Referral Rate Calculator

How to use this referral rate calculator

To calculate your referral rate, enter the number of referrals generated and the total number of new customers or employees during a specific time frame. The tool will instantly calculate your referral rate as a percentage of total new customers or employees.

Referral rate formula

Referral Rate = (Number of Referrals / Total New Customers or Employees) × 100

Understanding the referral rate result

Generally, a client referral rate of around 2-3% and an employee referral rate of around 30% is considered ideal. However, there can be significant variations in these figures depending on your industry.

• A high referral rate indicates that a larger proportion of your new customers or employees are coming through referrals, which is often a sign of a healthy referral program.
• A low referral rate suggests that significant improvements are needed in your product quality, work environment, referral programs, etc.

When to calculate referral rate

• After launching or promoting a referral program to track its impact

• Periodically, to measure ongoing program effectiveness

• After adjusting rewards or incentives in your referral program

How to calculate referral rate (with example)

Imagine that your business runs a customer referral program and records the following results over one month:

Number of Referrals: 100

Total New Customers: 500

Referral Rate = (Number of Referrals / Total New Customers) × 100

Referral Rate = (100 / 500) × 100 = 20%

In this example, 20% of the new customers came from referrals, indicating a moderately successful referral program.

How to improve your referral rate

• Offer compelling rewards that appeal to both referrers and their referrals.

• Make your referral program easy to share via social media, email, or messaging apps.

• Regularly promote the referral program in newsletters, on your website, and through customer communications.

• Incentivize top referrers with exclusive bonuses for bringing in the most referrals.

• Enhance customer or employee satisfaction to encourage more natural referrals.

• Track and analyze referral sources to focus your efforts on the most successful channels.