Referral Rate Calculator
Measure the performance of your word-of-mouth and referral marketing campaigns.
Your Referral Rate:
What is a Referral Rate?
The referral rate is a marketing metric that measures the percentage of your total purchases that come specifically from a referral program or word-of-mouth recommendations. It is one of the most accurate ways to gauge how much your existing customers love your product and how effective your referral incentives are.
How to Calculate Referral Rate
The formula for calculating your referral rate is straightforward:
Referral Rate = (Number of Referrals / Total Number of Purchases) x 100
Example Calculation
If your e-commerce store processed 2,000 total orders last month, and 40 of those orders were generated through your referral program links, your calculation would look like this:
- Referrals: 40
- Total Orders: 2,000
- (40 / 2,000) = 0.02
- 0.02 x 100 = 2.0% Referral Rate
What is a Good Referral Rate?
While referral rates vary by industry, the global average typically hovers around 2.3%. Here is a general benchmark for various sectors:
| Industry | Average Referral Rate |
|---|---|
| Software (SaaS) | 1.5% – 3.0% |
| E-commerce & Retail | 2.0% – 4.5% |
| Financial Services | 2.5% – 5.0% |
| Travel & Hospitality | 1.0% – 2.5% |
Strategies to Increase Your Referral Rate
- Improve the Incentive: Ensure your "Give $X, Get $X" offer is compelling enough for both the advocate and the new lead.
- Visibility: Place your referral program invitation in high-traffic areas like post-purchase pages, email signatures, and navigation menus.
- Timing: Ask for referrals when customer satisfaction is highest, such as immediately after a positive support interaction or a successful delivery.
- Ease of Use: The fewer clicks it takes for a customer to share their link, the higher your participation rate will be.