Skip to main content

Picking the Right Incentive


Picking the right incentive for your referral program is one of the largest contributors to the success of your program. Good incentives encourage existing users to share more often and entice those who receive referrals to convert at a higher rate.

But finding the right incentive can be hard. There are many incentives to choose from, so the first step is figuring out what kind of incentive you want to give. Prosper is unique and enables you to offer instant rewards, including discounts on products and orders which can benefit conversion rates and more.

Incentive Strategies

Below is a list of common incentives using Prosper:

% off productInstant20% off a T-shirts
% off orderInstant20% off next order
$ amount off a productInstant$10 off a T-shirt
$ amount off orderInstant$10 off next order
RaffleDeferredWin a $500 giftcard
Free productInstantGet a free hat with a qualifying purchase
Free ShippingInstantGet free shipping

Choosing the right strategy

Once you’ve decided what type of incentive you are giving, you need to figure out the size of it. To do this it’s important to take into account your average product price and your profit margin. Higher-priced products require larger discounts, but you want to make sure you’re still generating a positive margin or getting a comparable customer acquisition cost (CAC) to other marketing channels.

As a rule of thumb, we’ve found lower priced products do well with % off discounts, while higher priced products do well with $ off discounts. This has to do with how consumers perceive the discount, and how much they are actually paying.

For example, a $20 product might only be able to discount $4, but instead of saying “Get $4 off” you can say “Get 20% off”, which is more enticing to consumers. Similarly, a product costing $1000 might do better by offering “$100 off” than 10% off as consumers perceive the cash as better value.

Once you have created your first incentive, we suggest testing it and optimizing it over time to understand what your optimal incentive is.