Users don't share your product because there's no incentive
Both sides need to win. The referrer gets a reward, and the person they invite gets a bonus too.
When to use
You have a referral program with low conversion on the referee side.
Hypothesis template
If we give both referrer ([reward]) and referee ([bonus]), referral rate will increase by [target]% because both sides are motivated.
Method
The problem: Your referral program only rewards the referrer. The person being referred has no extra incentive to sign up through the link.
How to do it:
- Design a two-sided reward:
- Referrer: extra AI tokens, free month, or credit
- Referee: extended trial, bonus tokens, or discount on first month
- Make both rewards visible: "Give 20 tokens, get 20 tokens"
- Show the referrer what their friend will get
- Trigger the reward immediately upon signup (not after 30 days)
- Track: referral link shares, signup rate from referral links, reward redemption
Key insight: Two-sided rewards increase referral conversion by 25-50% over one-sided. The referee signs up because they're getting a deal, not just doing their friend a favor.
Success metrics
- •Referral link share rate
- •Referred signup rate
- •Reward redemption rate
- •Referred user retention vs organic
Prerequisites
- A referral tracking system
- Rewards for both sides
- Clear communication of both rewards
Common pitfalls
- •Making one side's reward much better than the other
- •Delaying reward delivery
- •Not showing the referee what they get
- •Making rewards too small to motivate action
Source: Dropbox, Uber, Airbnb. Two-sided referral incentives increase conversion 25-50% over one-sided.
Suggested ICE scores
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