Almost all sites have a user referral program, i.e. current users can invite new users to try a given product. Typically, after the new user completes a transaction, the referrer gets rewarded with a certain amount of money or credit to be used on the site.
The goal of this challenge is to analyze data from a referral program and draw conclusions about its effectiveness.
Company XYZ has started a new referral program on Oct, 31. Each user who refers a new user will get 10$ in credit when the new user buys something.
The program has been running for almost a month and the Growth Product Manager wants to know if it's been successful. She is very excited cause, since the referral program started, the company saw a spike in number of users and wants you to be able to give her some data she can show to her boss.
Can you estimate the impact the program had on the site?
Based on the data, what would you suggest to do as a next step?
The referral program wasn't really tested in a rigorous way. It simply started on a given day for all users and you are drawing conclusions by looking at the data before and after the test started. What kinds of risks this approach presents? Can you think of a better way to test the referral program and measure its impact?
We have just 1 table downloadable by clicking here.
The table is:
referral - provides information about each transaction that happens on the site and whether the user came from the referral program or not.
Let's check one purchase event
head (referral, 1)
|user_id||2||this is the user id|
|date||2015-10-03||she bought something on Oct, 3|
|country||FR||she is in France|
|money_spent||65||her purchase cost 65$|
|is_referral||0||she didn't come via the referral program|
|device_id||EVDCJTZMVMJDG||she used a device identified by this id to make the purchase|
Let's now also check one purchase event from a user who came via the referral program
|user_id||5016||this is the user|
|date||2015-10-31||she bought on Oct, 31|
|country||DE||she is in German|
|money_spent||45||her purchase cost 45$|
|is_referral||1||she joined the site via another user referral|
|device_id||OGAZARJAGCPUQ||this is the device she used to complete the purchase|