May 12, 2019

Offer Affiliate Programs

5. Referrals  >  Offer Affiliate Programs

Offer affiliate programs to reduce SaaS churn

The affiliate program works best to increase revenue and to acquire new customers for your app. The affiliates get paid whenever they invite someone to use your app. It’s a perfect example of offering a cash incentive.

● PERSUASION

Freshbooks

Freshbooks has a simple affiliate program that offers a commission on free signups.

Getresponse

GetResponse offers two different types of commission to its affiliates for more effectiveness.

Convertkit

Convertkit offers a flat 30% commission to its affiliates.

How to use the technique

  • Create an affiliate program for your app. Plan it. Set goals. Allocate budget. Plan estimated revenue, CAC, and LTV. Identify personas for targeting. Do the math. If you don’t know how to do it, grab our free churn optimization framework for details. 
  • Set a realistic commission without increasing the price of your software. Offer a decent commission to attract affiliates.
  • Promote your affiliate program. Reach out to top affiliates. Submit your program on affiliate networks. Use your networks. Send emails to customers. Promotion will make your affiliate program successful.
  • Target affiliates in your industry. Target influencers and invite them for partnership. Target micro influencers.
  • Give free access to your app so affiliates can try it. Start with your customers. Enroll them to your affiliate program. Give free (limited or unlimited) access to affiliates so they get to know your app better.
  • Build a network of affiliates. Engage with them. Send newsletter. Run an affiliate contest. Stay in touch with them.
  • Manage and improve your program. Use an affiliate tool to manage the affiliate program. Analyze and tweak your program based on feedback and performance. Use our free actionable guide for more details on testing and tweaking. 

Mistakes to avoid

  • Mixing affiliate and referral programs. An affiliate program is different than a referral program. You can offer both but these aren’t the same. Affiliates don’t have to be your customers necessarily. Don’t replace your referral program with the affiliate program.
  • Not promoting your affiliate program religiously. It’s essential to promote your affiliate program to maximize its reach. Make it visible to affiliates.

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> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

> How to Create an Affiliate Program for your SaaS

> Why Your SaaS Business Needs an Affiliate Program

> How to Pitch & Recruit SaaS Affiliates for Your Affiliate Program [Guide]

Research evidence

The Affiliate Marketing Report by Business Insider Intelligence revealed that affiliate marketing drives 16% of all US ecommerce orders (which is same as email marketing). Organic search drives 21% of all online orders while paid ads drive 20%. This reveals the importance of affiliate marketing in generating online sales.

16%

Affiliate marketing drives 16% of all US ecommerce orders (which is same as email marketing). Organic search drives 21% of all online orders while paid ads drive 20%.

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May 12, 2019

Give A Discount On Premium

5. Referrals  >  Give A Discount On Premium

Give a discount on premium in your referral program to reduce SaaS churn

Nothing works better than offering a discount to your customers. Use your referral program to increase retention by giving an instant discount on the premium plan. This will reduce churn and you’ll be able to increase LTV.

● PERSUASION

Typeform

Typeform allows its users to save up to 100% on your PRO, PRO+1, PRO+3 or PRO+5 subscriptions by inviting referrals.

Todoist

Todoist offers a smart premium discount. The referred users get two free months on premium and once they pay for premium, the customer who referred gets two free months.

Shoeboxed

ShoeBoxed offers up to 100% discount on the premium plan with it’s refer a friend program.

How to use the technique

  • Choose discount that won’t hurt revenue and LTV. Do the math. Check the history and finalize a suitable discount that you can afford to give on premium without hurting cashflow. Our free churn optimization framework is your best bet to get more info. 
  • Percentage vs. fixed amount. Offer percentage discount for small amounts (e.g. $2.5, $5, etc.) and amount when it’s of high value (e.g. $50, $100, etc.). Make discount noticeable even if it’s negligible.
  • Set discount limits. How much discount to offer per customer per month? Setting a limit is essential to stop cashflow from ruining. Set an upper limit for the discount.
  • Set expiry for discount. For customers who aren’t on premium yet but they received a discount, discount expiry will persuade them to switch to premium to avail discount.
  • Explain discount terms and conditions clearly on the landing page. It’s best to keep it simple and clear. Share limits and caps with your customers to avoid hiccups.
  • Remind customers who are not on premium yet. Send emails. Convince them to avail discount by switching to premium. Share the benefits of upgrading their plan.
  • Analyze and improve your referral program. What type of bonus works best? Are limits irritating customers? Test and tweak your program’s features and variables for optimization. Don’t know how to do it? Read our free actionable guide. 

