Refer a friend programs: are they worth it? Yes, as it happens they are and some very recent research gives us the numbers to back it up.
Referral Programs and Customer Value was recently published by Schmitt, Skiera and Van den Boulte. In this excellent paper, rigorous analysis was applied to a topic of discussion by marketers the world over: do ‘refer a friend’ programs make money?
Their findings: customers acquired through paid customer referral programs have a higher retention rate and higher initial contribution margin than other customers. In other words, yes they do work. [Read more…]