Referral Marketing Platform

How Profitable Is A Referral Marketing Platform? (Updated for 2024)

Pat Walls

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Updated: September 4th, 2024

How Profitable Is A Referral Marketing Platform? (Updated for 2024)

So you want to start a referral marketing platform?

And the first question that came to your mind was, “well, are referral marketing platforms actually profitable?”

With a market size of $172B - there’s plenty of business to go around.

Especially considering:

You could start a referral marketing platform with as low as $400,000
Based on our data, referral marketing platforms generate an average of $3.29M per year

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a referral marketing platform.

Let’s dive in!

Is a referral marketing platform profitable?

Yes, a referral marketing platform is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.29M per year with an estimated gross margin of 93%, you could expect to recover your investment within 9 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your referral marketing platform.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your referral marketing platform is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a referral marketing platform worth it?

If you’re wondering if a referral marketing platform is worth it, the answer is a big YES. With referral marketing platforms, you have the potential to earn $3.29M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $172B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a referral marketing platform to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful referral marketing platforms case studies.

Examples Of Profitable Referral Marketing Platforms

Here are a few examples of profitable referral marketing platforms, and a few more details about them:

1. ReferralHero ($216K/year)

He was working for a startup in the event analytics space. A customer suggested a feature for attracting more attendees to events. The idea was to allow people to jump higher in the queue by inviting (or referring) more people to the event.

Several months later, remembered the idea and decided to build an MVP referral program as a widget instead of a web application.

Is it profitable? Yes
How much money it makes: $216K/year

How I Created A $18K/Month Referral Marketing Software

ReferralHero is a profitable, referral marketing platform with over 6,000 customers and MRR of around $18,000/month, built by founder Manuel Frigerio as an MVP in just four days, with growth coming from content marketing and SEO.

Read this case study

Read by 10,832 founders

2. GrowSurf ($1.2M/year)

Kevin Yun, co-founder of referral software company GrowSurf, came up with the idea for the business after realizing that there was a lack of suitable referral software available on the market. After years of waiting for someone else to build the ideal solution, Kevin and his co-founder decided to create it themselves, with the vision of making it as streamlined as possible to integrate a referral program into any product. Since launch, GrowSurf has achieved an impressive $25k MRR and is focused on increasing customer retention and reaching $1 million in annual recurring revenue.

Is it profitable? Yes
How much money it makes: $1.2M/year
How much did it cost to start: $0

How We Developed A $25K/Month Referral Software For Tech Startups

Co-founders of B2B SaaS startup GrowSurf, Derek and Kevin, developed a referral software for tech startups that has brought in around $25k MRR with a 6% monthly growth rate, overcoming generic messaging and a compromised product that wasn't a good fit for anyone.

Read this case study

Read by 7,792 founders

3. Spreadtheworld ($24K/year)

Xavier Coiffard, a developer turned solo entrepreneur, came up with the idea for his business, Spreadtheworld, after struggling to find online places to post his startup. He curated a list of 100 places and shared it on Reddit and IndieHackers, which gained significant traction. This led him to create a product, and from there, he launched several other successful ventures following a similar approach.

Is it profitable? Yes
How much money it makes: $24K/year
How much did it cost to start: $0

How I Created A $2K/Month Startup Marketing Database Using No-Code Tools

Learn how Xavier Coiffard generated $2000 per month in revenue by building 4 products in 4 months with no-code tools like Carrd, Airtable, Gumroad, and Zapier, as well as how he soft launched his products on Twitter and iterated on his launch strategy.

Read this case study

Read by 4,314 founders

Learn more about starting a referral marketing platform:

Where to start?

-> How much does it cost to start a referral marketing platform?
-> Pros and cons of a referral marketing platform

Need inspiration?

-> Other referral marketing platform success stories
-> Marketing ideas for a referral marketing platform

Other resources

-> Referral marketing platform tips

How much can you make with a referral marketing platform?

With a referral marketing platform, you can make an average of $3.29M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $400,000. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 9 months.

How much does a referral marketing platform make a week?

Based on our data, average weekly revenue for a referral marketing platform ranges around $68.5K. As such, you could see monthly revenues of $274K.

To know if your referral marketing platform achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your referral marketing platform.

How much do referral marketing platforms owners make?

The income of a referral marketing platform owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established referral marketing platform is about $68.5K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a referral marketing platform owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Referral Marketing Platform Profit Margins

Generally speaking, a referral marketing platform can expect profit margin of around 93%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a referral marketing platform, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, referral marketing platform owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, referral marketing platform owners can ensure long-term sustainability and profitability for their business.

Referral marketing platform owner salary

The salary of a referral marketing platform owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established referral marketing platform, in a prime position, might see an average weekly salary around the ballpark of $63.7K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a referral marketing platform may be a promising business to start - but the success of your referral marketing platform mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable referral marketing platform.

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Starting A Referral Marketing Platform: Everything You Need To Know

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