Growth Hacking, Retention, Acquisition, Conversion: Growthmint

Day 19: Referral

One of the beenfits of happy customers is that they recommend you to their friends. This is called referral and it's powerful because it happens without much effort on your part. Referred customers also tend to be high quality.

Referrals occur all over the place, even offline - a lot of the action happens disconnected from your analytics. This makes them the hardest part of SaaS growth to track.

Pro Tip

Referral codes allow you to more accurately measure the referrals your customers are providing.

Pro Tip

The amount of referrals you'll see depends on the amount of customers you have, so it has an inverse relationship with how much your product costs.

Referral programs

Referrals will happen without you putting a formal process in place. You can see a lot more, though, when you put in the work to build and optimize your referral funnel.

Depending on your product, referral could be a natural part of usage. If that’s the case, make sure to streamline this process and make it as easy as possible.

Example

Dropbox’s program where both the original customer and their friend receive additional storage is a famous referral program example and something to learn from.

Pro Tip

The best referrals happen after a customer has had a long term positive experience. Figure out where these moments happen in your product funnels and place your call-to-actions there.

Pro Tip

Use rewards to drive referrals from customers.

Single and double sided referral

In a standard referral program, the referrer benefits while the person being referred does not. They’re one-sided.

While one-sided programs are common, your customers may feel greedy or dishonest being the only person to benefit.

This is why I prefer double-sided referral programs. Both parties benefit, so there’s less selling involved and you take away the discomfort many people feel when benefiting from their friends.