Result
ROI
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
ROI = (revenue from referred customers − rewards paid) ÷ rewards paid × 100%. The standard ROI formula applied to a referral program: rewards here are the acquisition cost of those customers.
Customers who come through referrals are often cheaper to acquire and more loyal on average than paid-ad customers — the referral comes from someone already familiar with the product, which pre-filters for a better-fit audience.
The reward can go to the referrer, the referred person (a discount on the first purchase), or both — the calculation should include every payout the program makes, not just one side, otherwise ROI comes out overstated.