Users share your product but get nothing in return
Reward users progressively as they refer more people. The more they share, the better the rewards.
When to use
You have a referral program with low ongoing engagement.
Hypothesis template
If we create [tiered referral rewards] at [1/3/5/10] referrals, active referrers will increase by [target]% because progressive rewards maintain motivation.
Method
The problem: Your referral program gives the same $5 credit for every referral. After the first one, there's no motivation to keep sharing.
How to do it:
- Design 4-5 tiers with escalating rewards:
- 1 referral: extra AI tokens or small credit
- 3 referrals: free month of Pro
- 5 referrals: exclusive feature or early access
- 10 referrals: lifetime discount or special status
- Show progress: "You're 2 referrals away from [next reward]"
- Celebrate each tier unlock
- Make rewards genuinely valuable — not just discounts
- Show a leaderboard for competitive users
Key insight: Progressive rewards create a game loop. After earning the first reward, users are motivated by proximity to the next one: "I'm only 1 away from a free month!"
Success metrics
- •Referral program participation rate
- •Average referrals per participant
- •Tier completion distribution
- •Revenue from referred users
Prerequisites
- Referral tracking system
- Rewards worth earning at each tier
- Progress visualization UI
Common pitfalls
- •Making early tiers too hard to reach
- •Offering rewards users don't want
- •Not showing progress toward next tier
- •Changing rewards after users start working toward them
Source: Dropbox, Uber. Tiered referral rewards maintain motivation better than flat rewards.
Suggested ICE scores
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