Mistakes to avoid

  • Not explaining the benefits of the premium plan. Don’t make this mistake. It’s not just about the discount rather it’s about customer retention and LTV. Use discount as a base to promote the premium plan.
  • Setting a limit on the number of invitations per customers. Don’t limit the number of invitations rather limit the discount percentage that can be availed per month. Let customers utilize the remaining discount next month. This works best.

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READ MORE ON THE TOPIC

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

> How To Choose Your Referral Program Incentives (With 20+ Real Examples!)

Research evidence

Jonathan Krieger conducted a study on referral marketing best practices. The findings revealed that non-cash incentives are as much as 24% better than cash incentives in terms of enhancing referral performance. Non-cash incentives work best at engaging, retaining, reducing churn, and increasing repeat purchases.

24%

Non-cash incentives are as much as 24% better than cash incentives in terms of enhancing referral performance.

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May 12, 2019

Offer Limited App Resources

5. Referrals  >  Offer Limited In-App Resources

Offer limited in-app resources in your referral program to reduce SaaS churn

Offering limited in-app resources instead of cash (or credit) incentives is a great way to decrease the depreciation effect discounts have on a perceived product value. This will boost engagement and increase revenue in the long-run.

● PERSUASION

WorldOfWarCraft

World Of Warcraft gives a lot of in-app resources (e.g. exclusive pets) to users who invite their friends.

Dropbox

Dropbox has a perfect referral program where customers get free space (a limited resource) for inviting friends.

Sugarsync

Sugarsync offers free space to both the parties, which is an app resource that’s valuable.

How to use the technique

  • Select bonus and resource for the referral program. The best technique is to use behavioral analysis to figure out what resource customers use (and value) most. Offer a bonus on the same. The resource needs to be valuable. Read more in our free churn optimization framework. 
  • Use data to find the right resource that will motivate customers to participate in your referral program. Better yet, conduct a survey and ask customers.
  • Make sure the resource is valuable. If it’s already freely available in your app, it won’t work. Give bonus on your app’s core feature that’s only available premium customers.
  • Make it exclusive. Tell customers the bonus they will get is exclusive. Share its benefits. Show how useful it is.
  • Share bonus details. Clearly explain and share all the details and terms of the bonus and resource that customers will receive.
  • Tweak and improve. Finding the right limited and valuable resource is challenging. You need to test multiple variations. Grab our free guide on testing and analysis.

Mistakes to avoid

  • Giving bonuses on an invaluable resource. It’s all about the value of the resource. Is it really worth trying? If the resource is merely an add-on or an invaluable extension, it won’t motivate customers. Focus on value.
  • Not highlighting the benefits of the resource. If it’s a premium resource, it’s highly likely that a lot of customers won’t have access to it. So clearly explain its benefits in the referral program.

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> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

Research evidence

The State of Business Customer Referral Program by Amplifinity reported that B2B customers engage with peers and help them decide what to buy. As much as 80% of buying decisions in the B2B sector are influenced by peers. Giving customers access to bonuses will persuade them to not only use your app but refer it to friends and colleagues.

80%

As much as 80% of buying decisions in the B2B sector are influenced by peers (colleagues, friends, and family).

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May 12, 2019

Offer Reward Credits

5. Referrals  >  Offer Reward Credits

Offer reward credits to reduce SaaS churn

Offering reward points is a perfect way to increase repeat purchase. When customers get credits in their account, they're more likely to use them and stick with your app. The same is true for referred users.

● PERSUASION

Airbnb

Airbnb gives credit to customers and referred users which can only be redeemed in-app.

iPage

iPage has done a great job of defining credit in terms of dollar value.

Mailerlite

Mailerlite has as smart two-way credit reward where customers get the reward when the referral upgrades.

