The percentage of customers who actively refer others to a product or service. It measures the real-world support of existing users, reflecting their willingness to promote the brand through word-of-mouth. **Why It Matters** A high CRR indicates strong customer satisfaction and engagement. Unlike [[Net Promoter Score (NPS)]], which reassures hypothetical willingness to recommend, CRR tracks actual referrals, making it a more actionable metric for growth. A strong referral rate can significantly reduce customer acquisition costs and enhance **organic growth**. > [!formula] > $CRR = \left( \frac{\text{Number of customers who refer}}{\text{Total number of customers}} \right)$ **Factors Influencing CRR** - **Product Resonance**: If customers don’t strongly connect with the product, they are unlikely to recommend it. - **Net Promoter Score (NPS)**: While a high NPS (9-10) suggests potential for referrals, only a fraction of these promoters take action. - **Referral Incentives**: Programs that offer tangible benefits (discounts, credits, exclusive access) tend to drive higher referral rates. - **Friction in Referral Process**: Complex or inconvenient referral systems can discourage participation, even among satisfied users. **Challenges in Improving CRR** - Measuring and attributing referrals accurately - Encouraging users to move from passive satisfaction (NPS) to active advocacy (CRR) - Designing a referral program that balances incentives with profitability