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Overview
Customers → Referrers → Reach → Leads → Qualified Leads → Commercial value
Lots of customers, but very few Referrers
This usually means the first problem is participation. Your customers may not know the referral program exists, or they may not have a clear reason to join.
Things to review include:
- How prominently you promote the referral program
- Your referral emails
- Placement on your website, app or customer portal
- QR codes or other offline promotion
- Whether your reward gives customers a strong enough reason to participate
You have Referrers, but Reach is low
If people are joining your program but their Referral Links are not being viewed, the problem may be sharing.
Review:
Low Reach can indicate that people joined the program but are not actively making referrals.
- How easy it is for Referrers to find their Referral Link
- Your sharing options
- The message Referrers are encouraged to send
- Your reward
- Whether you remind existing Referrers to keep sharing
Reach is good, but very few people become Leads
Reach tells you people are viewing Referral Link Pages. If those page views are not turning into Leads, look at the referred-person experience.
Review:
A Referral Link Page view contributes to Reach. A Lead is only created when the referred person submits their details.
- The offer shown to the referred person
- Your Referral Link Page headline and messaging
- How much information you ask them to submit
- Whether the next step is clear
- Whether the recommendation and benefit feel relevant
You have plenty of Leads, but few become Qualified
At this stage, the issue is further down the funnel. Possible areas to investigate include:
Be careful with long sales cycles. A large number of Pending Leads does not automatically mean the program is performing badly if those Leads have not had enough time to convert.
- Lead quality
- Your sales or onboarding process
- The offer or product itself
- How long customers normally take to convert
- Whether your qualification rule accurately reflects a successful referral
- Whether a CRM or integration-based qualification workflow is configured correctly
Conversion looks good, but the program is expensive
A healthy conversion rate does not automatically mean the program is commercially successful. Compare referral performance with business measures such as:
Referral Factory reports referral activity and qualification, but these broader commercial measures may need to come from your CRM, payment platform or other business systems.
- Revenue from referred customers
- Customer value
- Customer lifetime value
- Reward cost
- Acquisition cost
- Margin
A small number of Referrers generate most of your results
This is not necessarily a problem. Use Power Users to identify the Referrers generating the most Leads and Qualified Leads. Look at what those Referrers have in common and how they are using your program. Their behaviour may help you understand what motivates your strongest advocates and where you could improve participation among the rest of your audience.
Look at the funnel, not one number
The most useful question is not simply “Is my referral program working?” Instead ask:
- Are enough customers becoming Referrers?
- Are Referrers actively sharing?
- Is Reach turning into Leads?
- Are Leads becoming Qualified?
- Are those Qualified referrals commercially valuable?