Should You Start with Referrals or Affiliates First?
Most SaaS companies should start with a referral program first because it leverages existing customers at low cost, while affiliate programs work best after product-market fit for external scale. The right choice depends on your stage, ICP clarity, and resources.
Why Start with Referrals First?
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Low barrier to entry: Simple to set up in-app, no complex partner management required.
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Customer-driven growth: Referrals come from happy users who already trust your product.
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Early validation: Helps confirm ICP and messaging before recruiting external affiliates.
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Cost efficiency: Rewards (credits, discounts, perks) are often cheaper than cash commissions.
👉 See also: What Is an In-App Referral Program?
When Affiliates Make Sense First
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You already have an established brand: If people know your product and affiliates are ready to promote.
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Strong marketing assets exist: Landing pages, sales collateral, and clear ICP targeting.
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You need fast reach into new markets: Affiliates can expose you to audiences you don’t have direct access to.
👉 See also: What Is a SaaS Affiliate Program?
Framework: Choosing Referrals vs Affiliates
|
Factor |
Referrals First |
Affiliates First |
|---|---|---|
|
Stage |
Early stage SaaS |
Growth or post-PMF SaaS |
|
Audience source |
Existing customers |
External partners (bloggers, agencies) |
|
Reward model |
Credits, discounts, perks |
Cash commissions (recurring or one-time) |
|
Management overhead |
Low |
Higher – requires program ops |
|
Primary benefit |
Trust-based conversions |
Expanded reach & scale |
Best Practice: Run Both, Sequentially
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Start with referrals at early stage to drive word-of-mouth.
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Layer in affiliates after hitting ~$10k–$20k MRR and achieving PMF.
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Combine both for sustainable, diversified acquisition: customers drive virality, affiliates drive scale.
FAQ – Referrals or Affiliates First
Q: Can I launch affiliates before referrals?
A: Possible, but risky if ICP isn’t clear—affiliates may waste effort and lose trust.
Q: When should I add affiliates?
A: Once churn is low, positioning is clear, and you have resources to support partners.
Q: Do referrals still matter once affiliates are live?
A: Yes—referrals remain a cheap, high-trust growth engine even at scale.
Q: Can both programs run in parallel?
A: Absolutely—just set clear attribution rules to avoid double-paying.