How to use the technique

  • Create a reward point system. Define each credit/point worth? How it will be earned and redeemed? How it will be integrated into the referral program? Develop a complete system. Get our free churn optimization framework for more information. 
  • Decide with a suitable value of a single point/credit. The best practice is to link it to the cash value. For instance, one point equals a dollar. This makes the calculation easy for customers.
  • Get feedback from customers about the reward system. Get suggestions for improvements. If your customers don’t like it or don’t consider points to be valuable, they won’t participate in the referral program.
  • Gamify the experience. Allow customers to earn points through multiple actions (including inviting a friend). Enhance the value of the points with gamification.
  • Simplify the reward system. Keep it simple yet attractive. It should be easy enough that your customers could explain it to friends without hesitation.
  • Share and explain it. Create a page on your website to explain the reward system. Explain it in-app. Share its details via email and social media.
  • Analyze and improve. Is your reward system motivating enough? Is it working? Are your customers participating in the program? Analyze data and tweak your program for improvements. Read our free guide for more details.

Mistakes to avoid

  • Not making it clear for referred users. Don’t make it challenging for new people to understand your point system. Make it clear to them before they sign up. Keep it clear.
  • Not defining credit value in terms of money. Define credit/point in terms of its dollar value so customers can make sense of it.

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READ MORE ON THE TOPIC

> How To Choose Your Referral Program Incentives (With 20+ Real Examples!)

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

Research evidence

A Nielsen Harris Poll conducted for Ambassador found that 88% of Americans say that they would like to receive some kind of reward for sharing a product or recommending it on the social network. The reward, according to respondents, could be money, points, early access, or something else, but it has to be there.

88%

88% of Americans say that they would like to receive some kind of reward for sharing a product or recommending it on the social network

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May 12, 2019

Provide Two-Way Benefits

5. Referrals  >  Provide Two-Way Benefits

Provide two-way benefits in your referral program to reduce SaaS churn

Offer reward to both referral and referrer. This will motivate your current customers to invite several new people. Referrals will complete the signup and will follow program guidelines to get reward quickly.

● PERSUASION

Evernote

EquityFeed

LastPass

How to use the technique

  • Choose an appropriate reward. Discount on upgrade, percentage off, gift voucher, or anything else. Link it to your customer needs. Get feedback from customers and ask what type of reward will excite them. Grab our free churn optimization framework for more details.
  • Decide when to disperse reward. Giving it too early (or immediately) will increase churn. Your customers will exploit your program for fake referrals. Decide with caution.
  • Make it easy-to-achieve. The reward needs to be challenging yet achievable. Don’t make it too hard to achieve. Don’t delay it.
  • Link reward to actions. For instance, when a referral completes a task or converts to a paid plan. This might reduce conversions but it will boost engagement and will reduce churn in the long-run.
  • Communicate it. What reward two parties will get, how they will get it, and when it will be dispersed need to be clearly communicated.
  • Tweak and analyze rewards. If it isn’t motivating customers to take action, change it. Track performance of different two-way rewards for conversion optimization. Get free access to our PDF for step-by-step instructions.

Mistakes to avoid

  • Make them earn the reward. It’s a big mistake that you should avoid. Don’t send rewards unless you’re sure that the referral will stick and won’t churn.
  • Unclear referral program description. This is one reason why your referral program will fail to deliver. Set expectations without hype. State all terms on the landing page to avoid ambiguities.

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READ MORE ON THE TOPIC

> How To Choose Your Referral Program Incentives (With 20+ Real Examples!)

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

Research evidence

Bressan and Crippa published a research paper on the role of dopamine in reward and pleasure. They found that dopamine is released when humans expect a reward which then motivates them to take action to get the reward. This is what exactly you should do with your referral program: Offer reward to both the parties for motivation.

Dope

Dopamine is released when humans expect a reward which then motivates them to take action to get the reward.

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May 12, 2019

Referral Program Landing

5. Referrals  >  Set A Referral Program Landing Page

Set a referral program landing page to reduce SaaS churn

Highlight and promote your referral program and its benefits on a dedicated landing page. Show visitors what’s in it for them and why they should promote it to their friends. Focus on your app’s benefits with an emotional appeal.

