How to Create a Tenant Referral Program [+ Free Tools]

As a property manager, you know how crucial it is to retain tenants and fill vacancies. What if there was a way to reduce tenant turnover rate and create loyal tenants who rent from you for longer periods? If this sounds ideal, then a resident referral program may be exactly what you need.

Many property managers use referral programs as a way to maximize occupancy – for good reason. These programs are simple to run, and tend to be less expensive than other marketing methods, as you only pay when a referral signs a lease. The trick is creating a program that gets existing tenants to actually participate. 

Fortunately, we know a few tips for running a tenant referral program. Here’s everything you need for tenant referral program success.

What are tenant referral programs?

Tenant referral programs encourage your current tenants to recommend your properties to their friends, family, and colleagues. Whenever a referred friend or family member starts renting from you, you’ll give out rewards to the tenant who made the referral. 

The best way to run a tenant referral program is with a referral software platform, which automatically tracks the referrals your tenants make. Don’t use a DIY program where referred tenants must mention the name of the friend or family member who referred them – there’s the risk that referrals could get lost.  With software, you won’t have to keep track of referrals manually, and you’ll know exactly how your program is performing at a glance. 

Benefits of tenant referral programs

Why run a tenant referral program? Your property business will reap plenty of benefits, all rooted in the trust people place in their peers.

People trust their peers’ recommendations more than all other forms of advertising. So, referred tenants are more likely to sign a lease and rent property from you – four times more likely than non-referred tenants. This makes a tenant referral program a quicker way to fill vacancies at your properties. And referred tenants tend to be higher-quality. You’ll be marketing to people who are in the market for a new apartment or rental property, because tenants tend to refer people who are actively looking for a new place to live or work.

Referred tenants are also more likely to keep renting from you, increasing your tenant lifetime value and reducing your tenant turnover rate. (Referred friends have an approximately 16% higher lifetime value than typical tenants.) And by rewarding existing tenants for referring friends – and showing that you value their input by asking for referrals in the first place – you’ll incentivize existing tenants to continue to rent from you, further reducing turnover rates. 

Plus, tenant referral programs are more cost-effective than ads, listings, and other ways of finding new tenants. They’re also lower-risk  – you’ll only pay when the referred friend actually starts renting from you, and that payment is the reward that goes right to the referring tenant and their peer. 

Referral software for rental properties [Free Tools]

These referral tools for rental properties are a free and easy way to help you start your referral program.

Want a fully automated referral program for your rental business? Run your referral program with us at Referral Rock. Find out how we can build your program with you (and tailor it to your unique needs)

Tenant referral program essentials

For the most successful tenant referral program, you’ll need:

• A referrable business, with tenants ready to recommend you
• A reliable way to track referrals/issue rewards (that’s where referral software comes in)
• A motivating, dual-sided reward that’s easy to understand and redeem
• A program that’s easy to access and use overall
• A consistent promotion strategy, so tenants know about your program

Our expert best practices below will help you accomplish all of these key points.

Make sure you’re ready for referrals

Before you start a tenant referral program, ensure that you’ve made your business referrable. Here’s how to tell if you’ve got a tenant base that’s ready to send referrals your way. 

First off, do you have several tenants who have rented from you for a while? Loyal tenants are more likely to refer you, as they know most about the advantages of renting from you.

Second, do you go above and beyond in the tenant experience you provide? Providing exceptional service, including by following up on repair requests, ensuring you’re reachable if tenants have questions, and providing amenities all go a long way in giving tenants reasons to refer. 

Another great way to check your referability is to see if any individual tenants have shown clear signs that they’re satisfied and willing to refer you. 

• For instance, have they already shared stellar social comments or reviews? 
• Or, do you have evidence that they’ve already recommended you to friends? 

If they’re already sharing about your properties online, they’ll almost certainly keep sharing when rewards are involved.

Use referral software

Although you may be tempted to start a manual referral program (with print referral cards or emailed forms), this makes things difficult to track. A much better option is to use referral software. 

Referral software generates a trackable link that tenants can share in any way that works for them. Through each link, the software automatically traces every referral back to the tenant who made it – and since the link tracks the moment of purchase, software can also reward tenants for successful referrals right away. 

Thanks to software, you’ll be able to keep tabs on the status of every referral, who made it, and when it’s successful, and keep tenants updated on their referrals.

Referral Rock offers easy-to-use referral software that works for every business, including property managers. Our dedicated onboarding specialists will help you with every step of setting up and running your program. We have the expertise to get your program up and running quickly, so you can start seeing results as soon as possible.

Decide on motivating rewards

Rewards are the backbone of your program, as they’re what gets your tenants to start referring. 

