Referrals

---
name: Referrals
description: Use when designing, optimizing, or analyzing referral programs, affiliate programs, or word-of-mouth strategies.
category: Growth & Retention
version: 2.0.0
tools: []
---

# Referral & Affiliate Programs

Help design and optimize programs that turn customers and partners into growth engines.

## Program Context

Gather (ask if not provided):
1. **Type** - Customer referral, affiliate, or both? B2B or B2C? Customer LTV? Current CAC?
2. **Current State** - Existing program? Current referral rate? What incentives tried?
3. **Product Fit** - Is it shareable? Network effects? Do customers naturally talk about it?
4. **Resources** - Tools/platforms considered? Budget for incentives/commissions?

## Referral vs. Affiliate

**Customer Referral Programs**
- Best for: Existing customers recommending to their network
- Characteristics: One-time/limited rewards, higher trust, lower volume
- Ideal for: Self-serve or lower-ticket products

**Affiliate Programs**
- Best for: Content creators, influencers, bloggers you don't have direct access to
- Characteristics: Ongoing commission relationship, higher volume, variable trust
- Ideal for: Higher-ticket products that justify commissions

## Referral Program Design

**The Referral Loop:**
Trigger Moment → Share Action → Convert Referred → Reward → Loop

**Trigger Moments (high-intent):**
- Right after first "aha" moment
- After achieving a milestone
- After exceptional support
- After renewing or upgrading

**Share Mechanisms (ranked by effectiveness):**
1. In-product sharing (highest conversion)
2. Personalized link
3. Email invitation
4. Social sharing
5. Referral code (works offline)

**Incentive Structure:**
- Single-sided: Simpler, works for high-value products
- Double-sided: Higher conversion, win-win framing
- Tiered: Gamifies process, increases engagement

## Common Problems & Solutions

| Problem | Fix |
|---------|-----|
| Low awareness | Add prominent in-app prompts |
| Low share rate | Simplify to one click |
| Low conversion | Optimize referred user experience |
| Fraud/abuse | Add verification, limits |
| One-time referrers | Add tiered/gamified rewards |

## Optimization

**If few customers refer:**
- Ask at better moments
- Simplify sharing process
- Test different incentive types
- Make referral prominent in product

**If referrals don't convert:**
- Improve landing experience for referred users
- Strengthen incentive for new users
- Ensure referrer's endorsement is visible

**A/B Tests:** Incentive amount/type, messaging, placement timing, single vs. double-sided rewards.

## Launch Checklist

- [ ] Define program goals and success metrics
- [ ] Design incentive structure
- [ ] Build or configure referral tool
- [ ] Create referral landing page
- [ ] Set up tracking and attribution
- [ ] Define fraud prevention rules
- [ ] Test complete referral flow
- [ ] Announce to existing customers
- [ ] Add in-app referral prompts
- [ ] Brief support team

## Key Metrics

**Program health:**
- Active referrers (referred someone in last 30 days)
- Referral conversion rate
- Rewards earned/paid

**Business impact:**
- % of new customers from referrals
- CAC via referral vs. other channels
- LTV of referred customers
- Program ROI

**Typical findings:** Referred customers have 16-25% higher LTV, 18-37% lower churn, and refer others at 2-3x rate.