Understanding Attribution & Incrementality in Referral Marketing

At Mention Me, we’re often asked:
“Are the referrals that you deliver truly incremental?”
The short answer is yes—but it’s difficult to measure precisely. And beyond driving new customer acquisitions, referrals bring long-term value to your business as well.
The Challenge of Measuring Incrementality
In referral marketing, measuring incrementality means determining whether the customers you acquire through your referral programme represent true growth. Essentially, we ask: Would this customer have made a purchase without the referral?
In an ideal scenario, every customer gained through your referral programme would represent new business that wouldn’t have been captured through other marketing efforts. However, identifying true incrementality is challenging due to the mix of marketing activities that contribute to a customer’s journey.
Naturally, you might wonder: "How do I know that these customers are here because of Mention Me? How can I be sure I’m not paying for customers who might have been influenced by other channels like Meta or Google?"
This concern is valid—especially in today’s complex, multi-touch customer journeys. Research (123) shows that most customers interact with multiple touchpoints before making a purchase. They might see an ad, hear a recommendation from a friend, browse your website, and then finally purchase after a promotional offer.
This raises a key question: Which touchpoint deserves credit for the sale?
Attribution Models and Referral Tracking
Traditional attribution models often assign credit to the last interaction before purchase, but this can overlook the impact of earlier interactions. Fortunately, Mention Me’s referral platform is uniquely designed to track referrals using customer email addresses, enabling us to monitor the influence of referrals over a longer period.
This allows you to capture the full value of referral efforts, even when a customer is influenced by multiple channels before making a final purchase.
The Monzo Example
Monzo, a digital banking platform, ran a successful test to measure the incrementality of their referral programme (4). Although they haven’t publicly shared the results, they continue to invest in prompted referrals, highlighting the value they see in this channel.
Designing a test to isolate the incrementality of referrals is difficult—it requires comparing customer segments where referrals are promoted and not promoted while ensuring these segments don’t overlap in their communications.
If you're interested in running similar tests, our Data Science team is ready to help you design and implement one with your customer base.
(1) Schmitt, P., Skiera, B., & Van den Bulte, C. (2011). Referral Programs and Customer Value.
Journal of Marketing Research, 48(1), 94-108. Link
(2) Godes, D., & Mayzlin, D. (2009). Firm-Created Word-of-Mouth Communication: Evidence from a Field Test. Marketing Science, 28(4), 721-739. Link
(3) Ryu, G., & Feick, L. (2007). A Penny for Your Thoughts: Referral Reward Programs and Referral Likelihood. Journal of Marketing, 71(1), 84-94. Link
(4) Chris Doughty, Designing a regional experiment to measure incrementality, Monzo.com
The Real Value of Referral Programs
Even though it’s hard to measure exact incrementality, the broader benefits of referrals are clear. Research and our own data show that referred customers are consistently:
- Cheaper to acquire, with a lower CPA than other paid acquisition channels.
- Higher in immediate value, spending 10-25% more on their first purchase.
- Better long-term customers, with up to double the customer lifetime value (CLTV).
- More likely to refer others, perpetuating a virtuous cycle of growth.
This value stems from three factors:
- Pre-selection by referrers: existing customers tend to refer friends who they believe will benefit from the product or service, acting as a filter for high-quality prospects.
- Trust transfer: the trust between the referrer and the referee transfers to the brand, resulting in faster adoption and higher engagement.
- Higher satisfaction: referred customers often have more accurate expectations, which leads to greater satisfaction and lower churn rates.
Increasing Natural Word-of-Mouth
It’s important to remember that many brands benefit from organic word-of-mouth recommendations. When satisfied customers share their experiences with friends, it can lead to new business.
However, by introducing a referral programme with prompts and incentives, you amplify this natural behaviour, ensuring you capture more of these valuable interactions.
Mention Me tracks which customers are your most active referrers, giving you insights to refine your acquisition and retention strategies, targeting the highest-quality customers more effectively.
Through organic word-of-mouth alone, this feedback loop is simply impossible to achieve.
Moving Forward with Confidence
While attribution and incrementality can be complex to measure, the benefits of a well-executed referral programme are undeniable. With Mention Me, you’re not just acquiring new customers—you’re building a community of loyal brand advocates who will drive sustainable growth for years to come.
If you have any questions or want to explore how to maximise your referral programme, our team is here to help. Let’s continue working together to achieve the best outcomes for your brand.

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