6 Referral Program Strategies for SaaS Startups

Terkel
Aug 16

 • 

4 min read

Referral Program Strategies for SaaS Startups

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What is one best referral program strategy for a SaaS startup (like Terkel) to engage with and grow its user base?

 

To help you best attract new users and grow the customer base for your SaaS startup, we asked startup founders and business owners this question for their best strategies. From adopting the points system to incentivizing with a double-sided referral program, there are several referral program strategies that may help your startup entice its customers to recommend your SaaS brand to new users.


Here are six referral program strategies for a SaaS startup:

  • Adopt The Points System
  • Make Sure Your Buyers Adore Your Product
  • Use Free Users to Build Brand Loyalty and Accrue Referrals
  • Surprise Clients by Doing More Than They Expect
  • Use a Tiered Rewards Structure
  • Incentivize With a Double-Sided Referral Program

 

Adopt The Points System

A points system is a great way to engage users and get them referring friends. For every friend a user refers, they earn points that can be redeemed for prizes. This encourages users to keep referring friends, and it also helps to grow the company’s customer base. Points systems work especially well for SaaS startups because they can be easily integrated into the product. Users can see how many points they have earned, and they can track their progress toward redeeming prizes. Additionally, points systems can be customized to fit the company’s brand and tone. For example, a company might offer different prizes for different referral program milestones, such as 5 referrals, 10 referrals, or even 100 referrals.

Jonathan Saeidian, Brenton Way

Adopt The Points System

 

Make Sure Your Buyers Adore Your Product

In my opinion, you must provide exceptional service in order for your clients to recommend your goods to others. Benefits and awards may generate some initial excitement, but consumers never become brand advocates until they accept and like your SaaS product.

Monitor your performance and overall satisfaction using customer relationship management (CRM) software. Make certain that your consumers are pleased with both the product and the customer experience they receive.

Also, look at your web reviews and use user feedback. If there are places where you can improve, make the necessary modifications to make your business and products better. The more satisfied your clients are before and after your marketing program is implemented, the more effective it will be.

Eric McGee, TRGDatacenters

 

Use Free Users to Build Brand Loyalty and Accrue Referrals 

A creative referral strategy I’ve seen a few companies use is getting your free users to refer their friends and colleagues, and in exchange, if they hit a given number of referrals, you’ll upgrade them to a paid plan for a given number of months. This allows your free users to continue to use your platform, build brand loyalty and get them to become brand advocates over time. Also, once their plan is upgraded, you can continue to incentivize them to refer users by giving them the option to continue to receive either free months of the upgraded plan, cash, or gift certificates to other stores or platforms.

Nick Cotter, Growann

 

Surprise Clients by Doing More Than They Expect

Surprise clients by doing more than they expect. A referral program is dependent on satisfied clients. Most customers have learned to expect high-quality items and courteous customer service, so to stand out you have to go the extra mile and do something different.  For example, you can send a surprise upgrade to their service for their birthday month, do special activities on social media, show gratitude with special discounts, or get involved in helping with causes your audience supports.  These gestures are an excellent approach to please your clients and urge them to suggest your company to their friends.

John Cheng, Baotris

Surprise Clients by Doing More Than They Expect

 

Use a Tiered Rewards Structure

With referral programs, the options are truly endless and the ROI is much higher than with traditional advertising. 9 out of 10 people trust word-of-mouth recommendations from people they know over ads on TV or on social media. Tiered rewards can be a great way to incentivize people to refer more customers to your business.

Benefits does this by having a four-tier system. For the first tier, if someone refers 1-10 users, they’ll get $50. For 11-50, it’s $250. For 51-150, it’s $500. Finally, for 151+ users, the reward is $1000. You can use this structure with or without offering a cash incentive.

If a company wanted to use this method but didn’t want to pay cash, they could offer free service for a period of time for each tier. For example, a first-tier option might include 1 month free for the referrer if they can bring in 1-15 people. Second-tier could be two free months for 15-50 people and so on. Tiered rewards can bring in plenty of new customers.

John Cammidge, JTC Consultants

 

Incentivize With a Double-Sided Referral Program

A double-sided referral program offers a strong incentive for happy customers to bring in new users for your SaaS. An example would be, “When someone new signs-up with your link, they get their first month free and you get one month free.” Offering limited-time free access to your SaaS can be a cost-effective way to grow a startup. Or if you have the funds, offer a monetary incentive such as $10 for the new person and $10 to the existing customer. Famously, Dropbox grew 3900% in just 15 months using a double-sided referral tactic.

Scott Lieberman, Touchdown Money

 

 

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