How to Get More Customers with Referral Marketing

In today’s competitive landscape, traditional marketing can only take you so far—especially if you're running a local business like a nail salon, auto repair shop, gym, or dental clinic. The real power lies in word-of-mouth and referrals.

A referred customer already trusts your business because someone they know recommended it. This is where referral marketing shines—and with the right system in place, you can automate it entirely.

In this guide, we’ll show you how referral marketing works, why it’s especially effective for local businesses, and how to set up a system that runs on autopilot to grow your customer base.

Why Referral Marketing Works So Well for Local Businesses

People Trust People

According to Nielsen, 92% of consumers trust recommendations from friends and family more than any other form of advertising. That means a personal recommendation is far more powerful than a flyer, ad, or online review.

When you make it easy for happy customers to refer their friends, you’re unlocking a growth channel built on trust.

It’s Cost-Effective and Scalable

Instead of spending thousands on ads or relying on foot traffic, referral marketing grows as your customer base grows. Each new customer can turn into a promoter, creating a flywheel effect.

Local Businesses Thrive on Repeat Visits

Unlike eCommerce, most local businesses rely on repeat customers—salons, gyms, mechanics, and even dentists. A referral program keeps them engaged and gives them a reason to return and refer.

How to Start a Referral Program for Your Business

Collect Customer Contact Info

Make sure you’re collecting emails or phone numbers when someone visits your business. This lets you follow up later and offer them a referral code.

Tip: Use digital receipts or online bookings to automatically capture contact details.

Offer a Win-Win Incentive

Your referral program should reward both the person referring and the person being referred. For example:

Give both $10 off their next visit.
Offer a free add-on service or upgrade.
Run monthly prize draws for top referrers.

Keep it simple, desirable, and related to your service.

Make It Easy to Share

People are busy. If it’s hard to share their referral code, they won’t do it.

Instead, allow one-tap sharing through:

WhatsApp
SMS
Email
Social media

Tools like Referralpin let your customers share with a single tap—no app downloads, no sign-ups needed.

Track and Automate Everything

To make referral marketing work long-term, you need automation:

Send referral codes by email or SMS.
Track who shared, who redeemed, and when.
Automatically issue rewards.

Referralpin handles all of this for you, so you can focus on running your business while your customers do the marketing.

Real-World Examples of Referral Success

Nail Salon

A small nail salon added a simple referral program: “Give $10, Get $10.” In two months, 80% of new clients came from referrals.

Gym

A local gym sent referral codes to members every month. Members shared via WhatsApp, and new sign-ups increased by 34% in 90 days.

Auto Repair Shop

A mechanic offered a free oil change for every 3 friends referred. The result? A steady stream of new customers—without spending on ads.

Common Mistakes to Avoid

Asking customers to download an app — most won’t.
Making the rewards too complicated — stick to one simple offer.
Not promoting the program — mention it in emails, in-store, and on receipts.