Encourage users to invite teammates to reduce SaaS churn
Why not ask current users who activate and have experienced Aha moment to invite their friends, teammates, and colleagues? This is a perfect way to get new users and retain existing users. Once they have friends, they're least likely to churn.
Evernote gets 13% of new users from its referral program. It grew to $1 billion SaaS with its referral program.
Airbnb used a referral program to increase bookings by a whopping 25%.
Dropbox increased its users from 100K to 4,000K with referral program in 15 months. It generates 35% of new users from its referral program.
How to use the technique
- Know when to ask for an invitation. You cannot ask new users to invite friends’ right after they sign up. It is best to persuade them to invite others when they activate and experience the Aha moment. Our free churn optimization framework has actionable insights on how to do it.
- Choose happy moments. Users are more likely to invite others when they're happy with your app and have achieved a milestone. Allow them to invite friends after they achieve milestones.
- Reward your users for inviting others. It is least likely that new users will invite others right away even if they're satisfied with your software. Rewarding your user and the people they invite is a great way to reduce churn and increase engagement.
- Use personalized messages. Keep your messaging highly targeted. Refer to buyer personas and link copy to one big problem that your app can solve for the new users.
- Create a referral program. A two-way customer referral program is the best way to make it work for your brand.
- Monitor and analyze for better insights. Is there are specific buyer persona that actively invites new people? Is there are specific action after which a major chunk of users invites new users? Find out how to analyze data for decision-making in our free churn optimization framework.
Mistakes to avoid
- Not making it smooth for users to invite others. If users have to take several steps to invite a friend, they won’t do it. Make it simple. Reduce friction. Create a one-step invitation program.
- Asking at the wrong time. This can be lethal. Not only that you won’t get new users but you might lose current users. Find the best time to ask for the invitation.
- Not asking multiple times. Asking your users just once to invite others to your software is least likely to work. Remind them via multiple channels (email, in-app messages, etc.).
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A research article published in the Journal of Marketing Research by Bulte, Bayer, Skiera, and Schmitt found that businesses can leverage their existing customers to bring new customers. This lets businesses increase the lifetime value of both the referral and referrer. The referral won’t churn as long as their referrer is with the company.
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