---
name: referral-loop-design
description: "Activate when: a founder wants customers to bring customers; 'how do we get referrals / word of mouth', designing a referral program, improving virality; loops, incentives, timing. Do NOT activate when: the product has weak retention/love (fix that first — referrals amplify a leaky bucket)."
---

# Referral Loop Design — Turn Customers into a Channel

## Overview
A referral loop is a **repeatable cycle where using the product produces new users**: a happy customer is prompted, at the right moment, with the right incentive and an easy share, and the new user enters the same loop. Loops compound; one-off "refer a friend" banners don't. Referrals only work on a product people already value — they amplify love, they don't create it.

## The Process
1. **Verify the precondition** — strong retention/NPS. *Gate: referring a product people don't love just spreads churn — fix retention first.*
2. **Pick the trigger moment** — right after a value peak (a win, a result, an "aha"), not at signup. (Pairs with peak-end thinking.)
3. **Choose the incentive type** — double-sided (giver + receiver), status, or pure delight — matched to the audience's motivation.
4. **Remove friction** — one-tap share, pre-written message, obvious reward. *Gate: any extra step halves participation.*
5. **Close the loop** — the referred user lands in an experience that gets them to their own value fast, then hits the same trigger.
6. **Instrument K-factor** — invites sent × conversion; iterate the weakest step. *Gate: K without measuring each step = you can't tell what to fix.*

## When to Use
- Loved product with weak organic spread
- Designing/relaunching a referral program
- Cheap growth for low-budget SMBs/creators

## Applying It Well
- Timing (post-value) matters more than reward size.
- Double-sided incentives usually beat one-sided.
- Referred users often retain better — treat their onboarding as sacred.

## Red Flags
- Bolting referrals onto a leaky-retention product.
- Asking at signup, before any value.
- Multi-step share flows that kill participation.

## Verification
- [ ] Retention/NPS precondition met
- [ ] Trigger fires at a value peak
- [ ] Incentive matched to audience; share is one-tap
- [ ] Each loop step instrumented and iterated

---
*Part of **deciqAI Knowledge Skills** — 225 open-source thinking skills that make rigor executable for AI agents. The same skills power every deciqAI agent, which runs them autonomously to operate your company. **See it run → https://www.deciqai.com/s/referral-loop-design** · Built by deciqAI · github.com/deciqAI · Contributions welcome.*