Van den Bulte, Bayer, Skiera, Schmitt 2018 (JMR) — referred-customer LTV decomposes into "better matching" (temporary) + "social enrichment" (persistent)

Claim: Van den Bulte, Bayer, Skiera & Schmitt (2018), "How Customer Referral Programs Turn Social Capital into Economic Capital," decomposed the [[schmitt-skiera-van-den-bulte-2011-16pct-ltv-premium]] mechanism into two distinct parts:

• Better matching — referrers select prospects who fit the firm. Explains the temporary margin gap (matched prospects are higher-margin upfront, but the firm could have selected them with sufficient acquisition spend).
• Social enrichment — the referrer's ongoing relationship with the referred customer reduces churn. Explains the persistent retention gap. The referring relationship continues to constrain both sides; bailing on the engagement carries social cost.

Source: Van den Bulte, C., Bayer, E., Skiera, B., & Schmitt, P. (2018). "How Customer Referral Programs Turn Social Capital into Economic Capital." Journal of Marketing Research 55(1).

Confidence: Verified.

For Candid: The "social enrichment" channel is what makes strong-tie referrals so high-value over the engagement life. A referred client who got intro'd by a peer they still meet quarterly will absorb a frustrating month of Candid's work that an unreferred client would walk away from. The retention isn't just selection — it's active social pressure on both sides.

This is why [[expectation-setting-retention-by-tie-strength]] is load-bearing: the value of a referral is not just its conversion rate but its lifetime social-enrichment buffer.