👉 Referrals math involves calculating the total potential impact of a referral program by considering the number of referrals, the conversion rate from referrals to customers, and the average customer value. Essentially, it's a formula that helps businesses estimate how many new customers they can expect to gain from each referred individual, multiplied by the likelihood that these new customers will make a purchase. The formula is typically expressed as: \( \text{Total Referrals} \times \text{Conversion Rate} \times \text{Average Order Value} \). For example, if a business has 100 referrals with a 10% conversion rate and an average order value of $100, the math would be \( 100 \times 0.10 \times 100 = 1,000 \) potential new customers. This helps in planning and optimizing referral strategies to maximize ROI.
