How to Do a Referral Marketing Campaign for Software Downloads

SaaS markets are growing competitive by the day. Building a high-tech product might give you an edge but it doesn’t mean you can flip it into a profitable business.

When vying for a customer pool that’s already inundated by other options, technological prowess alone won’t suffice. You need a dynamic marketing plan to kick off software downloads.

Marketers usually employ quick growth efforts like paid media adverts and influencer shoutouts to turn heads. Although they do land a good first impression, and provide quick wins the output eventually hits the ceiling before you can build a steady stream of new customers.

SaaS companies must harness the support of their customers to build repeatable and scalable sales strategies. Referral programs leverage the power of word of mouth—incentivizing existing customers or potential leads to spread the word about the software and compel others to download.

Backed by impressive statistics, referral marketing holds the key to remarkable growth. The article shares a 6-step process to run a refer-a-friend campaign for software downloads.

Why Set Up a SaaS Referral Program?

The trust in media ads and sponsorships is gradually fading out. Today, people are keener to believe what their friends have to say about a brand or its products than a random social advertisement.

A genuine recommendation from someone you know or trust is more likely to influence your purchase decision. Suggestions from your near and dear are 50 times more likely to trigger a new purchase than an ordinary celebrity promotion.

Especially for SaaS businesses, a trusted referral is often the backbone of a lasting client-business relationship. Besides referring friends and propelling new leads your way, introducing a referral program can bring the following benefits:

Lower Customer Acquisition Costs

Referral programs operate on a pay-for-performance basis—you only pay for the new referral when an existing customer shares a lead or customer your way. The strategy posits 3.63% B2B conversion rates, reducing your acquisition costs significantly.

Generate High-Value Leads

People who channel into your software via trusted referrals will be more likely to convert and share referrals with others. Since they have a better understanding of your product, these are the leads who tend to stick longer with a brand. Referral leads are rated higher by over 78% of B2B marketers, emphasizing the quality and trust associated with these leads.

Improve Customer Loyalty

For a subscription-based SaaS business, recurring revenue from existing customers is essential to grow your business. According to Brian & Company, increasing customer retention rates by just 5% can boost profits by 25% to 95%, marking a significant upswing in revenue.

6 Steps to Creating a Referral Program for Software Downloads

Whether it's increasing software downloads, expanding your user base, or boosting engagement, the underlying principles of a referral program are the same.

All it takes is a game-changing product or service, attractive rewards that suit your audience, and a seamless sharing process to propel your business forward. Here is a complete breakdown of a SaaS referral marketing program:

Build Value: Give Your Customers a Reason to Share

To get your customers talking about your SaaS product in their social networks, you need to stand out. Good referral rewards do lure in new leads but if your service doesn’t stand true to the mark, they’re likely to bounce off to your competitors.

Regardless of the reward, customers won’t refer to your product unless they truly love it. Make sure you know what they think about your brand before bringing them a proposal.

Scour through online reviews, ask for feedback, and carry out an NPS survey to assess customer’s inclination on-brand. See to it, if there are any obvious pain points or areas that need improvement.

Develop Your SaaS Referral Program Strategy

Every word-of-mouth strategy is steered by incentives, but the way you present them makes all the difference. While there is nothing inherently wrong with the classic refer a friend campaign, you need to assess some other models before marching on.

One-Sided Referral Strategy

Only the referrer receives incentives for bringing in new customers, whereas, the new customer doesn't receive any special reward. While it can be cost-effective, the lack of incentives for the new customer might limit the program's appeal.

Two-Sided Referral Strategy

The model proposes rewards for both referrers and referred-in customers for participating. While it’s potentially costlier due to double-sided incentives, the higher likelihood of successful referrals and improved customer acquisition does outweigh the additional expense.

Set Attractive Rewards and Incentives

While the USPs of the software retain every incoming customer, it also takes compelling rewards to lure them on board in the first place. To get your customers to actively advocate for your brand in their social circles, you need to present some attractive incentives. Apart from gift cards and freebies, here are some incentives that work well in the SaaS industry:

• Discounts on Subscription Fees: Offer a percentage discount on the referrer's next subscription fee or provide a discount for both parties upon successful referral.
• Extended Free Trial Periods: Grant an extended free trial period for the referrer or the referred customer, allowing both parties to experience additional value from your SaaS product.
• Early Access to New Features:  Offer referrers early access to upcoming features or beta releases to create a sense of exclusivity and acknowledge the contributions of loyal users.

Advertise Your Customer Referral Program

Part of launching a referral program includes promoting it on platforms where the target audience can easily see and participate in it. That includes running email campaigns listing your referral offer, publishing social media posts, or sharing sponsored ads on prominent channels. Here are three effective ways to promote your SaaS referral program:

Email Marketing

Emails are still the most widely adopted marketing channel to send, share, and promote referrals. Create an email list of your most loyal customers and send them a pre-drafted email for driving a referral.

In-App Messaging

Implement in-app notifications or banner integrations to reach users directly within your SaaS platform. Highlight the referral program's value proposition in the mobile app and make it easy for users to access and participate.

Social Media Adverts

Social media holds an endless stream of potential customers waiting to be tapped. Make sure you create dedicated social media pages in your brand’s name and post regularly about the referral campaign as the launch date approaches.

Introduce Fluency: Make it Easy to Share

When users find it effortless to share your referral program, they are more likely to engage with it and spread the word within their networks. Don’t keep your customers waiting or scour through your website or referral email to register for the program and share it with others.

Provide users with multiple ways to promote your program including pre-drafted email templates, social media posts, and pre-populated messages. Provide participants with straightforward referral links or codes that are easy to copy and share through any medium of their choosing.

Track Performance with a Referral Software

Whether you build your referral program in-house or hire a specialized marketing firm to get it done, it falls upon you to monitor, track, and assess its performance. It’s important to keep tabs on your program to ensure you are on track with the objectives.

Figure out how many customers have joined your program out of your target audience. How many leads they referred? What’s the main channel used for sharing? To track analytics, analyze possible bottlenecks, and optimize the program for better results, using referral marketing software comes in handy.

Closing Note

To meet the yearly milestones and sales objectives, companies spend considerable resources on marketing to acquire new customers. For an ordinary startup to compete with businesses with huge advertising budgets, word-of-mouth marketing and loyalty programs land an impressive opportunity.

With such brighter prospects for success, referral marketing is a grossly underused strategy in SaaS businesses. If you’re already compromised with designing and building the software, let Prefinery handle your customer acquisition strategy that overcomes every goal.

FAQs

How does a SaaS referral marketing program work?

A SaaS referral program encourages existing users to refer new customers to the software platform. Typically, users are provided with unique referral links or codes to share. When someone new signs up or makes a purchase using that referral link, both the referrer and the new customer often receive incentives.

What makes a successful SaaS referral marketing program?

A successful campaign management includes a user-friendly referral process, enticing incentives, transparent communication, and automated referral tracking. Additionally, it must align with the unique value proposition of the SaaS product, ensuring that users are motivated to share their positive experiences.