The debate over referral rewards is one of the biggest misunderstandings in business. Some business owners refuse to offer incentives, afraid of “bribing” customers. Others only get referrals when they run contests or giveaways.

So what’s the right way to do it?

In some industries, structured rewards work great. I’ve seen chiropractors turn referrals into a competition—monthly luncheons where referrers are publicly recognized, prizes for top referrers, even limo rides and exclusive nights out for the "Patient of the Month."

Martial arts schools hold “Bring a Friend” movie nights, renting out a theater for students and their guests, driving massive word-of-mouth.

And it works.

But here’s the catch: you have to be okay with the fact that you’re training customers to only refer when there’s a reward.

For some businesses, that’s fine. For others, it cheapens the value of the referral.

Instead of offering an upfront incentive, what if you surprise referrers with a gift after they send someone your way?

When a customer refers for the first time, we know something about them:

• They have people in their network who could be customers.
• They’re already comfortable referring.
• They’ll likely do it again if encouraged the right way.

So instead of a generic “thank you,” imagine sending a thoughtful, personal gift.

Not some big Harry & David fruit basket. Something that actually matters to them.

If they play golf, send a unique golf accessory.

If they homeschool their kids, a fun educational tool.

If they love cigars, a high-end lighter with their initials engraved.

It’s not about price, it's about relevance. The right unexpected gift makes a customer think, “Wow. They really get me.”

And you better believe they’ll refer again.

Because the truth is, the right reward encourages more of the behavior you want.

And ignoring a referral? That does the opposite.

Ever sent a referral and didn’t even get a thank-you? It you never want to do it again, right?

That’s why most businesses fail at referrals. They either over-rely on bribes, or they don’t reward at all.

The businesses that win are the ones that turn referrals into a natural, rewarding experience.