Word. Of. Mouth. Someone buys your stuff. They like it. They tell their friends. The friends buy your stuff. They like it. Then they tell their friends.
Maybe you’re thinking, “Sure. In a perfect world, I could see that happening.” But it doesn’t just happen in a perfect world. It happens in the one we live in – your world. Nearly 90% of B2B buyers say word of mouth is the biggest factor in their purchasing decisions.
One of the key components to increasing your sales this way is having a referral program. It incentivizes your existing customers to promote your product or service in return for certain rewards.
But how do you go about setting up such a program? Any beginner is going to need help – a guide to help walk you through the process.
Well, friend. You’ve found yourself in the right place. We’re about to teach you how to create a great SaaS referral program. Let’s rock.
Table of Contents
How to Create a Great SaaS Referral Program – Understanding the Mechanics
So, you’re interested in discovering how to create a great SaaS referral program. It comes down to understanding the mechanics of this system.
- Loyal customers share their unique referral link with their network
- They can promote your business online
- They can post reviews of your service
To break it down further – figure out what you want your loyal customers to do and then incentivize them to do it.
To reward these great customers, hook them up with discounts, free upgrades, or even cash.
How is something like this so effective?
It’s not random people who are talking about your service or products. It’s paying customers.
Suppose you ask friends about a movie you’re interested in seeing. Are you going to pay more attention to the people who actually saw it? Or to those who are regurgitating the reviews they read online?
The same is true with companies. You are probably more willing to try a product or service that comes from your professional network than a random YouTube influencer.
It’s essentially a form of social proof. People tend to trust recommendations from friends and family. Most people do not trust traditional advertising methods.
If all goes well, you’ll see higher conversion rates and build a loyal customer base. Not a bad combo.
The Benefits of a B2B SaaS Referral Program
Besides the obvious increase in customer acquisition and retention, a B2B SaaS referral program has many other benefits. These include:
- Cost-effectiveness: Referral programs can be incredibly cost-effective. You’re using your existing customers as brand ambassadors.
- Targeted marketing: Since your customers already know and trust your product, their referrals will likely be of high quality.
- Increased credibility: People trust recommendations from friends and family. Someone with a lot of clout in your sector can boost your brand’s credibility and reputation.
- Valuable feedback: Referral programs are a way for you to gather valuable feedback from your customers. This helps improve your product or service.
How to Start a SaaS Partner Referral Program Tips and Key Elements
We’ve now got the basics covered. But now it’s time for some “How to start a SaaS partner referral program tips”. Let’s dive into the key elements of success:
- Clear and attractive rewards: Your rewards should be enticing enough to motivate your customers to participate. Incentives should align with your target audience’s interests.
- User-friendly process: Make it simple. So simple your grandma, who barely knows how to use a cell phone, can figure it out. The easier the referral process for your customers, the higher the likelihood that they’ll engage in it.
- Tracking and analytics: Track the success of your referral program to see which channels are bringing in the most referrals.
- Personalization: Tailor your referral program to fit your brand’s voice and image. It will make it more appealing and authentic.
How to Create a Great SaaS Referral Program in 5 Steps
Here’s how to Create a great SaaS referral program in 5 steps. No matter what kind of business you have, everyone will need to follow these to find success.
- Define your goals: Set clear and measurable objectives for your referral program. These can be anything from the number of new customers to the revenue you want to generate.
- Choose your rewards: Determine what type of rewards you will offer, whether it be discounts, free upgrades, or cash incentives.
- Develop a referral link system: Decide how to track referrals and provide unique links to your customers.
- Promote your program: Spread the word about your referral program through email marketing, social media, and personalized messages to existing customers.
- Monitor and analyze: Keep track of the success of your program and make adjustments as needed to optimize results.
As an entrepreneur, you’ve probably already guessed that there is way more to it. But the truth is, most of this stuff is relatively simple. That doesn’t mean it’s easy. Most things worth having and doing right are not. That’s why you should pay special attention to the next section.
Tools and Platforms for Streamlining Your SaaS Product Marketing
Many tools and platforms are available for SaaS product marketing. They can help you set up and manage your referral program. Here are some notable options:
ReferralCandy
Price: $47/month + 3.5% commission (if you pay annually)
Free Trial? 14 days
The amount of customization ReferralCandy offers is amazing. You can send an email as soon as someone makes a purchase, build custom rewards, and more. It integrates with Shopify, WooCommerce, and BigCommerce, to name a few.
Ambassador
Price: $250/month for the basic plan with no bells or whistles
Free Trial? No. But they do offer a demo upon request.
