How to Create a Referral Program

Referrals are often your cheapest and highest-quality customers. Here's how to build a referral program that actually works.

Incentive

**Both give and get** — Referrer and referee both benefit. "Give $20, get $20." Mutual incentive.

**Discount, credit, or cash** — Match your model. SaaS: free month. E-commerce: credit. Services: discount.

Structure

**"Give $20, get $20"** — Simple. Easy to explain. One tier.

**"Refer 3, get free month"** — Tiered if it fits. But start simple. Add complexity later.

Keep It Simple

**One click to share** — Pre-filled message. Unique link. No friction.

**Easy to track** — Unique links. Attribution. Know who referred whom. Measure conversion.

Promote

**In-app** — After key actions. "Love us? Refer a friend."

**Email** — Post-purchase. Post-success. "Share with a colleague?"

**Post-purchase** — When they're happiest. Strike while the iron is hot.

Start Small

**Test with 10–20 customers** — Before rolling out. Does anyone use it? What's the conversion?

**Measure before scaling** — Cost per referral vs. CAC. Quality of referred customers. Scale if it works.

**Next Steps**: Use [Luxara](/app) to understand your unit economics. Referral incentives must fit your margins.

Turn this guide into an execution plan

Use Luxara to compare directions, estimate costs, and export a practical roadmap.