Do you wish to generate high-quality leads for your SaaS business without burning a whole in your pocket? All you need to do is create a referral program that works best for you.
Referral programs work for all types of businesses but, they work best for SaaS. You need a referral program if you want to connect with your customers directly. It is the most fruitful way for different types of SaaS businesses.
Now, if you’re keen on building your own SaaS referral program, this guide is a perfect match for you.
What is a SaaS referral program?
SaaS referral program is exactly what its name suggests, a referral program for existing users. The users will get a unique referral code. They can share their referral codes through direct messages or social media and earn rewards. Every time a new customer signs up using that referral code, the referrer (existing user) gets rewarded. Thus, the existing users are engaged, which increases their loyalty towards you.
It is specifically built for a software-as-a-service business. This program can save your marketing cost for new customers, which are high in B2B SaaS. The reward can be in various forms such as a gift card, sample products, free content or money.
All you need to do is choose the right referral tool and relax.
How does a referral program work?
The first thing you need to do is create a unique referral link or code for your customers. They will share this link or code with their friends and family. Later, when their family or friends sign up using the link or code referrer will get the reward.
Benefits of a SaaS referral program
By now, you’ve got a good idea of what a SaaS referral business model is. You should definitely know its benefits to understand it better. It will not only increase your user base but also has other exciting benefits.
• Lower customer acquisition cost
Why is a SaaS referral program easy on your pocket?
Referral programs only pay when a referral successfully becomes a new user. Referral marketing is one of the best and cost-effective ways of acquiring new customers. It is one of the best advantages of a referral program. You can also lower your CAC further by giving free subscriptions or trials.
• Authentic and much quicker conversation
Your referrer will recommend your product to someone who is likely to purchase your product, as he is familiar with your product. It will be more effective than you presenting your product. We often tend to trust people we know, so a lead will be more interested in buying the product. Plus, you don’t have to go through the long sales process, which will save your time. Thus, the SaaS referral program proves to be an authentic conversation.
• Increased customer retention and loyalty
As many SaaS companies work on subscriptions or timely purchases, referral programs prove more beneficial as referred customers have a higher retention rate than non-referred customers.
A SaaS company needs to maintain a good relationship with its users. As the income is not lump sum but in installments or repeated, it is very essential to retain the users. To keep existing users engaged and loyal to your product, you need to reward them in the best possible way. Giving them free subscriptions as a reward will surely make them stay.
The referral program works best because you get a new user and make your existing user happy by rewarding them.
• Increases brand recognition
How likely are you to use a product recommended to you by your friend or family?
Do you tend to use a product recommended by your favorite celebrity?
We all love and fall for it. Online referral programs works best. Knowing about a product by your close ones gives you the confidence to purchase it.
Similarly, when your user recommends the product to someone appropriate to purchase it, he is most likely to buy it. An existing user can explain your product in the best way and give a genuine review to its friends and family. When a referrer gets rewarded, he will develop more interest in recommending your products to more people. Further, the referred user can also refer more people. It will increase brand recognition and, you will gain their trust.
Now that you know what a SaaS referral program is and its benefits, are you ready to build your own referral program?
How do I create a SaaS referral program?
Here are the steps to create the best customer referral program
How to set up a referral program? You need to create a great yet simple referral program. To create a successful referral program, you need to motivate your user. Following are the steps that will help you to build a great referral program.
Step 1: Begin with customer referral program template
You have to start by creating a customer referral template. Make it as simple as possible if you want more and more customers to share your referral. It can be an email, a code or a link.
Step 2: Determine the rewards
Firstly, you need to fix what rewards your referrers will get. It can be one-way or two-way. One-way rewards benefit your user, and two-way ones benefit your user and the new customer. You can decide what the reward will be, whether a free subscription, cashback or a discount. Though the choice is yours, it should be attractive to the users. Your existing user should be interested in gaining those rewards. They should seek extra efforts to earn those rewards. Any reward that you determine should also benefit you.
Step 3: No hidden terms or conditions
While setting up the new referral program, you need to focus on making it crystal clear. Your user should not get fooled by fancy offers and later get disappointed. Make your offers as simple as possible. It should contain no hidden terms or conditions. What rewards the referrer will get, what rewards the new user will get and what benefits you will get; you need to make it clear right from the start. Hidden terms or conditions will upset your users or new customers. A clear referral program attracts the user and, they refer to it happily.
Step 4: SaaS referral fee
You can fix a referral program fee for your referrers. For every new referred user, you can give some percentage of the total sale to the referrer. It will be unique as it is not a fixed value and depends on the sale. The more the sale, the more will be the referrer commission.
Step 5: Make it effortless
An easy SaaS referral program encourages your user, and thus they promote it. It should not be a tedious task. A simple referral link or code works best. Whenever a new user applies the referral code or logs in using the referral link, he should access the program. Effortless referral programs are great referral programs.
The user benefits by referring to your SaaS, so make sure, they don’t have to go through multiple steps. A single click should do the job. Make sure there is a referral landing page during the signing in process.
Step 6: Keep a regular check on the working of your referral program
How many new customers have joined using the referral code? Through which platform they have joined the inviting link?
You need to monitor every single action as it will help you to understand whether your program is working or not. By analyzing, you can also change your referral strategy ideas. Based on the result, you will understand which strategy is working for you and which one is not and modify it accordingly.
SaaS referral marketing examples
5 SaaS referral marketing examples that will motivate you to build your own.
Here are SaaS referral examples that are doing wonders in the market. You can get ideas from a few referral card examples given below. Many SaaS companies have referral programs. You can choose any one or a combination or create your own ideas to make the best customer referral program.
Canvais a free graphic design platform that’s great for making invitations, business cards, templates, Instagram posts and more.
Referral program: When a new customer joins using your referral code, you get a free upgrade to Canva Pro.
Google Pay is a digital wallet platform and online payment system developed by Google in 2018 to power in-app, online, and in-person contactless purchases on mobile devices, enabling users to make payments with Android phones, tablets, or watches.
Referral program: When a referred user makes their first payment, both users will receive the reward. Behind every transaction, you get scratch cards, which may have discount coupons for various brands, cash back, or free subscription for apps.
Swiggyis India’s largest online food ordering and delivery platform, founded in July 2014. Based in Bangalore, it is operating in 500 Indian cities as of September 2021.
Referral program: When your friend signs up using your referral code on Swiggy, it gives you a discount coupon. There are exciting offers on your first order.
Myntrais an online shopping site for fashion and lifestyle. It is a major Indian fashion e-commerce industry. Founded in the year 2007, its headquarters lies in Bengaluru, Karnataka, India.
Referral program: Every time a new user signs up using your referral code, the new and exciting user get Myntra cash or a discount coupon. Myntra also has exciting offers for your first order.
Todoistis an application that manages your task. It is similar to OneNote. It lets you manage your personal and professional tasks across multiple devices.
Referral program: You get a two-month Pro subscription when your referred user upgrades to the Pro version.
A customer referral program is a best way to retain your customers and find new customers without spending much on the customer acquisition cost. It is a word-of-mouth marketing. By creating a referral program, you are creating a salesperson without actually hiring them. Now that you know what a SaaS Referral program can add value to your business. It would be the right move to add the same to your marketing strategy to boost your sales.