Referral Program
Also called Referral Loop
A system that rewards existing users for bringing in new ones, discounts, credits, perks, turning happy customers into an acquisition channel. Dropbox's free-space referral is the classic.
Why it matters
Referrals convert better and cost less than most channels because they come with built-in trust. A well-designed program can create a growth loop, though it only works when people already love the product.
For example
PayPal paid new users and their referrers real cash to sign up, buying viral growth that would have cost far more through ads.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Growing and marketing, part of the Starting Up hub.
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