What are the most innovative lead generation companies? Originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
What Is Referral Marketing?
Referral marketingis when you entice your existing customers to reach out and refer other customers in exchange for a lovely reward. Referrals can be done through social media such as Facebook, Twitter, Instagram, through chat apps such as WhatsApp and Facebook Messenger and by email invites. Such engagement will create a warm community around your SaaS that will nurture future leads until they eventually buy from you.
I am NOT surprised that no other answer tackled referral marketing as a technique to grow a B2B. Most think that referral marketing is strictly for B2C. It’s not the case. If properly designed a B2B referral marketing campaign must target that individual responsible in a particular business to decide whether to procure your product/service.
Some Examples Of A Businesses Who Grew Through Referrals…
What do they do?
Hotjar is a tool that helps you to understand how your website visitors are interacting with your website.
Referral program strategy
David Darmnanin, CEO of HotJar spelt out the way how Hotjar acquired so many users. So prior to launching an MVP (minimum viable product) Hotjar created a landing page through which they explained what Hotjar will be all about. They asked visitors to sign-up for early exclusive access to the tool. Once again they used FOMO (fear of missing out) as a strategy. Once a visitor signed up, they were sent to a waiting list. Whilst waiting subscribers were asked to refer their friends and it so how Hotjar built a list of 60,000 emails prior to launching.
Once Hotjar launched, as from day one, they had their own referral system developed and integrated into their SaaS. This made it easy for Hotjar users to invite their friends in exchange for a reward. It was so successful that Hotjar kept doing and still are till this very day.
How many referrals does Hotjar get every month? Go check out for yourself as Hotjar are transparent about how many referrals are getting for any month. For the month of September 2018, up till the 24th, Hotjar’s referral system has generated over 694 sign-ups.
What do they do?
An app that helps you to invest in stocks, ETFs, options, and cryptocurrencies, all commission-free,
Referral program strategy
In just one year prior to launching the RobinHood app, they managed to build a waiting list that had almost 1,000,000 emails! One of the main drivers behind the RobinHood referral marketing huge success was FOMO (fear of missing out). RobinHood had their waiting list in INVITE only mode so most visitors simply signed up in order to make sure they reserve a spot to this exclusive/upcoming trading app.
What we really like about the Robinhood style is that they kept their messaging and even their sign-up process as simple as it can be. No first name, last name, just an email address. Straight after sign-up you will get your position in the queue and different options how you can improve it. Such strategy fueled sharing so much that position Robinhood in front of such a huge audience that made them a success prior to launching.
What do they do?
The company that helps you building conversational forms, surveys, quizzes and landing pages.
Referral program strategy
Typeform’s refer-a-friend program offers a 10% double-sided reward targeted at their PRO customers only. Basically, it requires 10 paying customers to get you a FREE PRO account forever!
This reward strategy is very focused. First of all, it is exclusive to only PRO account users. So only committed customers are given the exclusive opportunity to spread the word about TypeForm and get something back. Whilst we really try as much as possible to make referral campaigns look exclusive, we don’t necessarily agree with this kind of exclusivity as it drastically lowered down the chance of FREE users having the chance to spread the word about TypeForm. On the other hand, there must have been a really good reason why TypeForm closed down their access to PRO accounts only.
What we really like, is that rewards are stackable and directly proportional to the effort by the referrer. So if a referrer shares a referral link and gets 5 referrals, he will get a 50% discount month on month. Such reward stacking must have helped TypeForm to not only acquire new customers but also to drastically lower their churn rate for PRO accounts.
Strategies You Can Use to Promote Your Referral Program
Strategy #1: Reward Stacking to help in customer acquisition and retention
The main purpose of any referral marketing campaign is to acquire new users/customers. But if played well, a referral strategy can help in both acquiring and also retaining existing users.
These rewards were attractive enough to make Dropbox go viral. But that was not the only benefit Dropbox got out of it. Owning an upgraded Dropbox account, with plenty of bonus storage space for referring several users to Dropbox, offers plenty of reasons why one will stay using Dropbox and will not switch to a competing service.