But for the most success, don’t just reward the referring tenant. You should also reward the new tenant when they sign their lease, to motivate them to start renting from you. This is known as a double-sided referral reward.

What to offer the referring tenant and new tenant? Remember that rewards should be cost-effective for you, but also reflect the value of a new tenant.

For the referring tenant, we recommend offering cash, or a gift card to another business. These rewards let the tenant choose how to spend them, and people love the element of choice. If you’d prefer, you can also offer a rent discount, or a tangible gift that the tenant would appreciate. And if you’re still stumped on what to offer, why not ask the tenants themselves?

As for rewarding the new tenant, money off of rent is the best option, as this encourages them to rent from you – and remain your tenant.

Next, decide when the referring tenant will get their reward. This could be right after their peer signs the lease agreement, or 30-90 days after the lease is signed (as long as the new tenant continues to rent from you). You could also offer the best of both worlds –  a smaller reward after the new tenant signs the lease, and a larger reward if the new tenant continues to rent from you after a given number of months. 

To keep interest high, consider giving out rewards in tiers, where the value of the reward increases after someone gets a certain number of friends to sign leases. Or, give out higher rewards for higher-value rental properties. 

You might also start a referral raffle, where all successful referrals earn tenants an entry into a drawing for a bigger-ticket reward. But if you pick this option, you should still keep giving out the regular referral rewards to keep tenants motivated. Every successful referral should still be a winner – for both the tenants and your business.

Here’s more on how Referral Rock can help you set up referral rewards of all kinds.

Make referring easy

The easier it is for your tenants to refer, the more referrals you’ll gain. So, create a tenant referral experience that’s as streamlined as possible.

Referral Rock referral software will let you set up a streamlined referral page or portal that makes it easy for tenants to refer. You can even give out One-Click Access links that let tenants start referring right away, with no registration needed. Add these links to all emails where you promote your referral program, including transactional emails, so tenants can easily click and share.

To make sharing even easier, follow these best practices as you set up the page or portal that tenants will refer from. 

• Explain how the program works in 3-4 easy steps.
• Show the rewards (and other benefits of sharing) front and center.
• Enable tenants to share in as few clicks or taps as possible.
• Give multiple sharing options, based on the ways tenants regularly share things with friends.

• Give customers their own unique referral link to copy and paste anywhere.
• Pre-write a message from the tenant to their friend, so the tenant doesn’t have to think about what to say – they can just share right away.
• Include a clear, easy-to-find CTA on the landing page that directs tenants to share.

Promote your program

The more tenants you have participating in your program, the more chances you have to bring in successful referrals — and bring in more revenue. So, promote your program through a variety of customer touchpoints, to make sure tenants know about it. 

Here are some of our favorite ways to promote your tenant referral program:

• Via dedicated emails (personal and mass)
• On your social media pages
• Within physical and/or digital tenant newsletters
• On signs and postings placed on property
• In flyers that you place in tenants’ mailboxes, or place on or under tenants’ doors
• On your property website(s)
• On your online tenant portal
• In personal conversations with tenants

Remember, promotion shouldn’t stop at launch. After all, you might get new tenants who haven’t heard about the program yet – and you want the program to stay at the top of all tenants’ minds. So, have a strategy to keep promoting your program at regular intervals. 

We recommend sending a dedicated email about the program at least once every quarter, plus using social media, newsletters and other types of emails in between to advertise your program consistently. 

Show tenants you appreciate their referrals

Even if their referred friend doesn’t become a tenant, send a thank you note for every referral to show that you appreciate the tenant’s referral. This could be a written note or a simple thank you email. Rewarding tenants as soon as they earn an incentive is another important way to show your appreciation – software will do this automatically

Keeping tenants updated on their referrals’ status is another important way to show appreciation, and keep tenants motivated to make more referrals. 

Referral Rock’s Monthly Summary emails are an awesome way to keep  tenants in the know. These share a personalized overview of each tenant’s referral program activity every month, including referrals they’ve made, new customers they’ve created, and rewards they’ve earned. The Monthly Summary also keeps your program at the top of your tenants’ minds, making them more likely to keep sharing.

Start a tenant referral program today 

There are so many benefits to running a referral program for your properties. If you’ve determined that you’ve made yourself shareable, why not use a referral program to drive consistent sharing and gain new tenants?

Automation will make running a referral program much easier than setting up a DIY referral scheme. Rely on Referral Rock software for detailed tracking, instant issuing of rewards, and top-notch service that lets you get the most out of your tenant referral program. 

Check out how Referral Rock has helped businesses like yours.