The hidden gem for rapidly scaling your business are referrals. Every growth hacker in the SaaS community knows that exponential growth is only possible if you can get your client to refer you to a potential new client. However, asking for a referral can be awkward and might feel pushy or, worse, 'salesy'...
Although not everyone is keen on asking their clients if they can help to expand their network, we really believe you should start valuing the power of referrals. In this guide, we go into detail of what makes a good refer-a-friend campaign to help you kickstart your own!
The basics of refer-a-friend
A refer-a-friend has 3 crucial parts: the user, the offer and the incentive. Balancing up these three parts, you can outline a successful strategy. Try it out by starting small and if the three basics are in perfect harmony, you can scale your campaign.
PART 1: THE USERS
A SaaS company, like any other company, is nothing without its user. You want happy users who are glad to refer you without a second thought. In order to achieve that, you need to listen to your users. Ask feedback and go to work with it! Find out what they like, what their needs and wants are. Your users are the key to improve your service and satisfied customers are the best ambassadors for your brand. Later, you will need that group of supporters to get traction for you campaign.
PART 2: THE OFFER
It’s important that your communication and USP (unique selling proposition) are clear. The moment your ambassadors start sending out your refer-a-friend campaign, someone receiving the offer should be able to understand what your business is about. You have only one shot to convince them of your SaaS solution, so make it count. Have a clear selling point that converts easily to day-to-day life.
PART 3: THE INCENTIVES
How do you get people to take part in your campaign? Of course, you have already contact all your friends and actively promoted your business on every possible social media platform, but for your clients, it's not obvious as to why they should help your business to achieve anything. That's why you need to give your ambassadors a reason (incentive) to promote your company. Here's how a lot of companies do this:
- 10% off your next subscription
- 1 month of free access
- Free account upgrade
- 100 Sexycoins to spend in the app
All of these are incentives are perfectly ok to stimulate your users. There is only one problem. These incentives, like the service you provide, aren’t physically tangible. The initial effect of gratitude might quickly fade away because well... what do your clients really have to show for their ambassadorship?
The missing ingredient
Your refer-a-friend campaign fails because you lack a tangible incentive. Your users receive digital gifts they can only use and spend in your SaaS solution, making them nothing more than users. What your brand really needs, are ambassadors. Ambassadors are already clients, they use your solution and spend money there, but they are also willing to openly come out as clients. They share the values of the company and are proud to use your products. The incentive of free digital content just isn’t strong enough to convince them to push your brand to their connections.
What is your campaign missing?
Your refer-a-friend campaign needs a real life gift people can touch, hold and wear. Your long-time clients and supporters will want to wear your colors and show the world their affiliation with you, on the condition that you can give them qualitative and beautiful merchandise. You need to give them some exclusive company wear. That way your SaaS company crosses the border from digital to the real world, where the offline advertising will be worth its weight in gold. Branded apparel, when done right, is the best way to get people talking about your business.
The best strategy to use merchandise for refer-a-friend campaigns
To make your campaign a success, you will need the following:
- Awesome premium company swag: read this article for a complete guide
- Exclusive stuff for referrers: merch they can only earn if they refer you to a potential new client
- A reliable, full service scalable partner that handles all production, warehousing & logistics
This way you have all the triggers to motivate your users to become true brand ambassadors and start spreading your SaaS solution. Exponential growth: here we come!
It’s all in the numbers: calculating ROI
Of course, you don't want to just jump head first into this. Like everything in business, it boils down to the numbers. Using his formula, you can calculate the ROI on your refer-a-friend merchandise campaign.
Refered users* conversion % * average lifetime value
————————————————————————– = ROI per pack %
Total cost merch pack
Let us illustrate this using an example. Say you launch a winter campaign. Clients who refer you to five other people, get an exclusive Christmas jumper. The average lifetime value of your clients is $750. The chance of a referred user converting to a full user is 60%. Complete cost of a Christmas jumper is for example $ 35 + $15 logistic fee = $50
5 * 60% * $750
——————–= 4500% ROI
How to start
Our team is specialized in complete projects like a refer-a-friend campaign. We help our clients with designing company swag, producing it ethically & ecologically and assist them in a complete logistic solution. You are a software-as-a-service company, we are a merchandise-as-a-service company. We’re here to help you get results you want through merchandise. We are as involved as you like, ranging from the production of some caps to the planning of a full on marketing campaign. Let us know what we can do for you. We're glad to help.