The Startup Chat with Steli and Hiten on Smash Notes

The Startup Chat with Steli and Hiten podcast.

December 31, 2019

Unfiltered insights and actionable advice straight from the trenches of startup and business life. The show hosts, Steli Efti and Hiten Shah, are both serial entrepreneurs who have founded multi-million dollar SaaS startups. Being busy CEOs of fast-growing companies, they know the value of your time and make sure you get the most out of each 22 minute episode. Tune in for new episodes every Tuesday and Friday.

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Does affiliate and referral marketing really work? In this episode, Steli and Hiten share their thoughts, tips, and experiences using this strategy and how it’s impacted their customer acquisition. You’ll find out the importance of asking for that one good referral and learn about Steli’s referral marketing strategy that works like a charm.

Time Stamped Show Notes:

00:07 – Today’s episode is about affiliate marketing and referral marketing

00:35 – Affiliate and referral marketing is one of the key customer acquisition strategies

00:51 – It is about getting your existing customers to refer your product or service to others

01:18 – Steli asks Hiten if they have done affiliate marketing programs for his SaaS products

01:55 – Hiten has tried and failed trying this strategy with Crazy Egg

02:06 – When Hiten first tried using affiliate marketing programs 10 years ago, they failed at optimizing the product

02:18 – They were successful at doing the partner program

02:49 – A non-competitive company promoted them and vice versa

03:14 – Referral programs, when done right, can be effective - Uber, Lyft or Post Maid have referral programs and are successful at it

03:55 – If you are willing to optimize it, referral marketing can be effective

04:15 – Customers are now used to referral marketing because many companies are doing it

04:46 – Be committed in investing in your referral program

05:11 – It might take three to six months for it to work for you because you have to keep on tweaking

05:44 – Steli has done referral sales but never referral marketing

06:04 – The idea of doing referral marketing has been brought up because new trials are coming in from word of mouth

06:52 – The strategy you use depends on your  unit economics, current customer acquisition cost with your current channels, and lifetime value

07:04 – You should know your limit because it will determine how much you should give, therefore this is not recommended during the early stages of your company

07:27 – Referral programs should be one of your cheapest channels

08:28 – You need a base cost so that you know what you can afford to offer

08:53 – The biggest challenge for a lot of people in the sales industry is that they are constantly running out of prospects

09:30 – Steli says most salespeople would not ask for referrals because they do not want to get a “no” after closing a sale

10:07 – If they do, it is weak

10:35 – Steli tells his customers that they cannot buy from him if they do not refer his product, especially if they are satisfied with it

10:50 – Steli explains that happy customers refer him to other happy customers; and they will agree to refer him because he can focus on providing them a service rather than marketing to other customers

11:25 – Nobody has ever said “no” to Steli

11:38 – After the deal is closed, Steli will remind them to refer him to just one good recommendation

12:08 – At first, your customer will be unsure on who to recommend but if you nudge them again, you will get something

12:32 – Start with asking for just one name

13:02 – If Steli does get a referral and the referral becomes a customer, they will contact the person who connected them and thank that person

13:41 – When the person receives the “thank you” note, he will again think of someone else he can refer to Steli

14:15 – Make referrals as part of the sales process from the beginning

14:45 – Steli thinks people don’t push as much on getting referrals because they are afraid of the rejection after closing a deal

15:08 – Get over the fear and get your systems in place

15:37 – Let Steli and Hiten know if you followed their advice by giving your feedback

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