Most of the articles provided in the strategy document focused on the importance of SaaS referral programs, some articles listed the best referral programs in SaaS space, which included referral programs from Google, Dropbox, PayPal, Evernote, Uber, Amazon Prime, and several others.
Building Customer Referral Programs at SaaS/Tech Companies
“How To Build A SaaS Referral Program”
- Written by Chris Onyett, director of marketing at Roketto, this article details the process of developing a SaaS referral program and the benefits associated with the same. One of the core benefits of having a SaaS referral program is that it minimizes the Cost Per Acquisition (CPA). Acquiring customers through referrals is way better than those expensive marketing campaigns because, in the referral process, companies do not incur any variable costs or additional expenses.
- According to industry statistics, referral marketing is three to five times more successful in converting potential leads than any other marketing channel. The article states that referral marketing is more successful because it has more social appeal than other forms of marketing.
- “As per Deloitte, referred customers have a 37% higher retention rate.” Additionally, referred customers also have a better customer lifetime value (CLV); according to a study conducted by the “Wharton School of Business, the CLV of a referred customer is 16% higher than non-referred customers.”
- The first step towards building a successful SaaS referral program is to ensure that the customers love the SaaS product and would be willing to refer it to a friend. For ensuring this, companies need to measure customer satisfaction levels, and they also need to keep a check on negative feedback from the customers for further improvement.
- Once the company is sure enough that their customers are happy with the SaaS product, they can move on to the next phase, deciding the perfect incentive. Incentives are important because referring is an extra task, and customers wouldn’t do anything extra unless there is an incentive attached to the task. Some examples of popular incentive programs include fee waivers, discounts, plan upgrades, and cash credits.
- The next step on the list is choosing a referral tool, and the article suggests automated tools like Growsurf, ReferralHero, Viral Loops for streamlining the overall referral process.
- After this, companies need to focus on the terms and conditions associated with the referral program. Companies need to clarify everything about the program, for instance, what type of referral program it is, what kind of incentives it offers, are the incentives available upon every referral, or only after the successful referrals.
- According to the article, timing is critical, when it comes to asking a customer for a referral; companies need to decide the perfect time for asking their customers to refer the product to their friends. The ideal time for requesting a customer for a referral could be when a customer completed a year or two with the company or after the customer has created some successful campaigns or assets with the product or after they have given positive feedback or a testimonial about the product.
- Companies need to use a mix of email and social media marketing for promoting their SaaS referral programs; they also need to use creative marketing strategies, such as automated messages on the website, in-app messaging, bringing up the referral program every time a critical user issue is resolved.
- Tracking and measuring results is the most important part of building a successful SaaS referral program. Focusing on the most important and relevant metrics and figuring out an approach to track them are two important steps that companies need to take in the tracking phase. “Popular metrics related to referrals include the percentage of customers who become referrers, the total number of referrals made, the number of referrals made by every customer, click-through rate (for referrals sent), and conversions (number of customers who sign up via referral).”
“How to Develop the Right Loyalty or Referral Program”
- The article offers insights about the best SaaS loyalty and referral programs, which include Amazon Prime, Dropbox, Trello, Evernote, Twitch, PayPal, and TransferWise. It also suggests that companies need to evaluate their current referral data before building referral programs.
- Amazon Prime is one of the best loyalty programs because it ensures that the customer is getting all sorts of amazing perks at the price of $99 a year; thus, the customer is motivated enough to buy more from Amazon.
- Dropbox’s referral program is one of the most popular programs in the SaaS space. Before implementing the program, Dropbox was primarily dependent upon SEM and affiliate marketing for generating clients, and these strategies incurred CPA of $288-$388. However, after they installed their referral program, nearly 35% of their daily sign-ups were from the referral program. Their referral program offered incentives in the form of free storage space, and the incentive was available for both the referrers and their friends. According to the article, Dropbox’s referral incentive is the best because free storage space was key to the usage and enjoyment of their product.
- Another example of a company offering the perfect referral incentive is Trello. It offers a free upgrade to a month of premium services on every successful referral.
- Evernote’s referral program is inspirational for companies that already have a large user base for their basic or free services and are currently focusing on generating clients for their premium segment. Evernote has a points-based incentive system; customers are awarded 5 points every time a customer referred by them buys premium services for the first time.
- Twitch’s loyalty program is focused on increasing user engagement on the website, and it rewards the customers with customized loyalty badges. PayPal’s referral scheme offered cash bonuses to customers; “for every successful merchant referral, customers would earn a portion of the merchant’s revenue generated in the first six months.”
- Another example of a company offering cash incentives for successful referrals is TransferWise, a money transfer service headquartered in the United Kingdom.
“How To Grow Your Userbase With Customer Referrals”
- The article lists six approaches that should be considered for a successful SaaS referral program. It suggests that opting for a two-sided referral program would be more efficient and effective; these programs offer incentives to both the referrer and the referee. Additionally, the article suggests that customers should get an incentive to refer the product to a friend, regardless of whether it earns a successful sign-up or not.
