In the world of SaaS, choosing the right customer acquisition strategy can be challenging, but referral marketing has proven to be one of the most effective. Let’s dive right in.

Choose attractive rewards aligned with your product and budget. These can be cash credits, discounts, fee waivers, or free upgrades. Non-cash incentives are often more effective.

Here are a few referral program ideas:

• Cash credits (eg $50 to offset next bill when a friend signs up)

• % discount (eg 20% off your next bill)

• Fee waiver (eg next month’s subscription waved)

• Upgrade (eg free upgrade to a premium plan)

Ensure the referral process is easy to understand and access. Clearly outline the incentives and steps involved.

You can implement your program in-house or use tools like Viral Loops, Growsurf, or ReferralHero. These tools offer templates and integrations to streamline the process.

Building this in-house can be done in a few ways, depending on how complicated you want your system to become.

• Generating a unique referral code for each user upon account creation or request.

• Storing this referral code in the database alongside the user's information.

• Providing functionality for users to share their referral code.

• Tracking when new users sign up using a referral code.

• Rewarding the referring user based on your referral program rules. i.e. Implement some sort of AfterRegistration or OnPaymentSuccess hooks to do whatever your referral program is meant to do.

(There are many ways to go about this).

Don't just set up a landing page and forget about it. Promote your program through various channels:

• Edit your existing drip campaign to promote your referral program

• Send in-app messages to your customers

• Get your support reps to bring up your referral program (after they’ve successfully resolved a user’s problem)

• Promote your referral program through social media

• Link to your referral program in your email signature

• Build it into your website marketing automation

Monitor key metrics to assess your program’s performance:

• % of customers who become referrers

• Number of referrers

• Number of referrals sent

• Number of referrals sent per referrer

• Click through rate (for referrals sent)

• Conversions (number of customers who sign up via referral)

• % conversions (% of customers who sign up via referral)

When asking for a referral, timing is key. If you ask too early, your customer might not have gotten any value out of your product, and this means they’re unlikely to recommend it. If you ask too late, they might no longer be excited about your product; again, this reduces the chances that you’ll get a referral.

So: when’s the best time to ask for a referral? There’s no one-size-fits-all approach, so feel free to experiment and see what works best for your company. Here are a couple of options to get you started:

• After a milestone (eg after your customer has been with you for one year)

• After a certain usage threshold (eg after your customer has ran 10 campaigns or created 10 assets with your tool)

• After a customer responds positively to a survey

• After a customer leaves you a positive testimonial

Regularly analyze these metrics and adjust your program as needed. For example, A/B testing different incentives can help determine the most effective rewards.