Work out referral program value instantly with clear inputs, formula shown and shareable results.
Referral programmes usually deliver the lowest acquisition cost of any channel, because the reward is paid only on success. Comparing that effective cost against paid acquisition shows how much budget should shift towards advocacy.
Referral value
Customers = referrals × conversion rate; net value = customers × (lifetime value - reward)
Figures are estimates based on the inputs given. Marketing performance, platform fees and conversion behaviour vary by audience, channel and season. Use this as a planning guide, not a forecast.
Two-sided rewards typically convert better, since the referrer has something worth passing on.
They arrive pre-qualified through a trusted recommendation, and usually show higher retention than paid acquisition.