Build a referral tracking system

Building a referral tracking system involves designing a mechanism to track and attribute new users or customers to existing users who referred them. This system is widely used in marketing, affiliate programs, and user growth strategies. Below is a comprehensive guide on how to build a robust referral tracking system.

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Core Components of a Referral Tracking System

1. Referral Identification
   Every user should have a unique referral code or link that can be shared.

2. Tracking Referrals
   When a new user signs up or completes a conversion (purchase, subscription, etc.) through a referral link, the system must capture and associate this activity with the referrer.

3. Attribution Logic
   The system needs to assign credit correctly and prevent fraud or duplicate attributions.

4. Rewards or Incentives
   Based on referrals, the system should manage rewards for referrers and potentially for the referred users.

5. Reporting & Analytics
   Dashboards and reports to monitor referral performance.

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Step-by-Step Implementation

1. Design the Database Schema

Here is a simple schema outline:

• Users Table

  • user_id (Primary Key)

  • name

  • email

  • referral_code (Unique, auto-generated)

  • referred_by (Foreign Key to user_id, nullable)

• Referrals Table

  • referral_id (Primary Key)

  • referrer_id (Foreign Key to Users)

  • referred_user_id (Foreign Key to Users)

  • created_at

• Rewards Table (optional)

  • reward_id

  • user_id

  • reward_type

  • reward_value

  • status (e.g., pending, granted)

  • created_at

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2. Generate Unique Referral Codes

Assign each user a unique referral code upon registration. This code can be a short string or alphanumeric ID.

Example (Python):

python
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import random
import string

def generate_referral_code(length=8):
    return ''.join(random.choices(string.ascii_uppercase + string.digits, k=length))

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3. Create Referral URLs

The referral URL includes the referral code as a query parameter:

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https://example.com/signup?ref=REFERRALCODE

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4. Capture Referral Code on Signup

When a new user visits the signup page with a referral code:

• Extract the ref parameter.

• Check if the code exists and is valid.

• Store the referred_by field in the new user’s profile linking back to the referrer.

Example (simplified logic in Python):

python
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def signup_user(name, email, referral_code=None):
    referrer = None
    if referral_code:
        referrer = find_user_by_referral_code(referral_code)
    
    new_user = create_user(name, email, referrer_id=referrer.user_id if referrer else None)
    
    if referrer:
        create_referral_entry(referrer.user_id, new_user.user_id)
    
    return new_user

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5. Prevent Abuse and Double Counting

• One-time attribution: Only attribute the first signup or first purchase to a referral.

• Validate referral codes: Ensure referral codes cannot be forged or reused improperly.

• IP and device checks: Optional measures to avoid fraud.

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6. Reward System Integration

Define rules for giving rewards such as:

• Reward after referred user completes signup.

• Reward after referred user makes a purchase.

• Tiered rewards for multiple referrals.

Example:

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def process_rewards(referral_id):
    referral = get_referral(referral_id)
    if referral and meets_reward_conditions(referral.referred_user_id):
        grant_reward(referral.referrer_id, reward_type="credit", reward_value=10)

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7. Reporting and Analytics

Track:

• Number of referrals per user.

• Conversion rate of referred users.

• Rewards issued.

Build dashboards or export data for business intelligence.

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Technologies and Tools

• Backend: Node.js, Python (Django/Flask), Ruby on Rails, PHP, etc.

• Database: MySQL, PostgreSQL, MongoDB

• Frontend: JavaScript frameworks for displaying referral links and dashboards

• Tracking: Use cookies/local storage or session parameters to store referral info

• Security: Use HTTPS, validate inputs, and secure API endpoints

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Example Flow

1. User A signs up, gets referral code ABC123.

2. User A shares the URL: https://example.com/signup?ref=ABC123.

3. User B clicks the link, visits the signup page.

4. User B signs up; system notes referred_by = User A.

5. User A receives credit/reward once User B completes required action.

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This outlines the full process to create a reliable referral tracking system from the ground up. Let me know if you want sample code snippets or a specific tech stack implementation!