Referral Program Design and Funnel Leak Diagnosis
Design a referral or affiliate program with rewards sized to your margins, or find the funnel stage where an existing one leaks.
Before & after
Same prompt, same agent — the only difference is the skill.
Designing a referral program that resists abuse requires some thought. Here are strategies: - **Reward on a qualifying action**, not just signup (e.g., first purchase) - **Set limits** on rewards per user - **Verify referrals** to catch fake accounts - **Use double-sided incentives** to align both parties - **Monitor for fraud patterns** like self-referrals The core tension is making the incentive attractive enough to drive referrals while not being so generous that it invites gaming. Credit or account-based rewards tend to be less abusable than cash, since they keep value inside your product. What kind of product are you designing this for?
Abuse-resistance is a mechanics problem, and it's mostly decided by ONE
choice: when the reward fires. Get that right and most fraud vectors
close on their own.
THE CORE DECISION — reward trigger
On signup → maximum fraud. You're paying for account creation,
which costs a referrer nothing to fake.
On first payment → most fraud dies here. A fake referral now has to
put real money in, which defeats the point.
On 2nd payment / retention → near-zero fraud, some referral lag.
→ Recommend: gate on first successful payment. Best fraud-to-friction
ratio for most products.
REWARD TYPE — credit, not cash
Cash attracts people who want cash and will game for it. Account credit
keeps value inside the product and is worthless to a fraud ring — you've
removed the motive, not just added a check.
THE THREE CHECKS THAT CATCH THE REST
1. Self-referral block: same payment fingerprint OR same email domain
+ same device/IP between referrer and referee.
2. Velocity cap: N rewarded referrals per user per month. Above the
cap it's affiliate behavior — route it to a real affiliate program
with a contract, don't reward it silently.
3. Clawback window: reward reverses if the referred payment refunds
inside 30 days. Closes the "pay, collect, refund" loop.
DOUBLE-SIDED, INTENTIONALLY
Both sides get value — but the referrer's reward gates on the referee's
real action. This aligns incentives: the referrer is motivated to send
people who'll actually convert, not just click.
THE ABUSE YOU CAN'T FULLY DESIGN OUT
Genuine-looking low-quality referrals — real people, real payment, then
churn immediately. The retention-gated trigger and clawback are your
only defense; monitor referred-cohort churn separately and if it runs
hot, move the trigger later.
What's the product and price point? That sets whether "first payment" or
"retention" is the right trigger.About this skill
Your referral program gets shares but no customers. Or nobody shares at all. Or you are about to offer $100 per referral and are not sure the math holds. This skill sets the reward ceiling from your actual margins. It puts the ask at a real value moment and removes the friction that kills referred-friend conversion. When a program is underperforming, it finds the exact stage that leaks.
What it does
- Calculates a maximum reward per referred customer from gross-margin LTV, your target LTV:CAC, and how many referrals would have come anyway
- Picks the reward type and sidedness (credit, cash, discount, extended trial) for B2C, B2B, marketplace, or affiliate setups
- Places the ask at specific value moments in your product instead of at signup
- Breaks an existing program into stages (shown, shared, clicked, signed up, qualified, paid) and finds the leak by comparing each stage to your organic baseline
- Adds fraud controls (qualifying events, payout delays, caps) and flags disclosure and policy issues
- Separates referral programs from affiliate programs, which need commission terms, attribution windows, and partner rules
What you get
A program brief covering economics, mechanics, trigger moments, copy, and instrumentation. For an existing program, you get a stage-by-stage diagnosis with the one or two fixes most likely to move qualified referrals, plus how to test them.
Best for
Founders, growth marketers, and product managers at SaaS, subscription, consumer app, and e-commerce companies. It fits anyone launching a referral or affiliate program or trying to rescue one that is underperforming.
SKILL.md preview
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name: referral-program-design-and-funnel-leak-diagnosis
description: Designs referral and affiliate programs with rewards capped by a unit-economics ceiling, asks placed at real value moments, and low-friction share and redeem flows. Also diagnoses existing programs stage by stage against the company's own organic baselines. Use when the user says "design a referral program for us", "how much should we pay per referral", "our referral program gets shares but no signups", "nobody uses our refer-a-friend", "should we do an affiliate program", "double-sided or single-sided reward?", "my referral program is getting gamed", or "how do we turn word of mouth into a loop".
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