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Also known as: refer-a-friend, customer referral

Referral Program

FoundationalMarketingStrategies

Definition

Referral Program: A referral program incentivizes existing customers to recommend your product to others, typically offering rewards to both the referrer and referred. Referral programs leverage customer satisfaction and network effects to acquire new customers at lower costs than paid channels. They work best when the product naturally comes up in conversation.

Example Usage

“Our referral program offers both parties one month free. It generates 20% of new customers with 40% higher retention than paid channels.”

Common Misconceptions

Any product can go viral with referrals. Products must be worth talking about and relevant to share.
Higher rewards mean more referrals. Simplicity and timing matter as much as incentive size.
Referral programs are set-and-forget. They need promotion, optimization, and A/B testing like any channel.

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