Definition
The percentage of active customers who refer at least one new customer within a period.
Formula
Customers who made a referral / Total active customers x 100
How to measure
Track referral link or code usage tied to each existing customer and divide the count of referrers by the total active customer base.
Why track it
Referral rate shows how much of acquisition can rely on existing customer advocacy rather than paid channels.
Example
A company finds 8% of its active customers refer at least one new signup each month.
FAQ
- What is Referral Rate?
- The percentage of active customers who refer at least one new customer within a period.
- How do you calculate Referral Rate?
- Customers who made a referral / Total active customers x 100
- Why track Referral Rate?
- Referral rate shows how much of acquisition can rely on existing customer advocacy rather than paid channels.