Customer referral programs offer many key benefits for marketers:
Scalable, High Margin Growth: By transforming your existing customers into brand advocates, you effectively gain a zero-cost salesforce.  This reduces your reliance on costlier acquisition channels, which leads to higher margin growth.
Acquisition of High Quality Customers:  Word-of-mouth marketing is how most businesses acquire their best customers.  Referred customers convert 5x faster, have a higher Average Order Value (AOV) and a higher Customer Lifetime Value (CLTV), as they tend to shop more, remain loyal and provide a higher profitability margin over time.
Operationalized Word-of-Mouth Marketing:  Referral programs operationalize word-of-mouth, allowing you to measure it, optimize it and get more of it (i.e. scale it).  Furthermore, referral programs help you extend your brand's reach into networks that might be missed by traditional advertising.
Reduced Customer Acquisition Cost (CAC): One major advantage of referral programs is the potential to reduce CAC, because every customer acquired through referral is brought by an existing customer (versus a paid channel).  Instead of relying on paid channels, you can utilize your existing customers to spread the word about your brand and reduce overall CAC.
Effective Return on Investment (ROI): Compared to paid channels, a referral marketing program yields significantly higher ROI, even after accounting for the costs of infrastructure and incentives.
Increased Customer Retention: Referral programs reinforce the loyalty of existing customers. When customers share your brand, they're more likely to continue shopping with you, increasing retention rates.
Data-Driven Marketing Insights: By tracking who makes referrals and who converts from them, referral programs generate valuable data that can be used to identify your most engaged customers and refine your marketing strategies for more targeted and effective campaigns.
In summary, a customer referral program is an efficient growth marketing strategy that drives customer acquisition, reduces CAC, increases retention, boosts profitability, and provides actionable customer insights.