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Software as a Service is one of the most powerful strategies for business on the scene. It only makes sense then that SaaS companies would want the most powerful hack for growth.
In my years of experience, that perfect hack is a referral program! It’s cheap, efficient, and a surefire way to build up trust with your customers.
So pull up a chair, and I’ll serve up the essential components of a referral program for SaaS companies, along with some examples to jumpstart your own.
Understanding the Concept of a SaaS Referral Program
Referrals are one of the oldest marketing techniques in the book, and there's a good reason they've lasted as long as they have. A well-structured referral program harnesses the passion of existing customers and turns it into growth.
It does this by offering incentives to people who recommend the company to their friends and colleagues. By offering discounts, gifts, or even money, you’re able to create a win-win situation for you and your users.
Uncovering the Advantages of SaaS Referral Programs
There are tons of advantages to starting a referral program for your SaaS company. Let’s unearth a few of the most powerful ones.
Cost-Effectiveness
Referral programs are the ultimate bargain for businesses looking to make their mark! With minimal overhead and time investment, you can reach out to your customers' networks and draw in more traffic.
Imagine a shopping mall where all your customers bring their friends along with them – it's like getting three times the return with the same investment!
Confidence-Building
Referral programs are an incredible way to build trust with your customers in an age where people hesitate to try something new.
Instead of only relying on your product to convert, you can have your current customers step in and act as advocates. People trust their friends, and having your existing customers speak positively on your behalf will be game-changing for your business.
Gamifying the Experience
Gamification is a marketer's superpower and more than any other program, referral lends itself to customers having a bit of fun. Turning it into a game is a sure way to capture their attention and keep them engaged, boosting sales and building brand loyalty.
So open up that prize store, there's nothing more fun than offering rewards for your customers playing their favorite game...your referral program!
Step-By-Step Guide: How to Create Your Own SaaS Referral Program
A lot goes into a Referral Program, and when you’re specifically targeting SaaS customers, it can get esoteric quickly. Here’s a step-by-step guide to reaching the end goal with style.
Step 1: Set Yourself Up For Success
Before crafting your referral program, you need to ensure all the components are in place. This ties back to the way you do everything in your business, not just marketing.
Firstly, you need to make sure your product is memorable enough to recommend. A strong software that’s easy to use and becomes integral to your customers' lives is way more likely to come up in conversation than one that just gets the job done well enough.
Make sure your team values customer service and connection. This kind of relationship will make your users far more likely to share their experiences with their friends.
When you sit down to start making the program itself, understanding who your ideal customers are and what makes them tick will help you create useful content and choose an effective reward.
Step 2: Choosing a Reward
A cool reward can make all the difference when it comes to getting your customers invested in referrals. When creating a program to promote your SaaS business, this can take many forms.
You will need to decide who exactly is receiving a reward for referrals. Maybe the referrer, maybe the new customer, maybe both.
I find that offering a reward to both parties makes the process more successful, as everyone is excited to get involved.
When it comes to SaaS incentives, some rewards are going to be more effective than others. Chances are a B2B customer will not be as invested in branded swag or gifts as a B2C customer might be.
Think about your user base. Would a discount or free month of subscription get them excited, or a donation to a specific charity, or even an upgrade to their service plan?
This is where knowing your target market makes a huge difference.
Step 3: Utilize Referral Tools
Before your launch, it’s important to have everything in place. Working with a software tool designed specifically for referral tracking is a great way to ensure you haven’t forgotten anything.
Referral Hero allows you to keep track of every individual referral, so you never miss a reward. Our experts can even help you figure out the logistics from the get-go.
When you’re trying to increase your customer loyalty, the last thing you want is an overly complicated or faulty system. That’s why having a dedicated service like Referral Hero can make all the difference.
5 Inspiring SaaS Referral Program Examples
As you tackle your referral program, it can be hard to know how it will shape up. This is especially true with SaaS companies because they are all so unique and have specific niches they fill.
