An in-app referral program is a system built directly into a SaaS product that motivates existing users to refer new customers in exchange for rewards. It works by providing users with a unique referral link, code, or invite system that they can share with others. When a referred person signs up and meets predefined conditions (e.g., becomes a paying customer), the referrer (and sometimes the new user) receives a reward.
How a referral program works: Step by Step guide
1. Users sign up to your platform
As any other SaaS we want to keep growing our user base, in any way possible. You will have your own ways to acquire new users, beyond the referral and affiliate marketing channels.
It is important for a referral program that you have users, and your user base is growing.
2. For every user a referral link is generated
Once a new user joins you will send us the information about the user. This can be email and/or UID of the user, once we receive this we will generate an unique referral link for them. They can already see it when they click on something you added in your app;
- Refer & Earn
- A little gift Icon 🎁
- Or any other way (you can become creative).
Once people click on the button / CTA you have added, the below pop up will open up, which asks people to become your advocate.
The Opt-in has 3 functionalities; you control the data you sent to Reditus, you can see how many people actually joined the program and they need to agree to your referral program terms.
3. Users likes your product
For users to refer your product, they will need to like your product first. Once they do, make sure you notify them about your referral program. Some idea's on moment to do this;
- When they just had their WoW moment
- When they received value out of your product
- When they upgraded their account
- When they renewed their subscription
You can trigger our embed using Javascript, soon we will allow you also to show it on a simple URL link click. See here our technical documentation to show the widget.
4. Users refer your product
Users don't have to register anywhere else to copy the links and share it with their friends and network. Ways they can share their link;
- One-to-one basis
- Communities they are in
- Social media
- Newsletters they run
- Podcasts
- Blogs
- Or anywhere else your ICP is.
5. Referral receives a benefit
When someone signs up via the referrer you can give the person a benefit. Think about; extra credits, extra trial, discount or anything else.
You will be able to set the reward yourself, it should be something for people to sign up to your product.
6. User moves to paid
When people signed up, they will come into your normal onboarding flow & some of them will convert into paid clients. For people who got referred to your product, the conversion rate is often higher (as the also receive the benefit; discount e.g).
When the users moves to paid; you will receive a payment (monthly / annual).
7. Referrer receives a commission
As a referral program is often a double sided incentive, the person would receive something as well. Money is the best motivation for people to recommend you, think about a flat fee or a recurring commission (similar to affiliate program).
Once this cycle is done, it can repeat itself again; making it a perfect Growth Loop.
Implement the in-app referral program, full guide.
You can setup an in-app referral program for FREE using Reditus. See pricing here.
Why SaaS Companies Use Referral Programs
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Low CAC: You only reward users when referrals convert.
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High trust: Recommendations come from satisfied customers, making referrals more likely to convert.
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Scalable: Every new customer has the potential to bring in more users.
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Built-in virality: Referral loops create organic, compounding growth.
In-App Referral Programs vs Affiliate Programs
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Referral Program: Promoted by existing customers; rewards are often discounts, credits, or perks.
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Affiliate Program: Promoted by external partners (bloggers, agencies, influencers); rewards are typically commissions.
👉 See also: SaaS Affiliate vs Referral Program (Key Differences)
Best Practices for Running an In-App Referral Program
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Choose the right reward: SaaS credits, discounts, or feature unlocks often work better than cash.
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Prompt at the right time: Trigger referral invites after a user has achieved value (e.g., completed onboarding, hit a milestone).
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Make sharing effortless: Provide copy-and-paste referral links, one-click email invites, or in-app widgets.
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Track and optimize: Measure referral rate, conversion rate, and overall revenue impact.
Examples of In-App Referral Programs
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A project management SaaS offering $10 credit to both referrer and referee.
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A B2B SaaS tool giving users 1 free month for every successful referral.
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A SaaS productivity platform unlocking premium features after 3 successful referrals
FAQ – In-App Referral Programs
Q: Are referral rewards always monetary?
A: No. Many SaaS companies use credits, discounts, or perks that keep users engaged.
Q: When should a SaaS launch a referral program?
A: As early as possible once you have paying customers—it’s ideal for early-stage growth.
Q: Can you run referrals and affiliates at the same time?
A: Yes. Referrals leverage existing users, while affiliates expand reach externally.
Q: How do I prevent referral abuse?
A: Use unique codes, set reward limits, and monitor suspicious activity.
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