reward email the moment the new customer makes their first purchase. Warning: Ensure your Terms and Conditions state that the reward is only valid after the referred friend's payment has cleared to avoid people gaming the system.Step 8: Promote Locally and Offline
Don't limit your program to the digital space. Print small "referral cards" to leave at your checkout or include in your packaging. Use a QR code on the card that links directly to your referral signup page.Step 9: The "Quarterly Push" Campaign
Every three months, run a "Referral Contest" to spike engagement. For example: "Refer a friend this month and go into the draw to win a $500 voucher for [Local Restaurant/Experience]."Step 10: Monitor and Optimise
Check your analytics monthly. Look at:- Participation Rate: How many people are sharing their link?
- Conversion Rate: How many referred friends actually buy?
- ROI: Is the cost of the reward lower than your usual Customer Acquisition Cost (CAC)?
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Common Mistakes to Avoid
- Making it too complex: If the customer has to jump through five hoops to get a $10 discount, they won't do it.
- Forgetting the 'Thank You': Even if you can't offer a massive discount, a personal email saying "Thanks for sending John my way" goes a long way in a local community.
- Ignoring Australian Privacy Principles: Ensure you aren't "spamming" the referred friend. The initial contact should ideally come from the referrer, or the friend must explicitly opt-in on your landing page.
Troubleshooting
- "No one is sharing the link": Your incentive might be too low, or your email is buried. Try moving the referral ask higher up in your post-purchase sequence.
- "People are referring themselves": Check IP addresses or email domains. Use a referral tool like ReferralCandy or SparkLoop that has built-in fraud protection.
- "The links aren't working": Always test your flow using a private/incognito browser window and a secondary email address before launching to your whole list.
Next Steps
- Calculate your maximum sustainable "Cost Per Acquisition."
- Draft your first referral invitation email using the "Double-Sided" logic.
- Set up a simple landing page on your website to welcome new referrals.
Need help setting up the technical side of your referral automation? The team at Local Marketing Group can help you integrate your CRM and email platforms to create a seamless experience. Contact us today to grow your Brisbane business through the power of automation.