Referrals: Buying Trust at Wholesale

A meal-kit startup copies the classic playbook: "Give $25, get $25." Legal signs off, engineering ships it, marketing announces it.

Month one: 60 referred signups. The team celebrates. Then finance does the math — each referred customer cost $50 in rewards, and referred customers who came for the free box are churning after the first delivery. Meanwhile their paid ads bring customers in at $45.