Referral Program Design

Purpose

Design a referral program that turns existing users into an acquisition channel. Define the incentive model, sharing mechanics, copy, and launch plan. Focus on programs that actually get used — not "refer a friend" links that collect dust.

Reads

brand/audience.md — Personas, what they value, their networks
brand/positioning.md — Value props, pricing context for incentive sizing
brand/voice-profile.md — Brand voice for all referral copy

Brand Integration

audience.md — Incentive type depends on audience. B2B audiences prefer account credits. B2C audiences prefer discounts or free months. Developer audiences prefer swag or extended trials.
positioning.md — Referral messaging reinforces the brand's positioning angle, not generic 'share with a friend' copy. If positioning is around simplicity, the referral CTA is 'Know someone drowning in complexity?'
voice-profile.md — All referral copy (dashboard prompts, share text, emails) should match the brand voice. A casual brand writes "Your friend's gonna love this" while a professional brand writes "Share a professional recommendation."

Workflow

Step 1: Choose Referral Model

Evaluate and recommend the right model:

One-Sided (Referrer only gets reward)

Best for: High-value products, enterprise, low-frequency purchases
Pros: Simple, lower cost per referral
Cons: Less motivation for referee to convert
Example: "Give your friend our link, you get $50 credit"

Two-Sided (Both get reward)

Best for: SaaS, marketplaces, subscription products
Pros: Higher conversion (referee has incentive), feels fair
Cons: Higher cost per referral
Example: "Give $20, get $20"

Tiered (Rewards increase with referral count)

Best for: Products with power users, community-driven products
Pros: Creates referral champions, gamification
Cons: Complex to communicate, top-heavy rewards
Example: "1 referral = 1 month free. 5 = premium forever."

Milestone (Unlock rewards at specific counts)

Best for: Products wanting viral moments
Pros: Creates sharing bursts, clear goals
Cons: Can feel like a grind
Example: "3 friends = swag. 10 friends = lifetime access."

Selection criteria:

Product price point and margins
Customer lifetime value (can you afford the incentive?)
Network effects (does the product get better with more users?)
Purchase frequency (one-time vs recurring)

Step 2: Define the Incentive

Incentive Types

| Type | Best When | Example | |------|-----------|---------| | Account credit | Recurring subscription | "$20 off next month" | | Extended trial | Freemium model | "+7 days of Pro" | | Feature unlock | Gated features exist | "Unlock advanced analytics" | | Cash/gift card | High LTV, B2B | "$50 Amazon card" | | Discount | E-commerce, one-time | "25% off next purchase" | | Donation | Mission-driven brand | "$10 to charity of choice" | | Exclusive access | Waitlist/beta | "Skip the waitlist" | | Physical swag | Community brand | "Free branded merch" |

Incentive Sizing Rules

Referrer reward should be 10-25% of first-year LTV
Referee reward should lower the barrier to first purchase
Two-sided: referee reward can be smaller than referrer reward
Always test: the "right" incentive is discovered, not guessed
Stack with existing promotions cautiously — don't train discount hunters

Step 3: Design Sharing Mechanics

Sharing Methods (Offer All, Optimize for Top 2)

Unique referral link (required, baseline)

Personal URL: product.com/ref/[username] or product.com/r/[code]
One-click copy button
Auto-populated share text

Referral code (supplement to link)

Short, memorable: 4-6 characters
Personalizable: user's name or custom code
Easy to share verbally

Email invite (high-intent channel)

Import contacts option (Google, Outlook)
Or manual email entry
Pre-written message, editable by user

Social sharing (volume channel)

Twitter/X: Pre-populated tweet with link
LinkedIn: Professional framing for B2B
WhatsApp/SMS: Direct message with link
Platform-native share sheet on mobile

In-product prompts (highest conversion trigger)

Post-success moment: "You just [achievement]! Share with a friend?"
Milestone celebration: "You've been using [Product] for 30 days!"
Team detection: "Looks like [colleague] could use this too"

Friction Reduction Checklist

[ ] One-click sharing (no extra steps)
[ ] Pre-written share text (editable)
[ ] Referral link visible in dashboard at all times
[ ] Mobile-optimized sharing flow
[ ] No login required for referee to see the offer
[ ] Referee landing page explains the incentive immediately

Step 4: Write Referral Copy

Referrer-Facing Copy

Dashboard prompt:

Give [incentive], Get [incentive]

Share [Product] with friends and you both get rewarded.
You've earned [X] so far from [Y] referrals.

[Copy Your Link]  [Invite by Email]

Post-achievement trigger:

Nice — you just [achievement]!

Know someone who'd love this too?
Share your link and you both get [incentive].

[Share Now]  [Maybe Later]

Email nudge:

Subject: You have $[X] in referral rewards waiting

You've been using [Product] for [X] weeks and
[specific achievement]. Know someone who'd benefit?

Share your personal link and you both get [incentive]:
[referral link]

[Share via Email]  [Copy Link]

Referee-Facing Copy

Referral landing page:

[Referrer name] invited you to [Product]

[Referrer] thinks you'd love [Product] — and they're
giving you [incentive] to try it.

[What Product Does — one sentence]

[Claim Your [Incentive]]

[Social proof: X users, rating, testimonial]

Referee welcome email:

Subject: [Referrer] gifted you [incentive] for [Product]

Welcome! [Referrer name] shared [Product] with you
and you've got [incentive] waiting.

Here's how to get started:
1. [Quick start step]
2. [Quick start step]
3. [Quick start step]

[Get Started with [Incentive]]

Step 5: Plan Launch Strategy

Pre-Launch (1 week before)

Seed with top 10% most active users first
Personal email from founder: "You're getting early access to our referral program"
Goal: Get first 50 referrals to validate mechanics

Launch (Week 1)

In-app announcement banner for all users
Email blast to full user base
Social media announcement
Add referral link to user dashboard permanently

Sustained Growth (Ongoing)

Trigger-based prompts (post-achievement, milestone, NPS 9-10)
Monthly referral leaderboard (optional, for tiered/milestone)
Seasonal boost: "Double rewards this month"
New user onboarding: mention referral program during setup

Viral Coefficient Calculation

Viral Coefficient (K) = i x c

i = invitations sent per user
c = conversion rate of invitations

K > 1 = viral growth (each user brings >1 new user)
K = 0.5 = healthy referral supplement
K < 0.2 = program needs work

Example:
- Average user sends 5 invites
- 15% of invites convert
- K = 5 x 0.15 = 0.75 (strong, not viral)

To improve K:
- Increase i: More sharing triggers, easier sharing mechanics
- Increase c: Better referee landing page, stronger incentive