In SaaS, customer referrals are a really big deal. They drive growth in a cost-effective way, they develop trust between your brand and would-be customers, and long-term, they can even create a self-sustaining 'viral loop of growth'.
But if you ask for a referral at the wrong time, you'll get ignored. And it's hard to come back from that. So, you've got one shot at getting it right.
Ask at the Right Time
If you want to maximise your chances of securing a referral, you need to ask at the right time.
Sounds obvious, right? But timing is everything. Even with a decent incentive and a low friction process, referrals can be a bit of a chore. If you ask for a referral when your customer is having a bad time with your app, or they have other things on their mind, you'll get ignored.
So to maximise the likelihood of a successful referral, you need to ask for it at the most opportune moment possible, when your user will A) be happy to do it, and B) do it in an effective way.
That means asking for your referrals at very specific times:
1) After a Success Milestone
People use your SaaS product for one super simple reason: they want to achieve something with it. Whether they're trying to generate more leads for their business, close more deals, or get a better handle on their finances, these goals are your users' desired outcomes.
Most desired outcomes are big, complex goals that can't be achieved in a single leap. A success milestone is an intermediary step, something that takes your user closer to their desired outcomes. The closer your user gets to their desired outcome, the better they'll feel about your product, and the better your chances of securing a referral.
Your Success Milestone ≠ Their Success Milestone
Something to note: I've seen a few other companies suggest asking for a referral when a customer has hit a particular usage milestone, say 1,000 messages sent.
Thing is, that's a success milestone for you - not for them. In most cases, your customers never set out to send 1,000 messages: their actual goal was to generate more leads with their email marketing, or reduce customer churn through improved support messaging. That 1,000 messages was just a by-product, something that means more to you than your user. So, before asking for your referral, make sure the trigger event was meaningful for the user - and not just you.
2) After a Successful Upsell/Contract Renewal
Churn is the biggest enemy of the growing SaaS business, and to guarantee a solid foundation of MRR, your team need to be spending a significant portion of their energy encouraging customers to renew their contracts, and wherever they could benefit from it, purchase service upgrades and helpful addons.
With all that time going into upselling and renewals, it makes sense to maximise the benefit you'll gain from it. Successful renewals and upsells are indicative of happy, satisfied customers, so why not capitalise on their guaranteed good mood, and ask for a referral?
This has the added bonus of hitting on the 'commitment and consistency' principle: your customer has just recommitted to using your product, and they'll be much more likely to actively recommend you as a result.
3) After a Positive Customer Survey
If you want to find out when your users are at their happiest, why not... ask?
Customer survey tools (especially the Net Promoter Score) offer a quick, efficient and cost-effective way of connecting with your users, and asking them about their experiences with your product.
If you receive glowing feedback from your customer surveys, it makes sense to reach out with a Thank you! and a polite request for a referral.