We are setting up a referral program for We will incentivize customers to share our site with others. Our jewelry will sell for $100 - $1,000, mostly ~ $250. We've been thinking about giving $1 for every signup customers bring but are scared of possible fraud and overall unsure whether this is an appealing proposition. We've settled on $50 for every friend who comes and purchases. I am super aware that we won't know the answer until we test, but still, what's your take on that? Is $50 too much? Do you have other suggestions or can you point us to a very successful referral program in a relevant industry?

At the end of the day it comes down to what metric matters most in your business. I don't have enough info about your business model and products to give definitive advice but you should only pay a referral commission for referrals that move your business forward. You are on the right track by only paying comissions for people who are referred, sign up AND make a purchase, rather than just sign up.

Facebook is an example we can all relate to. Zuckerberg has always only reported ACTIVE users, not registered users because ACTIVE users are what make Facebook valuable.

Whatever it is that will make your company more valuable whether it's users, usage, revenue, profit, volume of sales, frequency of sales, etc. is what you should incentivize.

Hope this helps, let me know if you need any clarification. Here to help!


Answered 6 years ago

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