What would a referral program earn you?

How do you calculate referral program ROI?

Divide the gross margin from referred customers by everything the program cost — both sides' rewards, plus the platform fee — over the same period. The calculator above runs that math from your audience size, order value and reward amounts, and shows it per year so early costs aren't judged against late revenue.

The mistake that flatters almost every back-of-napkin version: counting only the referrer's reward as cost. In a double-sided program the friend's discount is an acquisition cost too, and leaving it out roughly halves your apparent spend.

Which inputs move the result most?

Participation and conversion, not reward size. Doubling a reward rarely doubles referrals, but moving participation from 2% to 4% doubles everything downstream. If the calculator's output disappoints, work the share-rate assumptions before reaching for a bigger reward — the reward calculator below prices what you can afford.

What is a good referral program ROI?

Compare it against your other channels' returns rather than a published benchmark — the definitions behind public ROI figures vary too much to borrow. A more decision-ready number is payback: how many months of a referred customer's margin repay their acquisition cost, next to the same figure for paid.

What ROI means, how it differs from payback, and the traps in measuring it are covered properly on the referral program ROI reference page linked below — this page just does the arithmetic.