●● INTUITIVENESS

Fiverr

Fiverr has a perfectly designed landing page that clearly explains everything to the customers.

LastPass

LastPass has a simple referral landing page that explains the benefits of the program in one line.

GetResponse

GetResponse has a very detailed referral landing page that shares benefits, steps, and has FAQs.

How to use the technique

  • Create multiple landing pages for better targeting. Create at least one referral landing page for each buyer persona for personalization. Grab our free churn optimization framework for more details. 
  • Explain the benefits of the referral program. Use bullets. Have a clear and catchy headline. Use power words and emotional appeal (e.g. your friend is waiting for you).
  • Explain the benefits of inviting friends. What is the reward? How they can benefit from it? Sharing benefits of referral program only won’t help. Pre-sell your app too.
  • Keep form short. Make sign up easy. Reduce form fields. This will increase conversions and reduce churn.
  • Make link sharing easier. If someone decides to enroll, make referral link available immediately. If your customers visit the landing page, make links visible upfront.
  • Make CTA prominent. Add a clear and contrasting CTA on the landing page. Keep CTA text descriptive. Show customers what they need to do to get access to the program.
  • Make landing page visually pleasing. Remove navigation. Reduce friction. Add white space. Use images and videos.
  • Split test for conversion optimization. Creating a perfect landing page needs several tweaks and A/B tests. Test all the variables on the landing pages to boost conversions. Not sure how to do it? Get our free actionable guide.

Mistakes to avoid

  • Not adding form above the fold. Utilize above the fold. Show signup form above the fold so that interested customers can sign up right away without having to scroll.
  • Lack of personalization. Creating a general all-purpose landing page is a lethal mistake. Personalize landing page and make it relevant to your customers.

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READ MORE ON THE TOPIC

> 5 Must Haves For Mastering Your Referral Program Landing Page

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

Research evidence

Marketing Benchmarks From 7,000 Businesses report by HubSpot found that the number of landing pages is positively associated with the number of leads a business generates. More landing pages mean more leads. Companies with 6-10 landing pages generate 55% more leads than companies having 1-5 landing pages.

55%

Companies with 6-10 landing pages generate 55% more leads than companies having 1-5 landing pages.

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May 12, 2019

Easy Referral Links Sharing

5. Referrals  >  Easy Referral Links Shharing

Make referral link sharing easy to reduce SaaS churn

Make it easier for customers to share their referral link. Making it convenient will reduce drop-offs and will increase the number of referrals. It should be a one-click procedure.

●● INTUITIVENESS

Althea

Althea offers multiple sharing options to its customers with simple and quick UX.

LogoUp

LogoUp shows the number of steps involved in the referral program and allows customers to send emails directly to friends.

Hired

Hired offers its customers multiple sharing options.

How to use the technique

  • Add relevant sharing options e.g. social media, email, copy-paste, etc. It is best to offer all available sharing options to all the customers irrespective of their preferences. Use our glorious in-depth free churn optimization framework for further details. 
  • Make it one-click. Reduction friction. Sharing should be immediate. Don’t ask them to login via a social account or connect email account for sharing. Keep it simple.
  • Keep referral code short yet meaningful. Make remembering your code easy so customers can remember and recall it easily.
  • Allow copying of the referral code. Add a copy button with the code.
  • Show a success message. When the code is share successfully or copied successfully, notify the customer. Let them know that is has been shared so they can notify their friend.
  • Reduce the number of steps. Reduce friction. Keep it dead-short. A one-step sharing option works best for engagement.
  • Show progress bar. Let customers know how many steps they need to take to share a link. Show number of steps or a progress bar, whatever works better. Use A/B testing to identify what works best. Read our free guide on actionable techniques for churn optimization.

Mistakes to avoid

  • Asking for social media integration when a customer is about to share a referral link on the social network. It’s not recommended at all. It will increase drop-offs.
  • Lack of success notification/email. Not keeping customers in the loop isn’t a good idea. Tell them when the link is shared and then keep them updated on the progress of new referrals.

