User referrals are a powerful tool for growing your SaaS business quickly, efficiently, and with minimal investment.
To help you on the road towards sector domination, and to push your user referrals nearer to the hallowed point of self-sustaining growth, I'm outlining 9 awesome SaaS customer referral hacks.
1) Ask, Ask, Ask
If you want user referrals, ask for them.
It’s surprisingly common for SaaS businesses to rest on their laurels, and simply assume that user referrals will happen naturally. Even with a solid foundation of satisfied customers, there’s no guarantee that users will take it upon themselves to refer you business.
If you want customer advocacy, you need to ask for it, explicitly and clearly. Instead of sitting with crossed-fingers, explain to your users that referrals help you to continually provide a great service – and that you’ll appreciate any help they can offer.
2) Offer Two-Sided Referral Incentives
When you ask for a referral, you ask for a favour. Your user has to go out of their way to recommend your SaaS service to a friend or colleague; in addition to the time, energy and money they’ve already committed to your business.
To make the trade a little less one-sided, you can offer incentives for each referral. By offering the incentives to both referrers and successful sign-ups, you can dramatically increase both the amount and success of referrals:
- Uber offer $10 of credit for every friend invited to their service (up to a maximum of 30 referrals). It's these free rides that drive most of Uber’s growth.
- Dropbox offer increased storage to both referring users and successful sign-ups, driving a 60% increase in new users.
3) Don’t Limit Incentives to Successful Sign-Ups
Your users have no control over the success of their recommendations. By making rewards dependent on successful sign-ups, you’re taking the process out of your user’s control, and risk disincentivising the referral process. Instead, offer rewards for referrals alone – and take steps to control the types of people they refer.
4) Tell Your Users Who to Invite
If you’ve spent any time determining your buyer persona (you should), you’ll have a great idea of the type of people that typically buy (and benefit from) your SaaS product. You can use that information to make every referral count.
Instead of wasting precious referrals on friends and family that won’t have any interest in your software, ask explicitly for referrals to work colleagues, or their boss, or whoever they know that most closely matches your buyer persona. Guide the process to reach the people most likely to sign-up – and don’t leave the choice to fate.
5) Reduce Referral Friction
Referrals take up your user’s precious time – and the more time you demand from them, the less likely you are to actually earn a referral.
Nobody is willing to battle through a complicated, multi-stage referral process, for the sole reason of ‘doing this company I kinda like a favour’. Your referral process needs to be quick and efficient, offering a selection of referral mechanisms for your user to choose from.
As well as offering the standard email template, it’s a great idea to make referrals possible through social media, and even the sharing of a direct link.
6) Ask for a Referral After a Success Milestone
Even with the offer of meaningful incentives, the timing of a referral request is everything. To maximise the chances of getting a referral, you need to catch your user at a point of maximum enthusiasm – just after they’ve had a positive experience with your product or service.
For example, if you sell a SaaS CRM tool, you could contact your user just after they’ve closed a sale, offering your congratulations and asking for a referral. At this stage, users are likely to be genuinely grateful to your business: they’ll be more likely to want to refer you, and they’ll be more inclined to do so with a glowing recommendation.
7) Limit Invites
You’d be forgiven for asking users to invite '100 friends', but in reality, that’s never going to happen. Instead, it might be better to limit the number of referrals they can offer, to the region of 2 or 3.
When Lincoln Murphy of Sixteen Ventures trialled this concept, he found that limiting referrals forced users to think closely about their referrals – and choose only the people they thought were most likely to use and benefit from the SaaS product.
8) Write a Killer Referral Message
The referral process doesn’t stop when your user clicks the ‘send’ button. We care about users, and new sign-ups, so it’s essential to optimise any and all contact you have with potential new users.
As well as asking users to write a personal recommendation of your service, it’s important to include a referral message. Treat it like a landing page, and use all of the persuasive tools and tactics at your disposal – a ‘hero image’ of your product in action, a bullet point list of product benefits, and some additional social proof.
9) Ask Again
A decent customer-business relationship will last a long-time. During that relationship, there’ll be multiple success milestones, and multiple opportunities for you to ask for a new referral.
Most users will be happy to help out throughout their relationship, as long they’re satisfied with your service, and the referral process is quick and easy to complete. To stack the odds even more in your favour, you can even dig into their referral history – and tell them how many new customers their help has generated for you.
To learn more about scaling your SaaS business, in a sustainable, cost-effective way, you can download our free eBook below.