When designing a referral marketing campaign, make sure that the rewards you give out are stackable. Stacking rewards will keep making it attractive to refer more and more friends but will also help in drastically reducing churn, building a resilient user base that will not switch to a competing service that might come along in the future.
Strategy #2: Invite your past users, especially in-active ones
Give them a reason to return. The fact that in the past they used your service means that they saw value in what you are offering. The fact that they are not paying customers any more does not mean they cannot value the potential that you are offering, but it might be they need a touch base, a gentle and subtle reminder about your service.
Your referral campaign can be a quick touch base to invite them back to your SaaS, telling them about new developments whilst they have been away and lure them into becoming active by referring their friends in exchange for a reward. Your past users are a good start to get your referral marketing campaign cranking.
Strategy #3: Referrals integrated within your sales funnel
Having a logged in area offers a huge opportunity to pitch your referral program at different stages in the customer lifecycle. Think of how SaaS like Hotjar and Dropbox integrated their referral campaign within their onboarding or else as a feature into their SaaS.
By adding a prominent CTA (Click Through Action), clearly visible from most screens, will highly increase your chances of getting your SaaS users interested in your referral campaign. Alternatively, you can also pitch your referral program to your SaaS users at different stages such as:
- Onboarding: by inviting your newly acquired SaaS user to invite their friends in exchange for a reward
- When hitting a limit: offer refer a friend as a means of extending their trial or increasing their freemium limit.
Deeply integrating your referral marketing campaign into your SaaS will drastically increase your conversions. SaaS such as Dropbox gave so much prominence to referrals that when hitting a storage limit, they ask to either upgrade or else refer a friend.
What to Keep In Mind When Creating A Referral Program?
When creating a referral marketing campaign, the following are 7 checks you have to do in order to make sure your campaign is successful.
Integrated into your user flow:
Make sure your referral marketing campaign is tightly integrated into your SaaS. Don’t just implement a referral marketing campaign which requires your users to sign up again for it. Automatically generate a unique referral link and clearly show it to your users. Any successful referral marketing campaign was tightly integrated and tied in meaningful milestones to a reward. Eg. new sign-up or new sign-up and achieve a certain level in their profile, or newly paid sign-up.
Right after the AHA:
Do not just bombard all users to get your referrals. It won’t work and you will annoy genuine people who might just want to become your customers. Ask for referrals only after your users have experienced the AHA moment. At that point, your users would have experienced the value of your SaaS. From that point onwards, it is the right time to ask for referrals
Brandability / Seamless flow:
Do not go for platforms that do not allow you to totally brand your referral campaign. Make sure you can brand your emails, your pages and make sure emails go out from your domain. Platforms that enforce Powered by links or any kind of promotion to their platform, OR do not allow you to fully customize your campaign according to your needs should be out your sight.
Offer attractive rewards / stackable rewards:
Let your referrers stack rewards. Make them post their referral links everywhere and chase their referrals to join your SaaS so as to get more rewards/benefits. Your referrers should be rewarded in direct proportion to how much referrals they get – at least up to a certain limit.
Tie in rewards to an account – non-transferable:
Once a referrer achieves a certain status in your SaaS, eg stacked several rewards, make sure you don’t allow them to transfer them to another account. Also, make sure you tight in those rewards to that paid account. Closing that particular account should automatically disqualify them from benefiting from the rewards. Such a clause will cut your churn (on referrer accounts) by at least x4. Why? As no one would like to let go of an upgraded account
Don’t be afraid to ask for referrals – Ask often:
Most customers we consult for are almost afraid of asking for referrals. Keep in mind that happy customers are happy to share a good working SaaS. They will feel smart when referring a good working solution to their friends & colleagues. And heyyy, keep in mind they are getting rewarded for it.
Double-Sided – Reward both referral and referrer:
If you want to make it easier for your referrers to share your SaaS and if you want conversions to skyrocket, make sure you make it interesting for both referrers and referrals.