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K-factor. Real referral math.
Viral coefficient, compound growth over N cycles, reward cost vs LTV — and a payback verdict.
Inputs
Results
K-factor
0.45
viral coefficient
Users after cycles
1,811
6 cycles
Reward spend
$32,456
2-sided × referred
ROI
1,025%
(ltv − rewards) / rewards
Benchmark
Solid amplifier
K = 0.45 — meaningful boost on top of paid growth.
How it works.
Even K = 0.3 is meaningful — it adds 40%+ to your user base over 6 cycles, on top of paid acquisition. Don't chase K = 1; chase positive ROI.
FAQ.
What is the viral coefficient (K-factor)?+
K = invitations per user × invitation conversion rate. K > 1 means viral growth. Most B2B referral programs land between 0.1 and 0.4 — useful, not viral.
What's a good referral conversion rate?+
10-25% of received invites convert to signup in B2B SaaS. Below 10% the offer or messaging needs work; above 25% usually means a strong relationship or category match.
Cash, credit or upgrade as referral reward?+
Account credit usually outperforms cash and tier upgrades for B2B SaaS — recipients spend it on the product, reinforcing loyalty. Cash wins for consumer apps.
Should both sides get a reward?+
Yes. Two-sided rewards lift conversion 30-50% vs one-sided. Dropbox's classic 'give space, get space' worked because it removed the awkwardness of asking.
When should I launch a referral program?+
Once retention is solid (90-day retention >50%) and NPS is positive. Launching too early just sends new users to a product they're already churning from.