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READ MORE ON THE TOPIC

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

> SaaS Referral Marketing – A Match Made in Heaven

Research evidence

A research study by Forrester revealed that a well-thought and frictionless customer user experience can increase conversions by a whopping 400%. Making it easier for customers to share a referral link can, therefore, drastically improve the performance of your referral flow.

400%

A research study by Forrester revealed that a well-thought and frictionless customer user experience can increase conversions by a whopping 400%.

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May 12, 2019

Referral Program Discovery

5. Referrals  >  Referral Program Discovery

Make referral program discoverable to reduce SaaS churn

Your referral program should be easily discoverable across multiple channels. The customers should be able to find your program and their referral link with extreme ease. Make it clearly visible.

●● INTUITIVENESS

Google_Suit

Google Suite offers multiple ways to its customers to invite friends.

Polymail

Polymail has published a blog post on its new referral program for discovery.

Sugarsync

SugarSync has a detailed FAQs page on its referral program for discovery as well as information.

How to use the technique

  • Identify discovery methods. What touchpoints you'll use? What is the preferred method of your customers? What buyer persona is more active on the social network? Refer to personas and customer behavior. Don’t panic, we have created a free churn optimization framework for you. Grab it now. 
  • Offer multiple discovery points. Use in-app messages. Send emails. Create a web page for the referral program. Share on social media. Introduce it to your most active customers over the phone.
  • Add a CTA whenever you share your referral program. Make it clear, descriptive, action-driven, and prominent. Tell customers what to do and what to expect next.
  • Communicate the benefits of the referral program. What’s in it for your customers? Is it just about the reward? Answer their questions. Focus on mutual benefits that they will enjoy.
  • Make the reward visible. What your customers will receive (this will reduce churn and boost engagement) and what the referral will receive (to motivate new users).
  • Send reminders to customers who have invited at least one referral. Use their potential. Send emails to encourage them to invite more people.
  • Track performance of different channels. Does social sharing outperform email? What do your customers prefer? What’s the channel that contributes maximum to the referral program? Use data for improvement. This free guide has got you covered. 

Mistakes to avoid

  • Not reaching out to customers who haven’t used your referral program. It’s highly likely that they don’t know about it yet. Reach out and let them know about your program.
  • Program details aren’t clear. Your customers don’t know what they're supposed to do and why they should do it. Make what, why, how, and where of your referral program absolutely clear.

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READ MORE ON THE TOPIC

> SaaS Referral Marketing – A Match Made in Heaven

> 5 Highly Effective Referral Program Ideas to Generate SaaS Leads

Research evidence

Hoyer and Brown published an article in the Journal of Consumer Research found that awareness is significantly positively related to consumer decision making. A brand that’s known is more likely to be chosen by a consumer over an unknown brand. The same technique applies to the discovery of the referral program. A known program is more likely to be shared as compared to a program that’s not visible.

Show

Awareness is significantly positively related to consumer decision making.A known program is more likely to be shared as compared to a program that’s not visible.

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May 12, 2019

Target Right Audience

5. Referrals  >  Target Right Audience

Target right audience for your referral campaign to reduce SaaS churn

Targeting people who are most likely to convert to a paid plan and helping them in achieving their Aha moment with your app will reduce churn to a great extent. Ensure your customer bring the right people on board.

●●● FUNCTIONALITY

Evernote

Evernote let’s referral know upfront what Evernote is so they only accept if they see a mutual fit.

Shoeboxed

Shoeboxed clearly tells its customers what type of people they should invite (those who need to get organized and digitize their documents).

Typeform

Typeform tells its customers how exactly they can invite and save 100%. They tell customers what actions referrals should take.

