Product metrics. Part 7- referral metrics


Referral Metrics

1. Net Promoter Score (NPS)

Definition: Measures customer loyalty by asking how likely users are to recommend your product.
Formula:
NPS = % Promoters (score 9–10) – % Detractors (score 0–6)

Examples:

  • SaaS CRM: 60% Promoters, 15% Detractors →
    NPS = 60 - 15 = 45
  • Health Insurance Platform: 45% Promoters, 25% Detractors → NPS = 20.
  • Language Learning App: 70% Promoters, 10% Detractors → NPS = 60.

2. Referral Rate

Definition: % of new customers acquired via referrals.
Formula:
Referral Rate = (Customers via Referral / Total New Customers) × 100

Examples:

  • Fintech App: 400 out of 2,000 new users via referrals →
    = (400 / 2000) × 100 = 20%
  • D2C Skincare: 300 referred out of 1,200 signups → 25%.
  • Online Fitness Program: 100 of 500 signups came from referrals → 20%.

3. Virality Coefficient

Definition: Avg. number of new users each existing user brings in.
Formula:
Virality Coefficient = Avg. Invitations Sent × Conversion Rate of Invitees

Examples:

  • Messaging App: Avg. 4 invites/user × 30% convert →
    = 4 × 0.3 = 1.2 (virality)
  • Gaming App: 2 invites/user × 25% convert → 0.5.
  • Finance Tool: 3 invites × 40% conversion = 1.2.

If >1, user base can grow exponentially.

4. Invite Conversion Rate

Definition: % of invited users who sign up.
Formula:
Invite Conversion Rate = (Converted Invites / Total Invites Sent) × 100

Examples:

  • Learning App: 800 out of 2,000 invited users joined →
    = 40%
  • Digital Wallet: 600 joined from 3,000 invites → 20%.
  • Health Tracker App: 500 conversions from 1,000 → 50%.

5. Share Rate / Social Shares per User

Definition: % of users who share product content or refer.
Formula:
Share Rate = (Users Who Shared / Total Users) × 100

Examples:

  • Music App: 2,000 users out of 10,000 shared playlists →
    = 20%
  • Recipe Platform: 1,200 users shared weekly tips → 30%.
  • Fitness App: 1,000 of 5,000 shared progress screenshots → 20%.

6. Referral Conversion Rate

Definition: % of referred users who become paying customers.
Formula:
Referral Conversion = (Paying Referred Users / Total Referred Users) × 100

Examples:

  • Streaming App: 1,000 referred, 400 paid →
    = 40%
  • Online Learning: 300 of 900 referrals paid → 33%.
  • Insurance Broker: 250 from 500 referrals closed → 50%.


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