A referral bonus is a reward or incentive given to a person who successfully refers someone else to a company, service, or program. Referral bonuses are commonly offered in employee recruitment programs and customer referral programs as a way to encourage people to bring in new talent or customers.
How Referral Bonuses Work
- Employee Referral Bonus: In many companies, current employees can refer candidates for job openings. If the referred candidate gets hired, the referring employee may receive a bonus. This helps companies find new hires through trusted sources.
- Customer Referral Bonus: Many businesses also offer referral bonuses to customers who refer new clients. If a customer refers a friend who then makes a purchase or signs up for a service, both the referrer and the new customer may receive rewards, such as discounts or credits.
Common Forms of Referral Bonuses
- Cash rewards
- Gift cards
- Discounts on future services or products
- Credits added to the referrer’s account
Referral bonuses are an effective way for companies to attract new talent and customers by leveraging word-of-mouth marketing and rewarding loyal individuals.