How to make money from the firms you like
Many companies give loyal customers cash for referring others – and some can earn thousands, says Sam Meadows
Giving tips to your friends could net you thousands in rewards from your favourite companies in banking, transport and utilities. Referral reward schemes are increasingly common among start-up firms, whose success relies on rapidly building their customer base in a crowded market.
Typically, customers can earn a fee of around £25-£50 when they tell a friend about a company and that person joins or starts using the service. The friend will also get a similar amount. Sometimes, the reward will be in vouchers and sometimes simple cash payments. Some firms offer even larger sums.
Many of the digital banks that have sprung up in the past five years have made a reward scheme part of their growth plan, as they attempt to topple the stranglehold of the massive high-street banks.
Tandem, for example, offers customers a £10 Amazon voucher if they sign up a friend using a referral code. The new user also gets a £10 voucher. Fellow online bank Monzo is now also trialling top-ups for customers who sign up friends.
The British energy market is the most competitive it has been in years, with well over 50 suppliers operating in the UK.
Smaller energy companies are having to work hard to attract custom and, as a result, many have embraced referral schemes, including Bulb, Pure Planet and Ovo Energy. The rewards can be large.
Bulb claims that one customer has made £177,000 by referring others. At £50 a go, many have made far smaller gains, but these can still be significant. The company says it has 210 “super referrers”, who have made more than £1,000 from the scheme. It has paid £6.3m in referral fees.
Joe Baguley, 45, who lives in Marlow in Buckinghamshire with his wife and two daughters, has been with Bulb for two years. He says he has effectively got a year’s free energy by referring others. He started out telling his friends and family but, once he had exhausted that resource, began sharing his referral code on social media groups that he is a part of.
“I’m in a Tesla owners’ group on Facebook, and people are often posting in there asking for Bulb referral codes,” he said. “So it’s a scramble to be the first one to post. There are a few thousand members in there so it can be quite lucrative.”
Mr Baguley, who works in technology, added: “I’ve made £1,500 from the referral scheme so that’s at least 30 people. I was already on a renewable energy tariff before I joined Bulb, but it was cheaper and had no lock-in. That means any price rises are its own risk, not mine.”
With Bulb, both the referrer and the new customer get £50. This is similar to other schemes in the energy market; Pure Planet and Ovo Energy give both parties a £25 voucher, the former for Amazon and the latter for a number of retailers including Marks & Spencer and Waitrose.
Dog-lover Jess Tuck, 25, and her partner Nick, 38, from Stoke-on-trent paid for a holiday to Spain with the £1,100 they have made referring people to Bulb in the past year.
The couple made a saving when they switched from British Gas to Bulb and say the flexibility of the scheme meant they could bank their referral fees until they were ready to spend.
Ms Tuck, who is studying canine behaviour at university and plans to set up a business helping dog owners when she leaves, said: “We love the fact you can either bank it, so you don’t have to pay gas and electric each month, or you can withdraw it. We
‘We’re working on spreading the word further – to pay for our next holiday’
waited until we had built up a good amount, called them to transfer it into my bank account and we booked a gorgeous villa in Spain for a week. We’re now working on spreading the word further – for our next holiday.”
Bulb was founded in 2015 and is growing rapidly – it now has 780,000 customers. And many other start-ups are making use of similar schemes.
When Uber, the taxi-booking app, burst on to the scene just over five years ago, part of the secret to its rapid growth was that customers were given £10 off when they signed up a friend. The company still runs a similar scheme, although the reward has been cut to £5 apiece.
But the tactic isn’t restricted to new and growing companies. Some industry giants offer healthy rewards to those who spread the word.
Sky TV offers £50 on a prepaid Mastercard, while Virgin Media offers £50 off its TV and broadband services. Many high-street banks attempt to entice customers to switch their current accounts with pay-offs or free gifts; Nationwide will give customers £100 while First Direct gives you the chance to get a free Fitbit, among other options.
Mobile networks, too, make use of these new-customer payments. Three, one of Britain’s largest operators, gives customers a £25 voucher if they refer someone who buys a 12-month Sim-only deal or a two-year deal including a phone.
Supermarket delivery firm Ocado also has a referral scheme, which offers the new customer £20 off their first order of £80 or more and a year’s “smart pass” – giving free delivery. The existing customer will get a £20 voucher once their friend has signed up.
Jane Dyer, 52, from Alderley Edge, near Manchester, has made £120 from the scheme by referring about six people. She said: “It’s all been people I know. I do love Ocado and the service it provides so I don’t mind telling my friends.
“The deliveries are really reliable. In a year and a half it only missed the time-slot once, and that was when there was very bad weather.”
When it comes to consumer goods at least, it pays to be popular.