4. Long Term Retention  >  Set Your Referral Goals

Set your referral goals to reduce SaaS churn

Setting clear goals for your referral program is essential. Goals make the destination and path to destination clear. You’d know what you have to do, how you have to do it, and what outcomes to expect.

●● FUNCTIONALITY

Acorns

Acorns has a simple referral program that gives customers $5 for inviting a friend.

Box

Box has a fairly sophisticated referral program for its users.

Zoho

Zoho has a clear and attractive referral program with for its corporate users.

How to use the technique

  • Get feedback from customers and users. Conduct surveys and interviews. Refer to personas and see how likely your existing customers will refer your app to a friend if they like it. Do they refer at all? Is there a persona that’s more likely to participate in the referral program? You can get our free churn optimization framework for actionable insights. 
  • Talk to marketing and sales teams to understand metrics, existing referrals, and how your business can best benefit from a referral program. Do you have to focus on reducing churn? Or, the focus should be on customer acquisition?
  • Set realistic goals based on data. The goal should be challenging yet achievable. Link it to your business strategy. Communicate it to all the teams.
  • Allocate budget. Choose a percentage of revenue. Take your marketing and finance team onboard for budget allocation.
  • Identify appropriate metrics to measure success of your referral program. These metrics should be linked to the program’s goals.
  • Develop a team that will create, execute, and manage the referral program. Train your team, provide them with resources (tools), and assign challenging tasks to the entire team.
  • Monitor and improve referral program. Monitoring and improving will get easier if you know what the program is all about and what metrics you should use to measure performance. This free guide has all the information you need.

Mistakes to avoid

  • Setting goals that aren’t SMART. A SMART goal is specific, measurable, achievable, relevant, and time-bound. Not having SMART goals will create issues at a later stage. Better do it now.
  • Not getting feedback from internal and external customers. It should be based on data and facts. Don’t create it in isolation.

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Research evidence

Latham and Locke published an article in European Psychologist journal where they discussed the benefits of goal setting theory on different variables. The finding revealed that setting goals improves performance and helps in achieving complex tasks. When clear goals are set, it gets easier for businesses to achieve objectives even if they're challenging and complex.

Goal

Setting SMART goals improves performance and helps in achieving complex tasks.


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Implement with our proven SaaS Churn Optimization Framework

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