Learn the basics about a referral program, and how it would work with your SaaS.
What is an in-app referral program, and how does it work?
An in-app referral program is a system built directly into a SaaS product that encourages 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
When working with a referral program you will be pushing user data to Reditus about existing & new users to your platform. We do not receive any personal information, you can send us the User ID.
2. For every user a referral link is generated
For the user ID's you sent us we will generate unique links per user. You can show them the link by embedding our widget into your SaaS app. Every user can already see their link.
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
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.