Looking at what other teams did to make their programs stand out can give you a jumping-off point so what you create is as specific and fresh as your product.
Trello
Trello is an app that lets you create Kanban-style cards and communicate with your team. It works great with big, multifaceted projects, and has both a paid and a free version.
When someone refers a friend to Trello, they get access to a free month of the full version of the app, Trello Gold.
Users are credited with a referral whether they bring in people through a link or by adding someone to their own Trello board. This means that they can be rewarded for something they would already be doing.
What Works
This system combines ease of use, and strategic rewards to create a one-two punch of effective referrals.
Chances are, people on Trello will end up sharing bringing someone new onto their board even if they don’t know about the referral program. It's inherent to the collaborative nature of the software.
When they receive the month of Trello Gold, they will experience features they would not have known about otherwise. When the free version of software works as well as this does, it can be difficult to sell the upgrade.
In this way, Trello’s referral program simultaneously rewards users for bringing in new customers and gets them hooked on the advanced version.
Canva
Canva makes the art of graphic design accessible to anyone. They have an endless library of assets to help even the most hesitant creators make something beautiful.
Much like Trello, Canva rewards people for referrals by giving them access to advanced features. You can use a premium element in a project such as an illustration or stock photo in your next project.
What Works
Because the reward is an in-software gift, users are encouraged to come back to Canva again and again. If they like the asset, they will be motivated to either buy a subscription or continue to refer more friends. Either way, it’s a win.
Canva also makes excellent use of timing. They ask for referrals when a user finishes a design and exports it. This way, they are riding the high of a successful project and are far more likely to recommend the tool.
Alteryx
Users can access powerful, easy-to-understand data science and analytics through Alteryx. The software is great for beginners and experts alike because of its simple interface and extensive insights.
Because it operates in the B2B sphere, Alteryx has crafted their referral program for the long game. Referrers receive $15 when a friend downloads the software, and another $200 when they ultimately make the full purchase.
What Works
B2B softwares have a longer sales cycle, and each client brings in more revenue than a client for Canva or Trello. Having larger rewards and a tiered system encourages referrers to stay invested and bring in quality leads.
Alteryx also focuses on their rewards appealing to a wide range of people. Each credit can be turned into a different reward, from charitable donations to gift cards. This system can get complicated, but ultimately means no one is disappointed by their prize.
Shoeboxed
Another great example of a B2B software, Shoeboxed allows freelancers and contractors to easily track expenses digitally and physically.
Their referral program has a dual reward structure, with both the person referring and the new customer getting a 10% discount for their subscription.
What Works
A discount isn’t always something to write home about, but Shoeboxed makes their offer stand out by keeping it applied for a full year. Referrers and new users will have an added incentive to continue using the service, and see the benefits long-term.
They also bring new users directly to their referral page, making sure every single person on their software understands the benefits and how easy it is to get started.
Drift
Drift helps their customers find qualified leads and get their sales cycle shortened. With chatbots and no-code workflows, they’re easy to use and get returns right away.
Referrers can win fun and unique prizes like a special edition Adidas jacket, or a free lunch with the company’s founders. This creates a feeling of being a part of a club, and keeps people invested in their company long term.
What Works
When it comes to referral rewards, Drift takes a different approach than the other SaaS companies we’ve looked at. They focus on connecting with their customers and creating brand loyalty through swag and experiences.
People are likely to remember these gifts far longer than they remember a discount, encouraging them to bring in more people again and again.
The Bottom Line
SaaS platforms face the unique challenge of needing an ongoing relationship with each and every customer. A smart marketing plan will not only bring in new clients, but remind existing clients why they love your company so much.
Referral programs make both of those possible in a cost-effective, innovative way. ReferralHero understands how to make that happen. Our platform offers the necessary tools to put your referral program into effect, allowing you to reap the rewards of quality referral growth.
By investing in a referral program, you can ensure your SaaS company is flourishing far into the future.
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