Referral Programs

Referral Program Design

When to Activate

• Building a referral or refer-a-friend program from scratch
• Improving an existing referral program with low participation or conversion
• Reducing CAC by leveraging existing customer networks
• Increasing word-of-mouth as an acquisition channel
• Designing incentive structures for user referrals
• Evaluating whether a referral program is right for the business

First Questions

1. What is your current word-of-mouth or organic referral rate? (Do customers already recommend you?)
2. What is your product's NPS or customer satisfaction score?
3. What is your current CAC? (Referral reward must be less than this)
4. What is your average customer LTV? (Determines affordable referral reward)
5. What does your product's natural sharing moment look like? (When are users most delighted?)
6. What has your audience responded to before? (Cash? Discounts? Status?)
7. Do you have a mechanism to track referrals? (Unique links, codes, in-app system?)

Prerequisite: Should You Build a Referral Program?

Referral programs amplify existing word-of-mouth. They do not create it.

Build a referral program if:

• NPS > 30 (customers actively recommend you)
• You already see organic referral behavior (people sharing without incentive)
• Your product solves a visible problem (others can see the user benefiting)
• Your target audience is in networks (professional communities, friend groups, teams)

Fix the product first if:

• NPS Subject: Your friends would thank you for this

> > Hey [Name], you've [achieved X / saved $Y / been with us for Z months]. Know someone who'd benefit too? > > Give them [reward] and you'll get [reward] when they [action]. > > [Share Now Button]

In-App Prompt: > You just [completed milestone]! Know someone who'd love this? > Share your link and you both get [reward]. > [Copy Link] [Share via Email] [Share via SMS]

Post-Purchase: > Thanks for your order! Love [product]? Share it with a friend. > They get [reward]. You get [reward]. > [Your unique link: referral.link/username]

Measuring Referral Program Health

Key Metrics Dashboard

| Metric | Definition | Target | |--------|-----------|--------| | Participation Rate | % of eligible customers who share at least once | 10-25% | | Shares per Referrer | Avg referrals sent per participating customer | 2-5 | | Referral Conversion Rate | % of referred people who convert | 10-30% | | Referral CAC | Cost of referral rewards / Referred customers acquired | 3:1 |

Health Indicators

• Healthy: Participation growing, K-factor stable or improving, referral LTV > average LTV.
• Declining: Participation dropping (audience saturation), gaming increasing, quality declining.
• At risk: K-factor 30 or do you see organic referral behavior already?
• [ ] Is the referral reward less than your paid CAC?
• [ ] Is the sharing mechanism 1-2 clicks maximum?
• [ ] Have you pre-written and tested the referral messaging?
• [ ] Have you built fraud prevention measures?
• [ ] Are you triggering referral asks at the right moments (post-value, not pre-value)?
• [ ] Can you track referral attribution end-to-end?
• [ ] Have you planned a testing cadence to optimize incentives and messaging?
• [ ] Is the referral landing page personalized and conversion-optimized?

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: brainbytes-dev
• Source: brainbytes-dev/everything-claude-marketing
• License: MIT

Install and usage instructions live in the source repository linked above.