referral-program

Start by choosing a model: two-sided rewards work best for subscription SaaS. Size the referrer reward at 10-25% of first-year LTV, provide a unique referral link with one-click sharing, and write separate copy for referrer and referee touchpoints.

Referral programs reward existing customers for inviting peers, typically with account credit or free months. Affiliate programs pay third-party promoters like creators and bloggers a commission, usually 10-30% of sales, tracked through affiliate platforms.

Viral coefficient K equals invitations sent per user multiplied by the invitation conversion rate. K above 1 means viral growth, around 0.5 is a healthy supplement to other channels, and below 0.2 indicates the program needs rework.

Low participation usually comes from poor visibility, bad timing, or weak incentives. Check that the referral link is in the main dashboard, prompt users after achievement moments, and test double-sided incentives instead of referrer-only rewards.

For low-price products, cash rewards can exceed product value, so use product-based incentives like free months, extended trials, or feature unlocks. Two-sided rewards where both parties benefit typically convert better than single-sided ones.

Require email verification, delay reward payout until the referred user activates, and apply device fingerprinting and IP monitoring. Cap lifetime rewards, require meaningful action before payout, and claw back rewards on refunds or chargebacks.