B2C SaaS Referral Marketing – A Comprehensive Guide for B2C SaaS Companies

As a B2C SaaS marketer, that is, B2C online marketing, you simply cannot underestimate the role of reference marketing. Learn everything you need about reference marketing in this guide.

He will probably say that people would trust the recommendations of their friends and families much more than television advertisements and other media advertisements. According to a survey by Hubspot, 90% of consumers think that the brand is recommended by friends, while only 8% of people think that Internet ads are the best source of information about products.

So, no matter how engaging your video content, how intuitive your campaign is, it won’t be as effective as a friend’s recommendation to his acquaintances.

To acquire new customers as efficiently as possible, you, as a marketer, need to perfect this marketing tactic to drive growth. In this article, we’ll discuss an in-depth analysis of how referral marketing can take your business to new heights and why it’s a brilliant strategy for SaaS marketers.

Without further ado, let’s dive in.



Simply put, referral marketing is incentivizing word of mouth. When you formulate a strategy to influence and incentivize already existing users to spread the word to potential users and help you acquire new customers, it is known as referral marketing.

Think of it this way. What do you do whenever you find something cool? You tell your friends and family about it. It’s a natural phenomenon we have in us. You want to be the one to find a solution for them. So, you recommend a particular product or service to make their lives easier.

Sometimes, a marketer can utilize this phenomenon to incentivize your referral. Thus, you get a certain benefit, and the business acquires a new customer. It’s a win-win scenario for both. And that is what referral marketing is about.


Referral marketing is effective for best-selling with the following:

  • Improved customer acquisition, engagement and retention
  • Profitable strategy
  • Having high-life users

Andrew Chen, a General Partner at Andreessen Horowitz and the former lead of Rider Growth teams at Uber, talks about growth and ties it with referral marketing. This is what he has to say:

“….strategies for growing your products are becoming even more competitive, dynamic, and tricky.”

He also adds that with the help of technology, marketers today can accomplish so much more. He then goes on to cite how Airbnb and Dropbox used referral marketing to their benefit, and how it worked in their favor. But why? It’s because regardless of past or present, word of mouth continues to grab a consumer’s attention.

The behaviors that cause people to do this are the same as what existed in the past – there’s a personal incentive for the sender, but also an incentive for the recipient. – Andrew Chen

And as a SaaS marketer, that should be your biggest takeaway. However, if you’re still not convinced, we have gathered solid statistics to prove otherwise. Read away!


So, we’ll be starting off with acquisition, engagement, and retention and explain how referrals can work in this regard.

  • Gartner states in one of its reports that 80% of all the future revenues of your company will essentially come from 20% of your existing customers.
  • The authors of Marketing Metrics find that the likelihood of selling to a new consumer is 5-20%. On the flip side, the probability of selling to an already existing user is 60-70%.

These statistics clearly imply that, for SaaS marketers who use referral marketing will find customer engagement and retention more challenging than customer acquisition. And as such, referral marketing has been known to ease the process of acquiring customers.

Take Dropbox for instance. In 2008, they had a user base of 100,000 people. Within April 2010, this user base doubled with its existing users sending 2.8M invites. With its brilliant referral program, Dropbox grew 3900% in just 15 months.

So, that is effectively what SaaS marketers would find helpful. With the help of referral programs, they can not only unblock clogged sales pipelines but also increase their user base.

And logically speaking, if a customer is actively interacting with your service on a continuous basis, he is clearly interested. And therefore, he would not shy away from recommending it to others. This, in turn, will you get more customers.

Regardless of which phase of growth you’re at, adding referral marketing to your marketing strategy will help you increase your customer base.


Referral marketing has a very impressive ROI. In this case, because the investment is minimal, it is a brilliant way to save your overall marketing budgeting cost.

If one of your customers recommends you to a friend or family, s/he has already done most of the marketing work for you. This is one way of getting prospects you may not have gotten yourself. When you incentivize your existing customers to refer prospects to you, you can not only build trust and engagement but also grow your network with minimal cost. Such leads can reduce waste of time and money spent on cold calling or uninterested prospects.

Your referral program can vary depending on the kind of industry you’re in. However, make sure you welcome your referred customers with the best treatment possible. The secret to referral marketing is providing such brilliant service that it would make people want to refer you to their friends and family.

Compared to other marketing strategies, referral marketing is very cost-effective. It’s the marketing strategy you need to grow your business.


