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How to Supercharge Your SaaS Customer Referral Program

By Emily Smith on Fri, Sep 30, 2016

Customer referrals are key to growing your business and unlocking your company’s potential for viral growth. Additionally, securing user referrals is a sure-fire sign that you’re getting things right - that your SaaS product is delivering real, measurable value to your existing customers.

Today I’m helping you supercharge your SaaS customer referral program by sharing six simple, actionable tips for getting more referrals from your users.

1) Ask at the Right Time

“It doesn’t matter how awesome your product is, the majority of people will never recommend it unless you prompt them.”

Referral SaaSquatch

When it comes to asking for a referral, timing is everything. Customers are much more likely to refer your service to a friend or colleague if they’ve just hit a success milestone, and achieved a real ‘win’ with your SaaS product.

So, when your customer has had a positive experience with your product – for example, they’ve sent their first invoice, created their first project, or marked their first task as complete - that is the perfect time to ask for a referral.

A word of warning: asking at the wrong time, or asking too often, is likely to decrease your chances of getting a referral from your customer, so time your requests carefully, and only ask when you’re sure your customer has achieved something with your service, maximising your chance of success.

2) Let Anyone Make a Referral

One of the most common mistakes companies make is limiting their referral program so that only their existing customers can make a referral. But are you accidentally sabotaging your customer referral program by only limiting it to just your existing customers?

There might be people who find your solution but don’t have the budget to spend on it, but know colleagues in other departments, or have other people in their professional network, that do. Or they may think your solution looks awesome, but know that it’s not something that will directly be useful in their day-to-day job, whereas for one of their colleagues it will be hugely beneficial.

Opening up your customer referral program to people who aren’t already customers can help you encourage these types of referrals. What have you got to lose?

3) Offer Incentives

When you ask your user to recommend your service to a friend or colleague, you’re asking them to do a favour for you. But what’s in it for them? This user is already committing their time, energy and money to your company, so how can you encourage them to dedicate a bit more of their time and energy to you?

A successful referral is worth a lot to you, so it’s important to offer your customer something valuable in return for their help. For example, Freshbooks offers $100 for every successful referral:

Freshbooks_customer_referral.jpg

Freshbooks' customer referral program

The secret to a great referral incentive is to offer something tangible, that you know your customers want. It shows that you understand what matters to your customers, and also means that making referrals is worth their time, as it’s not just benefiting your company.

4) Reward Both Sides

Many SaaS companies make the mistake of only rewarding the referrer. But the success of your customer referral program depends on two sides: you need someone making the referral, and someone accepting the referral.

Therefore, to increase the chances of your referral being accepted, it’s becoming increasingly common to offer rewards to both parties, to further incentivise your customer referral program.

Dropbox is well known for their customer referral program, which lets users earn additional storage space for every person they refer – and also offers ‘bonus’ storage space to the recipient of the referral, incentivising them to sign-up, too.

Dropbox_customer_referral.jpgDropbox customer referral program

5) Make it Easy to Make a Referral

The more time and effort it takes to send a referral, the less likely your customers are to do so. You’re asking them to do you a favour, and spend their own time to help you expand your customer base, so it’s important that you value their time and effort.

Therefore, the most important thing to remember when creating a customer referral program is to make the referral process quick and easy to do.

A frictionless referral process should require no more than two steps to send the referral, and you should be able to make the referral in-app or on-page. Otherwise, making a referral will be a disruptive process, taking users away from your service and the value it provides.

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