Customer Referral Programs

Work back from what a customer is worth to you and what you already pay to acquire one elsewhere. A referral reward that costs less than your blended acquisition cost is worth paying; one that costs more is a discount programme wearing a different name. Two-sided credit is usually the cheapest structure that still works, because credit costs margin rather than cash.

Both, in most cases. A one-sided reward asks the sharer to do a friend a favour on your behalf; a two-sided one gives them something to offer. The referred customer's side also does double duty, because a first-order discount lifts the conversion rate of the traffic the referral sends.

After the refund window, in almost every case. Referly can trigger a reward on signup, on purchase, or as a bonus, and separately holds commissions for a period you set before they become payable, with payout terms from NET 0 to NET 60. Paying on signup before a refund window closes is how a referral programme ends up funding fraud.

That depends on your jurisdiction and the reward type, and it is a question for your accountant rather than for us. What Referly does is collect the paperwork: W-9, W-8BEN and W-8BEN-E forms with the tax identification number encrypted at rest, and EU self-billing invoices with VAT validation where they apply. Tax form collection and invoicing start on the Business plan.

Referly matches the buyer's email and IP against the referrer's on every plan, and you choose whether a match holds the reward for review or rejects it outright. Clicks also carry proxy and VPN flags, which catches the more deliberate version.

Some of them, yes, that is incrementality, and it is the number nobody measures. A holdout group is the only clean answer and most companies at this size cannot run one honestly. The practical substitute is watching whether referral acquisition cost stays below your blended acquisition cost as volume grows, and treating it as a warning if it does not.

A spreadsheet is genuinely fine for the first handful of referrals. It stops being fine at the first refund, the first reward owed to someone in another country, and the first time two customers claim the same referral. The referral widget, which gives each customer a personal link, coupon and QR code with one-click email invites, starts on the Business plan.

Who promotes, and why. A referral program is your customers, occasionally, because they like the product and want the reward. An affiliate program is publishers, review sites and creators, continuously, because it is how they earn. The reward shapes differ accordingly, credit and discounts for customers, a percentage of the sale for affiliates. Most companies end up running both.