How to use the technique

  • Analysis of existing customers will reveal the most appropriate buyer persona for your app with the highest CLV. Analyze the behavior of your most engaged users. What actions they take. Read our free churn optimization framework for more details.
  • Identify the audience type you wish to target based on data. Forget everything and use data you have to figure out what type of customers you wish to have. The right audience will engage, won’t churn, and will convert to loyal customers.
  • Share details with customers. Tell them what type of people they should invite. Send them emails. Create a referral program page. Clearly identify a few basic characteristics of the type of people they should invite.
  • Identify appropriate users early. Analyze referrals carefully. Identify users that are more likely to convert (based on data you have). Focus on them. Get in touch with them. Help them achieve success with your app early.
  • Use retargeting to bring back the right audience. Don’t lose them. Match in-app actions and behavior of new referrals to your most loyal customers. Retarget best referrals so they don’t lose interest in your app.
  • Constant data analysis is key. Any change in your existing customers’ behavior should reflect in your referral program. Tweak referral audience accordingly. Monitor the success and performance of the referral program. This our free guide is your best resource. 

Mistakes to avoid

  • Not linking targeting audience to an existing buyer persona. Don’t reinvent the wheel. You already have customers and their data. Pick referral audience from existing data.
  • Not sharing details with your customers. This is a big mistake. Tell your customers what you want them to do, what type of people they should invite, and what are the ideal users of your app. Share these details with your customers.

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READ MORE ON THE TOPIC

> How to Set Up a Referral Marketing Program For Any Industry (With Industry Examples)

> 5 Quick Tips to Building a Customer Referral Program

Research evidence

According to Friendbuy, the optimal sharing rate of the referral link is 15%. However, some customers go the extra mile and the best rate you can expect is 50%. The best conversion rate is 15% which means only 15% of referrals will convert by opting for the free trial. This conversion rate can be significantly improved if your referrals are highly relevant.

15%

Only 15% of referrals will convert by opting for the free trial. This conversion rate can be significantly improved if your referrals are highly relevant.

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May 7, 2019

Track Referral Campaign

5. Referrals  >  Track Referral Campaign

Track referral campaign to reduce SaaS churn

Creating a referral program isn’t enough rather you need to track performance regularly. Identify the right success metrics consistent with your program’s goals. Track engagement of existing customers and referrals, and take necessary improvement actions.

●●● FUNCTIONALITY

Typeform

Typeform has an amazing referral program that gives 10% reward to both the customer and the referral.

Lenscart

Lenskart got more than a million customers through its referral program in as low as 2 months.

Shopclues

Shopclues increased its app downloads with its referral program.

How to use the technique

  • Identify the right metrics to measure success. Look at the goals of your referral program for metric identification. Are you trying to increase sales, revenue, leads, or something else? Not sure how to do it? Grab our free churn optimization framework for more details.
  • Set tracking to track events and actions. Track referral links. Intimate customers on the progress of their referrals.
  • Generate daily, weekly, and monthly reports. This is crucial. Daily and weekly reporting help you identify bugs and loopholes on time. Constantly monitor your referral program to fix issues before they convert to massive challenges.
  • Compare reports with industry benchmarks and your previous reports. Do improvements increased referrals? If yes, at what percentage? Compare last year’s churn rate with the current year’s.
  • Identify success. Again it has to be linked to your company’s and referral program’s objectives. Do you really consider the numbers as successful? Is it really a long-term success?
  • Tweak and improve referral program. Measuring success won’t help much if you won’t take the necessary actions for improvement. Track, measure, tweak, and improve. Get our free guide on tracking and tweaking.

Mistakes to avoid

  • Hesitating to change referral program goals. Don’t hesitate to change the goals if it isn’t working. It’s better to change your referral program instead of shutting it down permanently.
  • Not quantifying metrics. It’s challenging to quantify metrics like engagement and brand awareness. However, you have to do it for measurement, tracking, and decision-making. It is necessary to track all the metrics.

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READ MORE ON THE TOPIC

> How to set-up a referral program for any industry

> How to Build a Customer Referral Program

> 7 Steps to Launch: How to Run Your First Referral Program

> 5 Quick Tips to Building a Customer Referral Program

> How To Set-Up Data-Drive Referral Marketing Campaign Goals

> SaaS Referral Marketing – A Match Made in Heaven

Research evidence

The Advocate Marketing Playbook by Influitive found that leads generated by referral programs are 4-10x more valuable than other lead types. It was suggested in the report to measuring metrics for program success to ensure your referral program is doing well.

10x

Leads generated by referral programs are 4-10x more valuable than other lead types.

Related techniques SEE ALL THE TECHNIQUES >

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