A referral program is the structured marketing mechanism that incentivizes existing customers to refer new customers. Incentives typically include cash payouts, account credit, product upgrades, free months of service, or two-sided rewards (both referrer and referred get the benefit), with the goal of acquiring new users at lower CAC and higher LTV than paid acquisition channels deliver. It is the explicit, incentive-driven cousin of in-product virality and one of the most studied growth mechanics in startup history.
The canonical case studies show what works and what each one optimized for. Dropbox (2008) offered 500MB of free storage to both the referrer and the referred friend, taking signups from 100,000 to 4 million in...