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How to design a referral program at andrewchen

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Why a referral program? Referral programs — the “give $5, get $5” offers you see in many apps — have become popular in recent years. They have big advantages over paid marketing channels, in that you give your CAC to your users, who then spend it within your product, as opposed to handing it over to Google or Facebook. Because they are a form of viral marketing — utilizing your network of users to bring in more users — they tap in to your product’s network effects, as I describe in The Cold Start Problem. This is particularly useful for products that target high acquisition cost niches, whether that’s crypto users or on-demand drivers, whose CAC are often >$200, since the users often know each other. A successful referral program can be 20-30% of your acquisition mix, as one of several acquisition loops. It’s not a silver bullet, but it’s worth adding to complement other marketing efforts. The history of the referral program How did a structured form of customer referrals come into bei

How to design a referral program at andrewchen andrewchen --> Andrew Chen Archives Subscribe · Featured · Recent · The Cold Start Problem 📘 Dear readers, I have moved to Substack and I will be writing here from now on: 👉 andrewchen.substack.com In the meantime, I will leave andrewchen.com up for posterity. Enjoy! How to design a referral program 0 comments --> Above: Dropbox’s innovative growth initiative — A referral program to give/get storage Why a referral program? Referral programs — the “give $5, get $5” offers you see in many apps &#8

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