![]() ![]() Thus making it clear that referral marketing programs are key when it comes to acquiring loyal customers. The longer a user is signed up for a product or service, the higher the CLV will be making customer loyalty a very important aspect when it comes to SaaS companies.Īccording to a study, referred customers have a 16% higher lifetime value than when acquired through other marketing channels. Increased customer loyalty is of vital importance for any marketer or startup founder.Įspecially for SaaS products where the business model is often based on recurring revenue, such as monthly or annual subscriptions, the main goal is to increase customer lifetime value (CLV) and decrease customer churn rate as much as possible.ĬLV is basically how valuable a customer is in monetary value across his whole relationship with a business. This makes referral marketing one of the most efficient and cost-effective ways of acquiring new users.Īuthor’s Note: You can further lower your CAC by offering a reward that’s no cost for you, such as free content or free trials. ![]() What’s more, according to eMarketer, referrals drive the highest B2B conversion rates, at 3.63%. This is because we’re dealing with a pay-for-performance marketing strategy meaning that you only have to reward referrers once a new user has signed up for the product. Whether we’re talking about a CRM, an ecommerce, or an SEO software. One of the most important advantages of using a referral program for your SaaS is the very low customer acquisition costs, also known as CAC. Benefit #1: Low customer acquisition costs (CAC) What we still need to talk more about, however, are the awesome benefits you can get from referral marketing besides just expanding your user base, which is the ultimate purpose of it. We hope that by now you’ve got a good understanding of what a referral program is and are excited to learn more about it. What are the Benefits of a SaaS Referral Program? ![]() Of course, there are many benefits that can derive from a successful customer referral program. Naturally, this was a great incentive that was both appealing and aligned with the product’s capabilities. This was achieved by utilizing the two-sided referral tactic, where both the referrer and the referred customer get rewarded with extra storage space. If the number sounds mind-blowing, that’s because it is how did they do it though? The software actually managed to increase its user base by 3,900% in just 15 months by applying a great referral system. We’ll cover a few great examples further on in this guide, but possibly the most popular referral marketing story is the case study of Dropbox, a file storage service founded in 2008. It can be a gift card, free content, free products, and even free money. The reward can vary depending on the nature of the software. That way, every time a new user signs up for the product using that same link or code, the referrer is given a reward.Īctually, in many cases, both the referrer and the new user are rewarded also known as a two-sided referral. In simpler terms, the existing users – or referrers – are usually given a referral link or code which they can share with their friends, family, and even with their online audience through blog posts and social media. Get Started with an Efficient Referral Program for Your SaaS What is a SaaS Referral Program?Ī SaaS referral program is a way for software companies to expand their customer base by rewarding their existing customers every time they share the service with others.īy doing this, they manage to increase the influx of new customers without having to spend large amounts on marketing campaigns. How to Create a Great SaaS Referral ProgramĤ SaaS Referral Program Examples to Inspire You ![]() Let’s get going as we’ve got lots to cover. Plus, we’ve gathered some of the best examples of companies that have successfully taken advantage of this strategy for you to get inspired.
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