referral-program

Gather this context:

1. Program Type

• Customer referral program, affiliate program, or both?
• B2B or B2C?
• What's the average customer value (LTV)?
• What's your current CAC from other channels?

2. Current State

• Do you have an existing program?
• What's your current referral rate?
• What incentives have you tried?

3. Product Fit

• Is your product shareable?
• Does it have network effects?
• Do customers naturally talk about it?

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Customer Referral Programs

Best for:

• Existing customers recommending to network
• Products with natural word-of-mouth
• Lower-ticket or self-serve products

Affiliate Programs

Best for:

• Reaching new audiences
• Content creators, influencers
• Higher-ticket products

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The Referral Loop

```

Trigger Moment → Share Action → Convert Referred → Reward

↑ │

└────────────────────────────────────────────┘

```

Step 1: Identify Trigger Moments

When are customers most likely to refer?

• Right after first "aha" moment
• After achieving a milestone
• After receiving exceptional support
• When they tell you they love the product

Step 2: Design the Share Mechanism

Methods ranked by effectiveness:

1. In-product sharing
2. Personalized link
3. Email invitation
4. Social sharing
5. Referral code

Step 3: Choose Incentive Structure

Single-sided rewards (referrer only):

• Simpler to explain
• Works for high-value products

Double-sided rewards (both parties):

• Higher conversion rates
• Creates win-win framing

Incentive Types

| Type | Best For |

|------|----------|

| Cash/credit | Marketplaces, fintech |

| Product credit | SaaS, subscriptions |

| Free months | Subscription products |

| Feature unlock | Freemium products |

Incentive Sizing

Calculate your maximum:

```

Max Reward = (Customer LTV × Gross Margin) - Target CAC

```

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Key Metrics

Viral coefficient (K-factor):

```

K = Invitations × Conversion Rate

K > 1 = Viral growth

K < 1 = Amplified growth

```

Referral rate:

```

Referral Rate = Customers who refer / Total customers

```

Benchmarks:

• Good: 10-25%
• Great: 25-50%
• Exceptional: 50%+

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If few customers are referring:

• Ask at better moments
• Simplify the sharing process
• Test different incentive types
• Make the referral prominent

If referrals aren't converting:

• Improve the landing experience
• Strengthen the new user incentive
• Ensure referrer's endorsement is visible

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Program Design

```

Incentive Structure

• Referrer gets: [Reward]
• Referred gets: [Reward]
• Timing: [When rewards are given]

Mechanics

• Trigger moments: [When to prompt]
• Share methods: [How they share]
• Tracking: [How it's tracked]

Launch Plan

1. [Step]
2. [Step]
3. [Step]

Success Metrics

• Referral rate target: X%
• K-factor target: X
• CAC via referral: $X

```

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• launch-strategy: For launching referral program
• email-sequence: For referral nurture campaigns
• marketing-psychology: For understanding referral motivation