Design a referral feature for a consumer subscription app.
Model answer
Model answerReferral features fail when the incentive to refer is disconnected from the value of the product. The best referral mechanics make sharing feel natural, not transactional. I'd design a 'gift a trial' feature — existing users give friends a free month, no discount coupon codes. This feels generous, not spammy. Referred users convert better because they arrived with social proof. I'd measure viral coefficient: if it's above 0.3, the referral program is working.
Framework · AARRR Funnel
- AAcquisition
How many new users arrive via referral each week? Track as % of total - AActivation of referred users
Do referred users activate faster? Social proof should help - RRetention of referrers
Do users who refer others retain better? Usually yes — referral signals high satisfaction - RReferral rate
What % of active users refer at least one person per month? - RRevenue quality
Do referred users have higher LTV than other channels?
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