How to Build and Grow a Restaurant Referral Program

Word-of-mouth marketing is still the most effective way to reach new customers. In fact, 61% of diners turn to friends, family and coworkers to discover new restaurants.

While it might seem a little old school, nothing beats a personal recommendation from a diner who knows and loves your restaurant — not even social media influencers or review sites. Only 22% of diners turn to influencers for restaurant recommendations and even fewer visit Yelp (15%).

But there’s a way to make word-of-mouth recommendations even more powerful — incentivize them through a restaurant referral program.

Keep reading to learn about the benefits and best practices of referral programs.

The importance of a restaurant referral program

Creating a restaurant referral program isn’t just a smart marketing move — it’s a mutually beneficial way to turn diners into your biggest advocates.

Supercharges word-of-mouth marketing: A referral program formalizes and incentivizes what’s already a powerful marketing tool. When there’s something extra in it for diners, they will put more effort into referring more people more often.

Creates superfans: It feels good to be appreciated. Rewarding diners with a secret menu item or exclusive event invite keeps them singing your praises and coming back for more.

Increases engagement: Referral marketing programs encourage diners to be part of your restaurant’s story. This can create a sense of belonging that motivates guests to engage with your social media posts and refer friends.

Gives you a competitive edge: Rewarding customer loyalty shows you value their patronage, giving you an edge over restaurants without referral programs.

Provides valuable insights: Tracking referrals gives you valuable data about your customers. You’ll learn who your biggest advocates are and what makes them tick, helping you create highly targeted offers that surprise and delight.

Best practices for building an effective referral program

You get more guests, and your guests get rewards — what’s not to love? Here’s how to create a referral program that builds a community of supporters who promote your restaurant both online and off.

Set measurable goals

Clear objectives guide your program's structure and help measure its success.

Common goals include:

Attracting new guests

Increasing guest retention.

Generating positive reviews

Boosting revenue

Even if your goals include all of the above, it’s important to quantify them. Measurable goals will help you evaluate your program’s success. For example, 50 new guests each month or a 20% increase in repeat visits in six months.

It’s also important to set key performance indicators (KPIs) to track your program’s success:

New business acquired through referrals

Total referrals made

Reward redemption rates

Increases in sales or repeat visits

Take advantage of the power of automation

While you can set up a referral program on your own, using software like SevenRooms streamlines — and automates — the process. This means team members won’t have to manually create links, track referrals or reward guests.

When selecting a program, look for essential features like automated reward distribution, easy integration with your existing POS, CRM and email marketing software and detailed analytics.

For example, SevenRooms’ software lets you create a referral program in minutes. Once you’ve set up your program, including choosing Perks like early reservation access or a kitchen tour, your work is largely done.

When participants sign up, they’ll automatically receive a personal link to share with friends and family. (This is also how you’ll track guest participation.)

FYI

SevenRooms’ Referral Program gives you the option to reward referrers and referred guests, ensuring your program benefits both parties. For example, existing customers might get a gift card for referring guests, while new customers get a complimentary welcome cocktail. This creates a memorable experience, helping to ensure both guests return.

Choose rewards based on guest preferences and data

Now comes the fun part — choosing rewards. They should be enticing enough to encourage participation but also sustainable for your business.

Monetary rewards like discounts aren’t your only option — experiential rewards can also be motivating.

Exclusive experiences: Priority reservations, a chef's table or a special tasting menu

Complimentary items: Perks like free appetizers, desserts or a champagne toast

Gift cards: $X amount toward a future visit

Before you settle on the right rewards for your program and guests, consider these best practices:

Give guests a voice (and a choice)

Instead of assuming what your customers want, why not ask them directly? This ensures your rewards are attractive and makes participants feel valued and heard.

Email your customer base to ask guests what types of rewards would motivate them to participate in a referral marketing program. Pay attention to overlap — if the majority of guests want the same rewards (or similar), add them to your program.

Tailor rewards to customer behavior

Use a customer relationship management (CRM) system like SevenRooms that connects referral data to guest profiles. This provides insight into diner behavior and preferences. It also enables you to segment customers based on demographics, spending habits and visit frequency so you can understand what drives customer behavior.

For example, high-frequency diners might be more motivated by rewards that enhance their dining experience, such as exclusive menu tastings, priority reservations or personalized service. While value seekers may be more enticed by loyalty points or gift cards.

Offering a variety of rewards that speak to different types of diners widens your program’s appeal and effectiveness.

Promote your program through all channels

Guests can’t sign up for your referral program if they don’t know about it. Promote it everywhere possible for the best results.

Drum up excitement about your referral program on social media. Craft engaging posts and stories that showcase the benefits of joining the program and feature top participants. Nothing is more persuasive than showcasing an actual customer redeeming their reward.

Email marketing

Create personalized emails that explain the perks of your referral program and provide clear instructions on how to participate.

Announcement email: Send an initial announcement email to introduce your referral program, explaining how it works and the benefits of participating. Highlight the rewards customers can earn by referring friends.

Reminders: Send periodic reminders, especially to loyal customers who have not yet participated. The key is using a CRM that integrates with your referral program and email software to identify these customers and segment them for targeted offers.

Incentive updates: Keep customers informed about upcoming or seasonal rewards. Highlight a new referral bonus or limited-time offers to encourage immediate action.

Special events: Invite top referrers to exclusive events or tastings to thank them for their participation and enhance the customer experience. Showcase these events on social media to generate a little FOMO and encourage new signups.

Feedback requests: Send post-dining feedback surveys to thank guests for their patronage and promote your referral program at the same time. You can also survey program participants to learn what customers like and what could be improved. Refine your program as needed to ensure it’s a win-win for you and your guests.

VIP invites

Use guest data to identify high-value guests so you can send them personal invites to your referral program. For example, SevenRooms' CRM lets restaurant owners create custom tags like "Regular” and "Positive Reviewer" to easily define and segment these guests.

Use this information to create customized emails that address guests by name and feature targeted perks. For example, if a guest has attended your wine tastings in the past, let them know they’ll get a bottle of their favorite red upon referring 10 guests. This can be highly motivating and encourage more participation from your most valuable guests.

Website promotion

Dedicate a page on your website to your referral program so you can highlight rules and rewards. You’ll also be able to direct guests here if you use a QR code on promotional materials. Use clear language so diners understand how to sign up, share referral links and redeem rewards.

Partnerships

Consider partnering with neighboring businesses to promote your program. Ask to put flyers in store windows or at cash registers to reach new customers.

Influencers can also be beneficial. Look for those with an engaged following that aligns with your target market. Content that shows influencers redeeming rewards, like special menu items and gift cards, can entice their followers to sign up for your program and refer friends, too.

In-restaurant

Take advantage of prime real estate: Think table tents, menus and receipts. Highlight rewards and participation information as concisely as possible. Use QR codes that guests can easily scan to learn more and sign up.

Train servers to mention your program: Servers see countless guests per day. Take advantage of this by having them mention your referral program during meals.

Reward loyalty and reap the benefits

A customer referral can turn into a customer for life. Invest in a restaurant referral program to incentivize your biggest fans to keep customer retention high and a steady stream of new business flowing into your restaurant year-round.

Learn how SevenRooms’ Referral Program, CRM and Marketing Automation software can help you reward guests and create highly targeted offers that foster loyalty and retention. Book a demo today.

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