git:20260828.f80dcb5 to git:20260901.aa45383

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name: referral-programs

description: Designs and improves referral, affiliate, and word-of-mouth programs — incentive structure, mechanics, timing, and fraud control. Use this to build a referral or affiliate program, diagnose one that is not producing, decide what incentive to offer, or judge whether referral is a realistic channel for a product.

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# Referral programs

## Qualify the channel first

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

If customers are not already recommending you unprompted, a program will not produce them — it will

produce incentive-motivated signups that churn. Check first: is anyone referring today, and what do

they say when they do?

## Incentive design

- **Two-sided beats one-sided** in most cases. It gives the referrer something to offer rather than

something to gain, which removes the awkwardness that stops most referrals.

- **Match the reward to the product's value**, not to a round number. Account credit usually

outperforms cash, and costs less.

- **Reward the outcome you want.** Paying on signup buys signups; paying on a retained, activated

customer buys customers.

- **Cash rewards attract fraud**, and fraud scales faster than the program does. Budget for

detection before launch, not after.

## Mechanics

The referral has to be effortless at the moment of enthusiasm, which means the ask must appear right

after a success moment — not in a settings page nobody visits.

- One-click share with pre-written text the referrer can edit.

- A link that works everywhere and survives being pasted into any app.

- Visible status: who was invited, what stage they reached, what has been earned. Ambiguity kills

repeat referrals.

- The referred person's experience must be better than a normal signup. Landing them on the generic

homepage wastes the introduction.

## Fraud control

Self-referral, disposable accounts, and coordinated rings. Minimum viable controls: reward only on a

qualifying event well past signup, hold a payout window, deduplicate on payment method and device,

and cap per-referrer volume pending review.

## Affiliates are a different program

Affiliates are a paid channel with commercial terms, not enthusiastic customers. They need

attribution rules, cookie windows, prohibited-methods terms — brand bidding and coupon-site

behavior in particular — and monitoring. Run without terms and you will pay commission on customers

you already had.

## Measuring

Track referred-customer retention against baseline. If referred customers retain worse, the

incentive is buying the wrong behavior and the program is losing money while appearing to work.