The most comprehensive tool on our list for building and managing all aspects of your referral program. Ambassador handles rewards, communication, analytics, and more. Unlike other platforms, this one integrates with Salesforce…at a cost.
Referral Factory
Price: $76/month for the starter pack (if you pay annually)
Free Trial? 15 days
Referral Factory claims their software can help you build a program in five minutes. It’s used by large companies like Nationwide Insurance and Volvo, to name a few. They offer more than 1,000 templates to get you started that you can customize to fit your brand.
CrewFire
Pricing: $10,000/year (if paid annually)
Free Trial? No. But they do have a demo.
What? Ten grand? Why would we be talking about such a thing for people just starting?
Hear us out. CrewFire does way more than help you get a referral program started. They help you build an entire army of brand ambassadors. CrewFire also helps create campaigns, offers an in-house payment system, and lets you send mass texts to all your ambassadors.
So even if you can’t swing it right now – it might be worth looking at once you do have a more robust marketing budget.
Friendbuy
Pricing: $249/month for the starter package
Free Trial? 30 days
Friendbuy does pretty much everything the rest of these programs do. Except it’s more of an “LTE” version. Unfortunately, it’s not LTE on price…
Heh…
It’s easy to use. The code is lightweight. It offers A/B testing, and you can use any reward structure you want. It also measures your KPIs for you.
How to Create a Great SaaS Referral Program: Evaluating Success
If you want to know how to create a great SaaS referral program, you also want to know how to figure out if things are working. To ensure the success of your referral program, it’s crucial to track and analyze its performance continuously. Some key metrics to keep an eye on include:
- Number of referrals: A clear indicator of how well your program performs. It’s an easy metric to see what’s working and what isn’t.
- Conversion rate: Track how many referrals convert into paying customers. A high rate shows your program is effective.
- ROI: Keep track of the costs associated with your referral program. You can then compare it to the revenue generated to determine its return on investment.
Subtle Differences Between a Referral Program and an Affiliate Program
You may have heard the terms “referral program” and “affiliate program” used interchangeably. They are actually two different things.
While both involve incentivizing people to promote your product or service, there are some key differences between the two.
- In a referral program, customers typically receive rewards for referring new customers who make a purchase.
- On the other hand, in an affiliate program, people are usually paid for promoting and selling the product or service.
- Affiliates may receive an ongoing commission for subscription sales.
- Referral programs often involve a one-time reward for each successful referral.
- There also tends to be a lower barrier to entry in the referral market. It’s easier for customers to refer friends and family than it is to become an official affiliate.
- Affiliate programs usually have stricter guidelines and criteria for participants. Referral programs are often open to all customers.
Knowing these differences can help you determine which type of program would best suit your business goals.
When an Affiliate Program Makes Sense
While referral programs can be highly effective for SaaS businesses, there are certain cases where an affiliate program may make more sense. This is usually the case when:
- Your target audience is other businesses: Affiliate programs may work better with established B2B companies. This helps enterprise-level businesses generate higher-quality leads.
- Your product has a higher price point: Affiliate programs usually involve ongoing commissions. They can be more lucrative for businesses that sell higher-priced products or services.
- You have a strong niche market: If your product caters to a specific and passionate niche audience, an affiliate program can tap into this community and generate more sales.
Both referral programs and affiliate programs have their benefits. Which one you go with depends on your business’s goals and target audience. It’s important to carefully consider your options and choose the program that best supports your growth and success.
Tools and Platforms for Affiliate Programs
Starting your own affiliate program is going to require a different platform than a referral one. Here are some of the best in the business.
- ShareASale: A popular affiliate marketing network that connects businesses with potential affiliates. ShareASale handles tracking, payments, and reporting. They’re kind of like the Wal-Mart of affiliate networks.
- ClickBank: Another well-known affiliate network with a wide range of products and services available. A lot of the stuff on ClickBank can be a bit on the sketchy side. But it does have a ton of users.
- CJ Affiliate: Formerly known as Commission Junction, CJ Affiliate has partnerships with nearly 4,000 brands and controls nearly 8% of the market.
How to Create a Great SaaS Referral Program – Let Your Customers Earn for You
Figuring out how to create a great SaaS referral program can help catapult your startup to quick success. This type of SaaS product marketing amplifies your customer acquisition and retention efforts, essentially acting as a supercharger.
You harness the power of trust and social proof by incentivizing your current customers with a B2B SaaS referral program. Having a program that is user-friendly, offers attractive rewards, and is easily trackable will help to optimize its success.
Use platforms that make it easy for you to create and track your program. You’ll be more effective and can pivot on the fly. You can increase brand recognition and sales as a one-person SaaS army if you use these how to start a SaaS partner referral program tips effectively.