What's the cost difference between referral and paid acquisition?

Referral is one of the most cost-efficient ways to acquire customers, because your existing customers do the selling instead of your ad budget.

• Roughly 5x cheaper: Acquiring a customer through referral costs about a fifth of paid advertising, per Invesp.
• Lower CAC: When customers make the introduction, cost per acquisition drops sharply.
• Higher LTV: Referred customers also tend to be worth more over their lifetime.

That combination of lower cost and higher value makes referral the most efficient growth channel for many businesses.