As a SaaS (online marketing) marketer, it is natural to struggle to convert a free or trial user into a paid user. However, keeping the cost of customer acquisition (CAC) less than the user’s value of time (LTV) is a bigger challenge.

Keeping track of your customer acquisition cost is very important. Failure in this case can even result in the death of your startup. Referral marketing creates a pleasant and warm bridge between your existing customers and free users. This also unconsciously pushes them to move to a paid plan. This transition actually occurs by looking at the improved benefits. When trial users see additional benefits for paying users, they also tend to change.

Word of mouth combined with a structured referral program is an absolute victory for a SaaS marketer.

A well organized referral marketing program can help you increase your LTV to a significant extent. If you’re in the early stages of your startup and have a strict budget, this program can definitely come to your rescue.


One of the biggest benefits of referral marketing is its flexibility. A referral marketing program can work for any business you’re involved in, be it B2B, B2Cc, or SaaS. You can customize your rewards and even apply it to both expensive and budget-friendly products.

If you need more insight, look at some of the following examples that will depict referral marketing success stories.


Robinhood is an organization that deals with financial services. This platform allows users to purchase and sell stocks, crypto, ETFs, and more. Robinhood stepped up their game by thinking about the needs of its customers. As clients use their services to create investment portfolios, Robinhood offers free stocks to the referrer as well as to the newly acquired customer.

Robinhood became successful in its referral marketing strategy by incorporating various rewards. This keeps the interest and anticipation high because Robinhood selects the stock each person receives. You might not even have the same stock as your friend. On their website, Robinhood explicitly mentions that the value of each stock can vary between $2.50 and $200. This difference can lead to two different outcomes for users. And both of them are beneficial to Robinhood.

As far as customers are concerned, they either get a high-value stock or a low-value stock. With the former, Robinhood gets satisfied customers who are likely to refer them to friends and family. Even though getting a low-value stock might be temporarily disappointing, the customer will still maintain their relationship with Robinhood as a user. Both the results are advantageous to Robinhood.


Tesla’s referral program is a brilliant depiction of how to choose the right reward for your customers. The company came up with a referral strategy that enhanced the Tesla owner experience.

Suppose, you referred Tesla to a friend and she took your recommendation. You would be rewarded with 1,000 miles of free supercharging. This is a basic requirement for anyone owning a Tesla. Add to that, you and your referred friend each earn a $250 reward by purchasing solar panels. And that’s not all. Each referral also gives you a bonus opportunity to win a Roadster supercar or a Model Y.


At this point, you may be convinced of all the good that referral marketing can bring you. But your referral program needs to be integrated into your marketing strategy and used in combination with other plans. Note that this will not pay you overnight. You need to customize your referral program based on your resources, your customers and the type of business you’re involved in. Let’s see how to organize your referral program for a B2C company.


In B2C businesses, you sell products and services to everyday customers. So, before you start your referral program, you need to make sure your customers know what you’re talking about. The first step would be to educate them.

What is your referral program about? What rewards or benefits will your customer get out of the program? How does your referral program work and what are the steps someone needs to take to participate? Consumers appreciate when you educate them using simple and non-technical language.

As a B2C business, you can diversify your social media platform and reach out to your consumers in various ways. You can utilize social media platforms such as Pinterest, Instagram, Youtbe, Snapchat, etc. to make fun and engaging content that will attract participants.

Once your customer is educated and aware of what you’re talking about, you can move to pursuing them to subscribe or partake in your referral program. Find out how to succeed your referral marketing program.


When your responsibility is growing the business and you are tasked with launching a referral program, it makes sense to look at what’s out there that can help you launch more easily and efficiently.  Finding a user-friendly referral software that fits your needs will make your life much easier.

With GrowSurf, you can build your referral program in less than an hour, and integration is straightforward. Additionally, you can make changes to your referral program whenever you need to, without needing a developer. GrowSurf’s  robust referral API also allows for full flexibility and customization when you need it. Here are five reasons why you should use software for your referral program.

If you have a referral program in mind that inspired you, GrowSurf makes it easy to replicate.


Online marketing, still called SaaS marketing, can have a lot of mistakes when you experiment with different methods to see which strategy is best for your business. Referral marketing is undoubtedly the brilliant strategy to test. When you offer a referral program to your customers, you not only offer them a powerful word-of-mouth weapon, but you also make a path to a lucrative acquisition channel.

This article originally appeared on Growsurf.



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