One-Sided vs Two-Sided Rewards: Which Gets Singaporeans to Actually Refer?

You give your customer $20 for every friend they bring in. Simple, right? But there is a question most SMEs never ask: should the friend get something too?

This is the difference between a one-sided reward (only the referrer benefits) and a two-sided reward (both the referrer and the friend benefit). The choice changes how many people actually refer you.

Why One-Sided Rewards Feel Risky to Give

In Singapore, many people are uncomfortable sending a friend to a business purely so they can collect a reward. It feels transactional, almost like they are profiting off the friendship.

This discomfort is one of the biggest silent reasons referral programs underperform. The customer loves your service, but hesitates to say "refer me and I get paid" out loud.

What a Two-Sided Reward Changes

When the friend also gets something, like $20 off their first purchase, the conversation flips. The customer is no longer asking for a favour. They are sharing a deal.

"Eh, you should try this clinic, you get $20 off if you use my code" feels completely different from "please sign up so I get $20." One is generous. The other feels self-serving.

When Two-Sided Rewards Work Best

• High-consideration purchases: clinics, renovation, insurance, tuition. The friend needs a reason to trust a new provider, and a discount lowers that barrier.
• Price-sensitive categories: F&B, fitness, beauty. A small discount nudges a "maybe later" into a "let's try it this week."
• New businesses with few reviews: the friend's incentive compensates for the lack of social proof.

When One-Sided Rewards Are Fine

If your service already has strong demand or a waitlist, you do not need to sweeten the deal for the friend. The referrer's reward alone is enough to motivate the ask.

One-sided rewards also work better for premium or luxury positioning, where discounting to new customers could cheapen the brand.

The Budget Question Every SME Owner Asks

Two-sided rewards cost more per referral since you are paying out twice. But they usually convert at a higher rate, so the cost per new paying customer can still work out lower.

Here is a simple way to test it without guessing:

1. Run your current one-sided reward for 4 weeks and note the referral count.
2. Switch to a two-sided version for the next 4 weeks, keeping the referrer's reward the same.
3. Compare total referrals and total cost per new customer, not just the raw count.

Most SMEs find the split does not need to be equal. A $20 reward for the referrer paired with a $10 discount for the friend often performs nearly as well as $20 and $20, at a lower total cost.

The Singapore Context: Discount Culture Helps You

Singaporeans actively look for deals, from UOB promotions to Shopee vouchers. A referral discount for the friend fits naturally into that mindset. It does not feel like a gimmick, it feels like a normal part of shopping here.

This cultural fit is exactly why two-sided rewards tend to outperform one-sided ones for most local SMEs, even though they cost slightly more per referral.

The Takeaway

If your referral numbers are low and you have never tried giving the friend something too, that is worth testing before you blame your product or your customers.

Sometimes the barrier was never "my customers don't like referring." It was that referring felt awkward without something in it for the friend as well.

Want to run this kind of A/B test without building spreadsheets by hand? Join ReferSales as a founding member and track one-sided versus two-sided rewards automatically, with real conversion data for your business.