Referrals are a well-documented form of user acquisition. They lead to higher conversion rates and higher lifetime values than any other acquisition channel. And yet, many companies aren’t leveraging the power of an incentivized referral program. That is to say, many companies are getting referrals but they don’t have a formal system to track and optimize this critical channel.

When DropBox realized how much of their business was driven by referrals, they decided to build some internal software to track these referrals and incentivized their customers with an extra gigabyte of storage for every friend they referred. This simple offering increased their signups by 60%!

Most of our customers have a lot of questions about how to implement a referral program for a B2B SaaS company. In this case study, we’ll show you step by step how we worked with one of our earliest customers, Ninja Outreach, set up their customer advocacy referral marketing program. Ninja Outreach is an awesome SaaS product. They help companies manage content promotion by helping you find influencers and bloggers to reach out to. They also have an awesome workflow for managing all of your outreach efforts. (We use them all the time for posts like this one!)

Here are two key aspects of any referral program:

  • Finding the right rewards incentives
  • Make it super easy for your users to share

Find the right rewards:

The most important aspect of any referral campaign is finding rewards that will incentivize your customers to refer their friends. In our experience, the best place to start when thinking of your incentives is to look at how your customers use your product and how that aligns with your revenue model. The first thing we did when we reached out to Ninja Outreach was look at their revenue model.

Here’s a screenshot of Ninja Outreach’s pricing tiers.

ninjaoutreachpricing

Note that each tier gives you access to more users, more contacts, and some additional features. Similarly to DropBox’s model, Ninja Outreach has the opportunity to reward its users for referring their friends in a way that encourages them to use the product more! This not only leads to new customers but will also eventually grow revenue from existing customers.

To keep things simple we suggested that they give their users 500 more contacts per month for every friend that they referred. The hypothesis being that by allowing users to achieve the reward for referring just 1 friend  for 500 more contacts per month will make the reward both desirable and achievable.

Refer 1 Friend Get 500 More Contacts Per Month!

Like any marketing channel, you need to A/B test the different types of rewards and the referrals required to unlock each reward.

They could also test a multi-level rewards system. Here’s what it might look like for them.

 

Refer 1 Friend Get 500 More Contacts Per Month!

Refer 5 Friends Get 1000 More Contacts Per Month!

Refer 10 Friends Get 5000 More Contacts Per Month and 2 Additional Users!

Refer 20 Friends Get Unlimited Everything For A Year!

 

The important thing to remember here is that these rewards align well with getting their existing users to use more of their product. They also don’t really cost the company anything up front. Depending on your cost of acquisition and the lifetime value of your customers you  may also consider offering gift cards and/or cash rewards.

As you A/B test different rewards you’ll want to keep track of the referral conversion rate. The referral conversion rate is the percentage of referred visitors that convert when they get to your site. If your conversion rate is 15% or better then you’ve found some really great referral rewards and the campaign is working.

Make it super easy for your users to share.

ninjaoutreach-nav

Once you’ve decided what you want to use for rewards you’ll need to design the user experience so that your users have can easily refer friends.

First, you want to make it easy for them to find the referral program. Here we’ve added a link to Ninja Outreach’s navbar so that all of their logged in users will see the referral program.

At ActionWins we provide all our customers with a number of options for creating the referral widget that users will see when they click the “Refer A Friend” link. They can choose to just drop a snippet of JavaScript on the page where they’d like the campaign to render that will trigger a popup when the link is clicked. This popup gives each user a unique link that they can use to share on social media, via email, and/or SMS with their friends.

Here’s what it looks like on mobile for a multi-level rewards system:

 

mobilereferralwidgetfixed

 

On the other end of the spectrum, our customers can choose to use our API to build a completly custom integration. In this case, Ninja Outreach wanted to control the entire user experience and created their own widget using our API. You’ll have to sign up for their service to see it!

 

How We’re Building a Refer a Friend Feature for a B2B SaaS Business: Ninja Outreach
  • Kelly Kuhn-Wallace

    I’m a fan of the simplicity here, but it may be too simple. Do customers earn rewards for driving site visits–or customer registrations?

    • Alex Kehaya

      Hey Kelly, Customers earn rewards for driving customer registrations, not just site visits. What are you thinking of building a referral program for?