- Companies need to find the perfect time for asking to be referred. Service-based products are tricky, and hence they require more time for the client to experience everything about the product, and so, companies should avoid being pushy about referrals, especially if the customers are new to the product.
- A referral program would need happy customers, and for that, companies need to focus on getting their service delivery game right. Improving the overall experience of customers will ensure positive reviews from the customers.
- A complicated and time-consuming referral process would lead to lower client referrals; companies need to figure out how to make the overall referral process easy and rewarding.
- To attract more customers, companies need to respond to customer reviews online. They need to address any negative feedback and resolve potential issues and acknowledge positive feedback from the customers.
- Networking events are an important part of the overall promotion strategy, and they also help in engaging with existing clients and potential customers. Companies should invest more often in such events to grow their customer base.
Successful Customer Referral Programs at SaaS/Tech Companies
“9 Stellar Referral Program Examples”
- The Influitive article provides nine examples of exceptional referral programs. Programs from companies like Google and Uber have made it to the list.
- Google’s referral program is easy and rewarding. Google provides the members of its referral program a customized referral link, and it gives $15 to the referring client each time a new Google Apps for Work account is activated using their personalized link. Dropbox offers product-based perks to its clients instead of monetary bonuses; it offers free storage space to referrers and referees as a part of its referral scheme. According to the article, product-based incentives make customers more engaged and invested in the product.
- Uber also offers a dual-sided referral program, where customers get a personalized referral code. Each time a new account is activated using the personalized code, both the referred client and the referring customer get a free Uber ride.
- ReadyTalk is a web conferencing service provider, and its advocate marketing program is one of the best examples of how a company should strengthen its relationship with its customers. ReadyTalk’s program rewarded customers each time they advocated its product online, such as a social media post or an online review. “In the first ten weeks of implementing their advocate marketing program, ReadyTalk gained 183 referrals—33% of which closed in half the time of a typical sales cycle.”
- Evernote’s customers get points every time they make a referral, and these points can be redeemed for a month of premium services. Also, customers get extra points if the client referred by them purchases premium services from Evernote.
- Free Agent offers stackable rewards in its referral program, and its reward incentives last only till the time both the referrer and referee are on a paid subscription.
- Verafin’s “Referral Rally” contest is one of the finest examples of effective referral strategies. Fun games are really engaging for the customers. Tesla uses different incentives to attract more customers; the company offers everything from exclusive prizes to invitations to VIP events.
- Influitive believes in referral programs that offer an enjoyable referral experience to both parties. Such programs yield quality leads.
“4 Ultimate Examples of SaaS Customer Referral Programs”
- According to this article, customer referral programs from Airbnb, Dropbox, Uber, and PayPal are some of the SaaS space’s best referral programs.
- Airbnb offers a dual-sided referral program when a registered customer refers Airbnb to a friend; they get travel credits, and the referred customer is offered a discount.
- Dropbox facilitates its users with a “direct and simple” referral program, where every user gets free storage space for referring Dropbox to a friend.
- Uber also offers a double-sided referral program, where both the referrer and referee earn incentives by participating in the program. PayPal’s referral program uses cash bonuses to attract quality leads.
Growing a Customer Base Through Referral Programs in SaaS/Tech
“5 Reasons Every SaaS Business Needs a Referral Program”
- The article from Referral Candy enumerates five reasons why every SaaS business should have a customer referral program.
- Generating quality leads is a hectic task, and referral marketing hits the right spot when it comes to lead generation. “A study conducted by Software Advice revealed that 78% of B2B marketers said that referral marketing generates high-quality leads.”
- “In comparison, 60% said that referral marketing generates a high volume of leads.”
- Referral marketing significantly impacts customer acquisition costs, and it also enables a balanced business model where the customer acquisition costs are less than the lifetime value of a customer. It also increases overall conversion rates and reduces churn rates. Referred customers offer higher profit margins than non-referred customers.
“Why Every Growth-Focused SaaS Needs a Referral Marketing Program”
- The SalesCamp article highlights that lower customer acquisition costs, healthier lifetime value of a customer, better quality and quantity of leads, and higher conversion rates are some important reasons why SaaS businesses should have a customer referral program.
- A collaborative research study conducted by Heinz and Influitive unveiled that nearly 70% of companies who already have a referral program were about to meet or exceed their earning goals.
- “51% of companies with referral programs say their effectiveness at maintaining sales pipelines is very effective.”
“How to Supercharge Your SaaS Customer Referral Program”
- This article shared a few tricks and tips for a successful referral program. For maximizing the chances of being referred by a customer, companies should find the perfect time to ask the customer for a referral. The perfect time could be when the customer will be willing to refer the service to a friend, for instance, if the client is pleased with the service, or has achieved multiple milestones with the help of the product, or has shared positive feedback with the company.
- Companies should research more about referral incentives and should offer something that their customers would really want. This article suggests that companies should allow anyone to refer their service to potential customers and not limit their referral programs to existing customers.
- The reward programs should be beneficial for both the referrer and referee; this helps build stronger relationships with existing and potential customers.