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Referral Loop

A programmatic incentive that turns satisfied customers into a repeatable acquisition channel.

In depth

Best-in-class referral programs (Dropbox, Notion, Wise) reward both parties, are visible in-product, and produce customers with 20–40% higher LTV than paid-acquired ones. Referral is not virality; both can compound growth but the mechanics differ.

Related terms

Viral Coefficient
The number of new users each existing user brings in, on average. Sustained growth requires k > 1.
Activation Rate
% of new signups who complete the defined activation event within a defined window.
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