Referral Incentive

A reward offered to existing customers or contacts for referring new customers, typically a discount, commission, upgrade, or free product, designed to accelerate word of mouth through structured rewards.

Most satisfied customers would refer a business if prompted but simply never think to do it unprompted. A referral incentive makes referring memorable and rewarding, converting passive satisfaction into active promotion.

A founder launches a referral programme where existing subscribers earn a month of free membership for every person they refer who subscribes. Within 60 days, 22% of her new subscribers have come from referrals, at a cost per acquisition of £12 versus £58 for paid channels.