Referral Management For SaaS Businesses. Is it a good idea? What are your thoughts?
We're planning to build a referral management system for SaaS businesses, something to what https://www.rewardful.com/ is doing. Currently, they are charging $29 + 9% trans fees. To make it more affordable for indie businesses we plan to keep lower-priced plans too.
What do you think about this niche and idea? How is the market? What can be the opportunities and difficulties?
Hey Zawwasd!
As someone who's in the market for referral software, a cheaper product isn't what is going to convince me. $29 plus 9% is already affordable, and it's worth noting that it goes to a 0% transaction fee if you upgrade to the $49/month plan, so it's not as if that percentage-based fee gets out of control.
I think you'll have to look for a different way to compete in this market. Instead of competing on price, look at ways that you can help software companies have a more successful referral program! And the best way to do this is to talk to people who already have referral programs, and ask them details about how it's going.
Also, my company, Software Ideas has done several market reports on the referral, affiliate, and partnership spaces. Shoot me an email and I'll see if I can get you one of those reports for free.
Best of luck!
Hi Kevin. Firstly I would like to thank you for giving a detailed and insightful answer to my question, which honestly means a lot.
Understanding from your POV pricing is not really a pain point for customers in this niche. Sounds fair now, since the value people by using is quite high.
Will try to talk to people who already have successful referral programs and talk to them regarding their pain points or issues, for finding a usp.
Software Ideas looks awesome! I've just sent you an email regarding it. Thanks again, man!
No problem!
That's at least my opinion. When a product is directly tied to revenue, meaning that you can easily calculate its ROI, such as in software like referral/affiliate software, it's harder to compete on price.
The thing is that there isn't really a use case where someone wants to add paid referrals to their product but can't justify either $29/month + 9% or $49/month. Think about it this way - the business would have to be making less than $29/month in referrals for the software to be a waste of money. And if they're doing <$29/month, why bother doing referrals at all?
Now there may be a niche where there actually is a pricing issue that I'm not aware of. Maybe a solution focused on referrals for free products, such as free newsletters? It might be worth looking into, but then you run into the problem of having your entire customer base be focused on people who aren't willing to pay $29/month, which is... well, probably not a great market to focus on, all else being equal.
Thanks! We've put a lot of work into it :) I just sent you a link to one of our issues that I think you'll find interesting. Hope it helps!
looks interesting, but what is the new thing that you will bring in the market besides the price?
Hey Michael! Hope you're doing great. Honestly, I really haven't though of any differentiators yet except for the pricing but from feedbacks it seems better pricing is not a painpoint for this niche.