Referral Program
A system that rewards existing customers for referring new customers.
Definition
A referral program incentivizes existing customers to recommend your brand to friends and family — typically offering both the referrer and the new customer a discount or reward. Common Shopify referral apps include ReferralCandy and Friendbuy.
Why It Matters for Shopify Brands
Referred customers have 37% higher retention rates and 25% higher CLV than non-referred customers. Referral programs generate acquisition at a fraction of paid advertising cost.
Benchmarks
Average referral program conversion: 2–5% of customers make at least one referral. Referred customers have CAC of $5–$20 versus $30–$100+ for paid acquisition.
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