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Evergreen Growth: Customer Referral Programs

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If you’re a content marketer, you’ve probably heard of evergreen content.

For those of you who aren’t, evergreen content is a piece of content that, regardless of age, time of year, or industry news, drives visitors to your websites. It’s some of the hardest content to create, but when you do, it’s some of the most valuable you can have.

Evergreen is King

Think of evergreen content like owning a store and knowing that no matter what happens today, 100 people will walk into your store.

Continuing with the store analogy, those 100 visitors only become valuable when they make a purchase. If you’re a web service this equates to becoming a monthly subscriber. Inside of a subscription service, the growth marketers are the ones tasked with getting users to signup and ultimately become paying subscribers.

Just like content marketers, growth marketers are looking for evergreen acquisition strategies. When they find one of these strategies, it can go a long way to making a company.

Unfortunately for growth marketers, effective user acquisition strategies are typically copied by competitors, or potential customers become immune to the strategy. As strategies are copied, your potential customers get lost in a sea of noise and as potential customer become desensitized to your message they stop engaging. Both of these outcomes lead to constantly launching new acquisition efforts.

Myth: Referral Programs Only Generate Short Term Gains

Customer referral programs are a powerful customer acquisition strategy. They tend to produce customers who are more profitable, have long lifetimes, and who are more likely to refer your product to others in the future.

Growth marketers often have the misconception that customer referral programs are short term campaigns. This is understandable because the majority of promotions where incentives are offered to increase conversion are time limited in nature. Also, most growth strategies become ineffective over time due to competitors copying them.

If it were true that customer referral programs are short term acquisition strategies you would expect to see results from your referral program like below.

Expected Referral Program Behavior


Fact: Referral Programs are Evergreen User Acquisition Strategies

These assumptions just aren’t correct. At Referral SaaSquatch we have seen a wide variety of customer referral programs for companies ranging from consumer products with small monthly fees to business products with $1,000/mo price tags. Our data tells a very different story than what could be expected.

We have found that referral programs do experience peak like behaviour. However, this behaviour is limited to customers exploring newly launched referral programs. This makes sense when you take into account that when referral programs are launched they are often accompanied by a large marketing push as we discuss in our article 8 Tips to Increase Customer Referrals.


Actual Referral Program Engagement Rate

When it comes to acquiring new paying customers we see essentially no peak like behaviour. In fact, we’ve found that subscription services that successfully acquire customers through a referral program tend to continue to acquire them at approximately the same rate month after month.

We believe this is due to three commonly overlooked parts of customer referral programs. Competitors have a very hard time to duplicate word of mouth because once a friend has made a referral they do not want to change their opinion and be seen as providing inaccurate information. Messages from friends don’t get lost in marketing noise. New users are signing up for your product all the time and to them, the customer referral program is new and exciting.

These three points couple with our experience would suggest that if your product is worth referring (which I assume it is if you’re reading this) then a good customer referral program has the potential to be a growth engine until you reach complete market saturation.